Big Tech Earnings Week With Alex Kantrowitz, Two Small Caps on Josh’s Radar, Robots Take White Collar Jobs at Amazon

Summary

The Compound and Friends | Big Tech Earnings Week With Alex Kantrowitz

Date: October 28, 2025
Hosts: Josh Brown (A), Michael Batnick (B)
Special Guest: Alex Kantrowitz (C) – Host of the Big Technology Podcast

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Episode Overview

This episode is a deep dive into Big Tech earnings week, focusing on the “Magnificent Seven” (Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia, and Tesla) with expert commentary from tech journalist Alex Kantrowitz. The hosts and guest dissect market expectations, AI’s disruptive potential, strategic partnerships, and the ongoing “efficiency” trend in corporate America that’s increasingly powered by AI—including its impact on both blue-collar and white-collar workforces.

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Key Discussion Points and Insights

1. Tech Earnings Week: Setting the Stage

• High Market Expectations:
  • Tech sector, especially the “Mag 7,” has soared pre-earnings. Apple is at all-time highs, Nvidia hit $4 trillion, and Microsoft is surging.
  • Michael Batnick: “It’s the strongest three-day stretch of the year… expectations are super high going into the print and again short-term, but they better deliver.” [05:25]
  • Josh Brown: Cautions listeners not to over-interpret post-earnings, first-day stock reactions, given the massive run-up.
    • “A lot of these stocks just went vertical going into these reports and it would be totally normal for a company to have a great report and the stock not go up.” [06:11]

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2. Alphabet (Google): Search, Cloud, & AI Competition

• Search Threats from ChatGPT & Atlas Browser:
  • Alex Kantrowitz: “We’re three years after ChatGPT came out and search is not going away... Google still is the leader for Internet search.” [08:31]
• Cloud & Data Centers:
  • Big spending on cloud, deal with Anthropic, and rising capital expenditures ($75B → $85B).
  • Alex: “The money is just flowing in like a basically unprecedented way in cloud... I would not go bananas if you see some numbers you don’t like because there could be a broader story.” [11:07]
• Anthropic Partnership:
  • First-ever direct chip deal with a third party (a million TPUs earmarked for Anthropic).
  • Alex: “This is the beginning of a new really important strategic alliance between Google and Anthropic... Google needs a counterweight to the Microsoft/OpenAI/Nvidia/Oracle cluster.” [12:45]
• Potential Competitive Risks:
  • OpenAI’s Atlas browser is notable but not an existential threat—Chrome’s dominance is rooted and Google can easily integrate comparable features.

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3. Meta: AI Spend, Data Center Financing, & Existential Threats

• Massive AI Investment:
  • Creative off-balance sheet financing ($27B debt structured as leases) with Pimco, BlackRock, Blue Owl, to fund rapid data center buildout.
  • Josh: “Facebook does something really clever… makes their balance sheet look cleaner.” [15:57]
• AI ‘Friends’ and the Loneliness Epidemic:
  • Alex: “If you’re Meta… you basically do whatever you can to get ahead of [the emergence of AI friends]. We have a loneliness epidemic… people are turning to AI and so it’s a pretty big threat to you.” [17:47]
  • Michael (with dark humor): “It’s an existential threat that they might not be able to monetize the collapse of society that they helped to create.” [18:16]
• Internal Chaos and AI Strategy:
  • Meta’s repeated restructuring of its AI teams, morphing strategies, and the underperformance of Llama models.
  • Alex: “Llama is a failure… it is not setting the standard for open source. It’s been lapped by China in some ways.” [20:48]
• Market Reflection:
  • Ongoing strategic uncertainty may explain Meta’s lagging stock price (relative to sector peers).

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4. Amazon: Lagging in AI, Rise of Automation

• AWS No Longer the Cutting Edge:
  • Josh: Quoting industry whispers: “Nobody really wants to write to AWS anymore. They don’t see it as the cutting edge sandbox that it once was.” [25:28]
  • Alex: “They don’t have the juice right now... you’d want basically the state of the art. They made their own models, but no one talks about them at all.” [26:45]
• Potential Strategic Response:
  • Could focus on sales and incentives to attract AI startups until models commoditize.
  • Alex: “Still a sales business... figure out a way to get programs where they can get AI startups to be working with AWS more than they are.” [27:17]
• White Collar Job Cuts & Automation:
  • Amazon’s plan to cut 14,000 corporate jobs, explicitly citing “organizing more leanly” for adaptability and speed using AI.
  • Michael: “Rest of the street… is going to take this AI as cloud cover to get lean and do whatever they have to do. And the street is rewarding it.” [43:17]
  • Josh: “This is no longer about people in the warehouse. This is now biting into bone.” [46:23]
  • Reference: NYT report—Amazon aims to avoid hiring 160,000+ workers by 2027 via automation [43:35–45:23]

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5. Microsoft: Deepening OpenAI Relationship

• Profit Sharing and Strategic Win:
  • Microsoft secures 20% of OpenAI profits and long-term IP access—de-risking its position.
  • Alex: “Microsoft gets such a large chunk of OpenAI, 27% of the Public Benefit Corporation, entitlement to the profits, access to the IP, and most importantly… sort of gets off the Sam Altman roller coaster.” [31:14]
  • Removal of AGI-triggers that could have jeopardized Microsoft’s stake.

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6. Apple: All Eyes on iPhone Sales and AI Partnerships

• Earnings Preview:
  • Record highs ($4 trillion market cap), $102B revenue expected.
• iPhone 17 Matters Most:
  • Alex: “To me, the company is the iPhone company. It’s always going to be the iPhone company. If it’s able to revitalize growth in that business, that’s all you need.” [34:00]
• AI Partnership Speculation:
  • Apple likely to strike a deal with Google to use Gemini for next-gen Siri—Anthropic was a dark horse, but Google seen as most probable. [35:37]

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7. The Era of Corporate Efficiency: AI-Powered Job Losses

• Lean Staffing Becomes the New Normal:
  • Companies like Amazon, UPS, and Target are announcing tens of thousands of layoffs, especially white-collar roles.
  • “Year of Efficiency” is becoming the “Decade of Efficiency”—Wall Street rewards cost cuts with higher stock prices.
  • Josh: “Great for investors… terrible for society.” [49:40]
• AI enabling companies to run with fewer people:
  • Example: Intuit rethinking backfilling roles [47:10]
  • UPS credits AI for operational streamlining and higher profits despite job cuts. [48:11]

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8. Market Trends and Technicals:

• Cap-Weighted vs. Equal-Weighted Indices:
  • The Mag 7 continue to dominate the market returns via cap weighting.
  • Chart analysis shows staggering outperformance of tech-heavy indices over equal-weighted S&P.
  • “Cap weighting destroyed equal weight over the past couple of sessions.” [66:24]
• Historical Parallels:
  • Comparing the rapid rebounds and record highs to the late-1990s tech boom and other market cycles. [40:06–41:58]

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9. Small Cap Spotlights:

• IMAX (Entertainment Tech):
  • IMAX theaters central to Hollywood’s big releases; unprecedented advance ticket demand; expanding format.
  • Josh: “IMAX is the most important entertainment company in Hollywood other than Netflix and Disney.” [57:58]
• Etsy (Online Marketplace):
  • Market cap ($7B), new AI seller tools, and a major Lone Pine investment signal a turning point post-80% drawdown.
  • Josh: “Most people who are on the Internet are aware of Etsy. Very fewer investors are aware of Etsy. The stock. I love that disconnect.” [63:16]

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Notable Quotes & Memorable Moments

• Alex Kantrowitz on Data Center Investment:

  • “It’s going to be really easy to hold onto some signals that you don’t have the full picture on. I would not go bananas if you see some numbers you don’t like because there could be a broader story.” [11:07]

• Josh on Meta’s Threat from AI ‘Friends’:

  • “Meta doesn’t have to worry about a new social network. It has to worry about a replacement for the failed experiment that is social networking.” [18:02]

• Michael on Corporate AI Layoffs:

  • “Rest of the street... is going to take this AI as cloud cover to get lean and do whatever they have to do. And the street is rewarding it. So it’s scary.” [43:17]

• Alex on White Collar Automation:

  • “This is no longer about people in the warehouse. This is now biting into bone.” [46:23]

• Alex on Microsoft’s Deal with OpenAI:

  • “Microsoft gets such a large chunk of OpenAI... and most importantly... gets off the Sam Altman roller coaster.” [31:14]

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Important Timestamps

• [05:25] – Setting up earnings expectations for tech
• [08:31] – Alex on the durability of Google search
• [11:07] – AI-driven capital expenditure at Google and cloud investments
• [12:45] – The Anthropic-Google TPU deal
• [15:57] – Meta’s creative data center financing
• [17:47] – Existential threat to Meta from AI “friends”
• [20:48] – Meta’s AI/LLAMA model struggles
• [25:28] – AWS losing its “cutting edge” position
• [31:14] – Microsoft locks in OpenAI partnership
• [34:00] – Apple’s iPhone remains central
• [35:37] – Speculation about Apple’s AI model partner (Gemini/Google)
• [43:17] – Amazon’s white-collar layoffs and automation as a business model
• [48:11] – UPS, Target, and the new corporate model: less hiring, more AI

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Tone and Language

Hosts maintain an irreverent, sharp, and highly conversational style, blending serious analysis with banter and industry inside jokes. Alex Kantrowitz brings sharp, concise industry insight, often grounding speculation with nuanced takes on tech product trends and C-suite strategy.

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Conclusion

This episode provides a comprehensive, skeptical, and practical look at Big Tech’s earnings week and the structural changes AI is driving in both the economy and workforce. With informative, forward-looking commentary from Alex Kantrowitz and candid stock ideas from Josh and Michael, it’s a must-listen for market watchers interested in the intersection of tech, markets, and the rise of AI.

For further details, listen to Alex Kantrowitz’s Big Technology Podcast for more in-depth takes on AI and tech industry news.

Transcript

[A]

Ladies and gentlemen, welcome to an all new edition of the Compound and Friends. Tonight's show is sponsored by our friends at Public. More on public in just a moment. I want to spend a second just saying thank you to everybody who came out to the live event we did in New York and to all of you guys who listened to it on Apple and Spotify or watched it on YouTube, the reviews, all the comments, we love you back. And that was, as you guys could tell, a pretty emotional moment for me. Kramer is somebody that I grew up reading and idolized. And having the opportunity to talk to him about his career in front of 120 or so of our biggest fans, it just meant the world to me. So I just wanted to say thank you. All right, tonight is what are your thoughts? We had a special guest. Alex Kanchwitz popped by to get us ready for. For tech earnings week, or what I call earnings week at the AI Circus. So Alex walked us through all the big storylines for Alphabet, Amazon, Apple, Microsoft, Meta. We got into some Nvidia stuff, some OpenAI stuff. There's just. There's a lot in there and I really want you to hear it. So let's get into the show and enjoy. Welcome to the Compound and Friends. All opinions expressed by Josh Brown, Michael Batnik and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. All right, Michael, I don't know if you know this. All the gangsters are here.

[B]

Of course. Where else would they be?

[A]

I'm looking at the lot. I'm looking at the live chat. It's going crazy right now. Should we. Should we do. Let's do the. Let's do the. Let's do the sponsor and then we'll give some shout outs. How does that sound?

[B]

Okay.

[A]

All right.

[B]

Today's show is sponsored by Public. Public is the investing platform for those who take it seriously. You can build a multi asset portfolio. I'm talking stocks, bonds, options, crypto and more. Okay. You can also access. Don't.

[A]

I didn't. I didn't know it was my silence.

[B]

I'm talking. You can also access industry leading yields like the 3.8% APY. You can earn your cash with no fees or minimums. But what sets Public apart? What sets Public apart? AI isn't just a feature.

[A]

It's woven into the entire Experience from portfolio insights to earnings call recaps. Public gives you smarter context at every touch point. Plus, earn an uncapped 1% match when you transfer your portfolio, including IRA transfers, rollovers, even contributions. Fund your account in five minutes or less. Paid for by public investing. Full disclosures in Podcast Description Sorry, took me a minute, but I'm in the game now. Okay, let's say. Let's say some hellos really quickly. Michael Skyros is here. Serpentor 1080 says, what up, what up? Mark Morris is here. Matt Davison, kps, Fred Rigatoni Capital. Great handle. We love to see it. Nicole is in the chat. Boys, say hello. Be polite. Who else is here? Everyone. The whole. Oh, my goodness, do we have a sp. It's Alex Kanchwitz, you guys.

[C]

How you guys doing?

[A]

What's up, man? So glad you're here.

[C]

Great to be here. What a week, Alex.

[B]

I feel. I feel like. I feel like it's like day two as I'm looking at your background, not to do homework assignment, but it's not day one anymore.

[A]

What do you want him. You want him to judge?

[B]

No, he's gotta update the book.

[C]

Here's the thing. If you try to write a book today, given how much AI news is happening, your book is gonna be like a year out of date by the time it prints. It's true. So there will be another book. It's just we gotta wait a couple years to figure out where the ending is.

[A]

You have to write books as like a look back at what happened. You can't. I read. I tried to read Ray Kurzweil's AI book this summer. I got halfway through it. Every other paragraph, he's like, by the time you read this, this might not be relevant, but. So how much of that can I read?

[B]

No, you know what? Sorkin did it, right? He waited 100 years to write the finale. The final. The final, like 1929 expose.

[A]

This is the. This is the key. All right. I'm so glad you decided to stop by today because it's earnings week in the AI circus and all the. I think we get five of the Mag seven reporting this week. Everybody except for Tesla and it, which already reported, and in video, which comes at the end of November, but it starts tomorrow and it's relentless through the end of the week. So what a great. What a great moment to just take stock of what's happening company by company. But, Michael, I think you have a chart to set the table first.

[B]

Yeah. So this is all short term stuff, so it doesn't really, really matter in terms of where we are in the cycle but, but I wish that we weren't so bowled up going into the reports. You have Apple at an all time high today. Nvidia 4 trillion. Apple today, Microsoft. I mean it's all, it's all had. Google's going vertical. So I listen you don't get to choose but throw this chart up. So chart kid did a three day rolling, three day return look back at tech versus X tech and it's the strongest three day stretch of the year and if you zoom out even back to like the, the dot com bubble it's up there. I mean this is a notable, notable run. So expectations are super high going to the print and again short term but they better deliver.

[A]

You know what this means to me? It means that we should not take the post earnings reaction in the first day or the after hours as being overly meaningful. A lot of these stocks just went vertical going into these reports and it would be totally normal for a company to have a great report and the stock not go up.

[B]

Oh and video is down 6%. Who cares? It's back to where it was on Tuesday.

[A]

Yeah, I'm with you on that. Tomorrow we'll get Alphabet. So I guess I don't know if we're starting an alphabetical order but let's do it. Let's, let's do Google expectation for revenue 100 billion. To remind the viewers that's for the quarter that would be up 13.5% year over year. Earnings per share $2.27 which would be 6.8% year over year. Let's do this chart real quick. Here's what the last year has looked like. I am the schmuck who sold it over the summer around 200. So missing out on the last 70 or so points.

[B]

Oh yeah, I'm the schmuck who sold it at 170. I'll do you one better, Alex.

[A]

These are what I think are the big themes here but I want you know a lot more about this than I do. I think the big themes that people are looking for, whether or not there's erosion in search due to people starting their searches with ChatGPT. I know that's a big one. There's been no sign of it yet and Gemini has been a pretty powerful way of Google counteracting that. But that's out there. I think people are excited to hear about Waymo. They don't publish financials and it is in the other category, the moonshots category. But I do think it's a big deal that they've rolled out in so many markets over the course of the summer. And I guess the third thing would be any color that they could offer on things that are far, far out on the horizon, like quantum and obviously data center spend, et cetera, et cetera, et cetera. But what do you think are the big themes of this particular report?

[B]

He missed two big ones. No offense.

[A]

No, I'm sure I did.

[B]

Cloud, right?

[A]

Well, that's what I mean. The data center, that's like the obvious thing.

[B]

And YouTube.

[A]

Yeah, of course, YouTube. Good point.

[C]

So I'll take these. A couple of them are pretty interesting and worth digging into. First is the question about whether search is going to be disrupted from a has. I wouldn't say it's been settled yet, but it's been answered, at least in the short term. I mean, we're talking about a Google that's going to do 13% revenue increase if it hits consensus this quarter. We're three years after ChatGPT came out and search is not going away. So I think that question has been answered. And to some degree at this point, is there a long term threat that ChatGPT will take this over? Potentially. But one of the things that I've realized or one of the things I've seen is that your behavior with ChatGPT and your behavior in search are generally fairly different. I think Google still is the leader for Internet search. Now. I think there's like this new category that's generative AI conversations that it's going to have to face off with ChatGPT about, but I think that's largely additive. The cloud stuff is really interesting.

[A]

Can we go back to search really quickly before you move on?

[C]

Yes.

[A]

It's too early for there to be any fundamental thing to say, but do you feel the next concern on Alphabet is the Atlas browser that ChatGPT launched? Because if that ends up being a thing that a lot of people try and like Chrome is like really important to search, I wouldn't suggest that within the course of the next 90 days there's going to be a sea change in the way people use the Internet. But like, is that going to be the next question about Google searches dominance? Like whether or not Chrome can withstand an assault from OpenAI on the browser side?

[C]

I'm not worried about Chrome. I spent a lot of time using the Atlas browser last week and reading about how other people's have. Other people have used it. It's a real fun tool. It's. It's different. I think it is the future of browsing. However, Google has the DeepMind team within it. It's a little the same thing, right? Exactly. It's a little bit worse than OpenAI on product, but the idea that Google's just going to sit there and keep chrome, Chrome as OpenAI brings these innovations to market I think is not going to be the case. I think that this could be a Snapchat meta situation where Snapchat comes out with stories, meta comes out with stories. It's as easy as clicking a button on the browser and you'll be able to get this type of functionality. That's definitely going to be the case with Chrome. With browsers. Many have tried to unseat Google and few have succeeded. And really by few I mean none. Like it is the one of the most difficult things to get.

[A]

Tell us about cloud. Tell us about cloud.

[C]

Cloud is going to. So this goes to your earlier point, Josh, about like let's kind of relax when the earnings results come in because we're obviously in this point of like a big run up and you know, we don't fully know the full story as soon as the quarterly results come in. So just to give the Google example, investors were upset last quarter when Google gave guidance that it was going to raise, I think capital expenditures from like 75 billion to 85 billion. And they're like, what are you doing spending all this money? And then a couple months later it announces a partnership with Anthropic worth tens of billions of dollars. So the money is just flowing in like a basically unprecedented way in cloud. So it's going to be really easy to hold on to some signals that, that you don't have the full picture on. I would not go bananas if you see some numbers you don't like because there could be a broader story a few months that actually turned those numbers into a good thing.

[A]

The Anthropic deal with Alphabet I think is worth double clicking on because this is the first time they have ever done a chip deal directly with a third party. You've had access to TPUs for seven years now if you were using the cloud and renting them, renting that access. But now this is like a million TPUs directly for the usage of Anthropic. It strikes me as like a new phase in Alphabet's chip ambitions. And I don't know like is it a one off or is this like a whole new thing that Alphabet might start doing that the street might be looking at them more like a real Nvidia competitor.

[C]

So I think this is the beginning of a new really important strategic alliance between Google and Anthropic. And I think the timing of it isn't, isn't a coincidence. So if you're Anthropic or if you're Google, you're looking at the fact that OpenAI has gone and teamed up with Nvidia and Oracle and they have Microsoft and you're saying hold on a second.

[A]

Especially you need a dance partner.

[C]

Exactly. And if you're Google and you see that, you're just like we need a counterweight here. And so Google of course has its own effort, but it is a big investor in Anthropic to the tune of billions of dollars as well. If there was ever a company that it was going to try to position as a counterweight as well, it would be Anthropic. And that's what's happening.

[B]

Pretty big blow to Amazon considering their investment in the company.

[C]

Oh yeah. I mean I like went through some of the Amazon numbers now and the Amazon initiatives and sort of came to the like what are you doing conclusion here? They're efforts.

[A]

There's another one I've been wrong about all year. Let's pause on Amazon because we're going to get there in a second. Let's do meta. 49.4 billion in revenue for the quarter expected that would be almost 22% year over year growth. Earnings of $6.66 which would be 10.5% year over year growth. Also spending like crazy, doing all sorts of new versions of financing, data center buildouts like Hyperion. Also spending as though this were existential to the company because it probably is. And working with some really big partners, financial partners on Wall street in the process. And I behind the scenes we're talking about some of these deals that they've been striking.

[B]

This is going to be. The analysts are going to be all over this in the Q and A about these off balance sheet financings between Blue Owl and BlackRock's involved and Pimco's involved and they're getting approval from rating agencies that it's not going to impact their credit. Like this is the phase of the cycle and the analysts are going to be all over it.

[A]

So Alex, just to put a fine point on what Michael's saying, which is I think the most interesting thing about going into this quarter, Pimco basically was able to take down $27 billion worth of debt for all sorts of investors as a fund and it looks like immediately after these bonds to finance the data center. It looks like immediately afterward you saw blackrock become one of the largest holders. They tucked away a bunch of these bonds in their portfolio. The price of the bonds went up so much that Pimco actually was able to net $2 billion in profit right off the bat. Like immediately in reselling, the bonds hit 110 cents on the dollar. And concurrently S and P Global comes out and says this is a plus credit. Like, like immediately. Facebook does something really clever where they structure this type of spending as though it's operating as opposed to financial. Meaning they're taking these four year leases on different data centers.

[B]

Makes their balance sheet look cleaner.

[A]

Right. So it's not a capital asset sitting directly on the balance sheet. It looks more like a lease. So there's a lot happening here and it's happening fast. Everyone's in the mix. Citadel was making markets in the bonds. Blue Owl is involved on the equity financing side, trading them. Yeah, it's a lot happening here. So tell us what your take is and whether or not you think this will be material to the call.

[C]

Well, I would defer to you guys about whether that, what the impact of that is going to be. It's to me like you're, you're getting into. Well, yeah, actually. Can you elaborate on that, Josh?

[A]

Yeah, no, that's, that's as far as I go. Big mistake to defer to us. Big mistake to defer.

[C]

Oh, that was. Okay. I. Look, I think that you're seeing a lot of these companies get really, really creative. I think that might be one way of putting it when it comes to AI funding. They're trying to do whatever they can to continue to operate as normal while putting, you know, a tremendous amount of money into these data centers. And if you're Meta, you really see why this quarter is a quarter over. Really? Over the past few weeks you've seen Sam Altman, which you know, Meta has3.3 trillion. No, sorry, 3 billion people using their products and OpenAI now has 800 million weekly active users on ChatGPT. And a few weeks ago, Sam Altman said, you know, we're going to let people become friends with them and have romantic relationships with them, going as far as to like have erotic role play with these bots if you can verify that they're adults. And that's a big if. So if you're Meta and you're the friend company, right, and you see this starting to come up in your rear view mirror, you basically do whatever you can to get ahead of it. That's why Mark Zuckerberg is spending all these billions of dollars recruiting AI researchers. And you sort of like, you realize that it's fairly, it's going to be existential for this, for the company because we have this moment where we have a loneliness epidemic. Being friends with people like real humans online isn't doing it for folks. It's not solving the crisis and people are turning to artificial intelligence and so it's a pretty big threat to you.

[A]

That's an interesting take. And I, and I, I haven't heard anyone say that before, but that's an interesting take. Like Meta doesn't have to worry about a new social network. It has to worry about a replacement for the failed experiment that is social networking.

[B]

This is a up thing to say because you're saying that it's an existential threat that the loneliness epidemic, that they might be, that they might not be able to monetize the collapse of society that they helped to create.

[C]

Well, that's.

[A]

I didn't think he said that. I don't think he said that.

[B]

That's what I heard.

[C]

But you're on the right track, Batnik. I mean there is like there is all sorts of sad things going on in our world right now and tech is partially responsible for sure and.

[A]

Hey, Alex. Oh, please, finish your thought. Finish your thought.

[C]

I would just say social media itself is no longer a thing. I mean, you really just have group chats and you have like lean back stuff like reels and TikTok.

[A]

I'm in 10 different text chats with different groups of friends that I've made over the years. That's like 9,000 times more fulfilling than, than anything I get from traditional social media. And my friends are cavemen like me. It's not like I'm chatting with brilliant people. You could trust me. Is Mark gonna get asked about the fact that they've just restructured their AI unit for what I've read is the fifth time? There seems to be a lot of internal dissatisfaction engineers that wanna be on the AI team, but they're not. Or they're working on old AI products like Llama that already look like they're gonna be out of date before they're finished. And with all that hiring, there's also a lot of shuffling around of personnel. Is it chaotic or is this just like too many reporters are trying to cover this? And this is just what it looks like when you're investing in new products.

[C]

It is chaotic. I mean, we saw a note from. Oh, I know it's chaotic. I mean we saw this note from Zuckerberg saying that they want to go towards superintelligence. What have you seen since then? Have we seen a roadmap from them? Have we seen any product progress at all? I haven't. And you do run into morale issues when you pay some people, you know, I don't know, a billion. What was $100 million? Even though Meta disputes.

[A]

No, they don't pay them. They buy their, they, they buy the company that the person started a week ago for.

[B]

No, no, no, guys, they give, they give them infinite credit to have sex with the robots.

[C]

Well, that might be in the future. That's probably what we'll all be fighting over.

[A]

Okay, so you think, so you think beneath the surface this is not a situation where the world is eagerly awaiting Llama 6 and all is well with Meta's strategic plans for AI? You think there's a lot of concern?

[C]

I'm concerned. I mean, in tech. In tech you could have failures and the failures can turn into successes. Right? We've seen that in so many different areas. But right now Llama is a failure. It is not setting the standard for open source. It's been lapped by China in some ways and Mark Zuckerberg has moved off it. The most recent large run just didn't work the way that they hoped to. And so now you have this sort of, you know, amorphous effort in the middle of the company. Again, I am waiting to see a roadmap. Once I see the roadmap, or at least some vision about what they're working on, that's fine. But this, you know, to trust them with like all this high paid talent, you know, going after this sort of, you know, pie in the sky idea of super intelligence without any details, it's just not a place I'm in.

[A]

Chart back on Meta real quick. Do you think that what you're saying partially explains the fact that this is among the Mag 7 names that has not taken out, meaningfully taken out the Feb, the January high or the, the July high. Like Looks more like Amazon, I guess I would say, than it looks like Apple or Microsoft. And do you think that that's what you're saying is an explanation for that?

[C]

I think, yeah. The fact that there hasn't been a roadmap, at least a concrete one, combined with the fact that maybe the market is realizing that AI friends are a bigger disruption than, you know, to Facebook, than, let's say Search would be or ChatGPT would be to Google. Search to me is the issue and by the way, it's like. It's not a new idea. Ten years ago, I was within Facebook doing some reporting stuff, and they were talking to me about how they wanted to build AI friends. They've always had the vision. They've just been a little slow. We're in a moment now where I.

[A]

Also think the headlines are bad. It's dystopian. I don't think Zuckerberg is excited to say AI friends are here. I don't know.

[C]

I mean, that's what they're doing. They're building the AI friends within messenger and they can be celebrities.

[B]

He's leaning in. He's leaning into it.

[C]

That is where they want to go. It is dystopian. But OpenAI has been executing here.

[A]

Last meta question, the Vibes rollout. So basically it's a feed composed entirely of AI slop. I don't know that maybe. Maybe it's fun. It's like Sora. Sora to launch was looked at by the early adopters as, my God, this is so fun. The. The meta thing kind of. It seemed like doa, but maybe it's not. And the first impression is wrong. Is that like a sideshow that doesn't really matter yet. It's just them experimenting in public?

[C]

I think that's exactly right. It is a sideshow. It doesn't matter. It hasn't gone anywhere.

[B]

It's.

[C]

And by the way, Sora is also going to fall off. I mean, one of the issues with Sora is after you use it for a week or so, you sort of stop figuring out what you want to use it for, because every video looks the same and AI is the average of averages. Right. So if you think about, like, all the emails that have been written by chatbots, the images, the videos, they all have a feeling of sameness because the model is just outputting sort of the average of what it's trained on. That's what it does. And so to Sora just fell off as the number one app in the App Store. I think it lost out to. Was it like Danny's hot chicken or something like that?

[B]

Yeah, nobody. Nobody cares. Nobody cares.

[C]

So I think it will fall off as well.

[A]

Alex, before.

[B]

Hold on. Before we get to Amazon, just. Last question. We have. We have five minutes left, so we're going to keep this quick. If you had one question to ask Zuckerberg, if you wanted to call, what would you ask him?

[C]

I mean, I would just ask him straight up. You're. You had a vision, at least for the metaverse. It didn't work out right, but you had a vision. A bunch of people hanging out in virtual reality. What is your vision for super intelligence?

[B]

Good question. Okay, let's stop this five year chart of the max seven names and one is obviously lagging behind the others in a dramatic way. And it's Amazon. It's not even close. It's not even beating the s and P500. What a loser. And the main reason, I mean, there's a bunch of them, it's behind on AI, but their crown jewel, aws, which is driving basically off its profits at one point in time, if it's still the biggest, it's still the behemoth, it's still doing a ton of, a ton of operating income, it's still got juicy, fat margins, but it is seeding ground in a meaningful way to both Alphabet and Microsoft giants. Throw this chart up, please. So even though it's the biggest, look at the revenue growth compared to its biggest competitors. And then Lex chart. Then I'll give it to Alex. It's nowhere in AI cloud revenue. This is projections, obviously, but look at it. That's black. AWS is black compared to Google, Microsoft, which is predicted to be the winner in Oracle. I mean, it's nowhere in the future.

[A]

Cramer told us, according to the tech CEOs he talks to. And you can probably imagine who those people are. The word on the street or the word in the Valley is that nobody really wants to write to AWS anymore. They don't see it as the cutting edge sandbox that it once was. And I have no idea if that's true or not, but just passing that along, and I think that maybe is part of the conversation is that people don't view AWS as being in a leadership position on AI relative to, let's say Microsoft or even Google at this point. Are they right? And if so, what does Amazon have to say on this call?

[C]

Well, if you think about it, it's almost like the home teams in the way that they play in each stadium. So if you go into Azure, the home team is OpenAI. And actually, one of the most interesting things about the deal that Microsoft and OpenAI announced today is that I think Microsoft's gonna have access to OpenAI's IP till 2032, which is okay, it's only about seven years, but that is a long time in this moment.

[A]

And 20% of the. And 20% of the profits.

[C]

Yeah. Great deal for Microsoft, by the way.

[A]

Amazing deal for Microsoft.

[C]

Unbelievable deal for them.

[A]

Keep their equity. All right, so what does Amazon have to establish here then?

[C]

Well, then you go to the home team within Google Cloud and it's Gemini, which is a great model in its own right. Amazon just, I mean they have anthropic. Anthropic is the number one AI model for enterprise. So you would think that that would help, but you could also get anthropic elsewhere. So I think that they don't have this flagship model. They do have some nice tools to build AI models like Bedrock and people are using that or build AI applications, but they don't, they don't have the juice right now. So I don't, I mean it's really hard for me to tell exactly what they need. You would, you'd want basically the state of the art. They actually made their own attempt to build their own, their own models, but no one talks about them at all. And that was announced a year ago. So I think that like what Amazon could do is this is still a sales, it's a sales business. So it will have to step up sales, maybe give credits, maybe, you know, figure out a way to get programs, to build programs where they can get AI startups to be working with AWS more than they are. I mean, they're still there, it's not lost for them. They still do a lot of really meaningful work with AI. But it is one of those moments where you do have like the proprietary models, they're, they're uneven right now. Now maybe. Okay, so, so one philosophy about this is maybe you wait for all these models to commoditize, which they might eventually, and then it sort of doesn't matter which model you have.

[A]

So Amazon's going to spend time, Amazon's going to spend about a third of its conference call talking about groceries and you will not hear that on the Nvidia call or the Alphabet call. So that's one thing Matthew Stevik in the chat says. I remember Jassy making a very small thing that stood out to me on the April 2025 earnings call about how the Nvidia chips are so expensive. That's a really great call out, Matthew. And I remember that too. And there's a lot of talk about application specific integrated circuits taking the place of Nvidia GPUs for certain workloads. They're more cost efficient, et cetera, et cetera. And it strikes me that we're not in the phase of AI adoption and build out where cost effective is the thing that gets investors excited, I think, or programmers excited. I think people really want the Best tools, not the cheapest. And if that's where Jassy is going with their priority roadmap, maybe that's problematic in and of itself. What do you think about that idea?

[C]

I mean, it's spot on. And just to sort of put a bow on that, when I speak to people who are deploying this technology, they will tell me that the difference between deploying a model that gets like 99 of the stuff right versus 95% is massive. You almost can't work with something that has that big of a gap. So they will. That is basically the whole ball game here, is that some AI models will just be more accurate and better and therefore worth a massive premium. Even if the almost as good models can do effectively, almost what they do, but for a fraction of the cost, because you ultimately errors in the stuff and economically valuable activity are going to be quite costly.

[A]

Can we keep you for two more real quick?

[C]

Yeah, let's do it.

[A]

All right, let's do Microsoft one year. Chart, please. Microsoft, it appears to me, has godfathered this whole situation. They seem to be the only company that has Altman in a position where he's got to do deals that maybe aren't perfectly advantage to OpenAI but offer a lot of advantage to Microsoft. And that's a pretty good place to be in. Today they made it official. I don't have the numbers in front of me, but Microsoft's going to keep 20% of the profits, which is a lot of money, potentially. Also sort of has the inside track on all things ChatGPT, OpenAI in a way that it wasn't clear even six months ago or three months ago if they would keep that constant headlines about they're not getting along, the playground's not big enough for both of them, blah, blah, blah. I don't know if they've totally put that to bed. The share price and reaction, reaction in Microsoft today tells me the street seems to think that they have and this is now paving the way for OpenAI's full conversion to a for profit, ultimately an IPO company. Am I on the mark here with, with that interpretation?

[C]

Yeah, I mean, one thing I'll say, first of all, there have to be profits. I mean, OpenAI is expected to lose something like 120 billion by 2029. So there might be some time there. But here's what Microsoft gets with this deal. You know, the equity was a little bit less than some people might have expected given the extent of the profit they were entitled to and the money they put into OpenAI. But Microsoft gets such a large chunk of OpenAI, 27% of the public Benefit Corporation, it gets an entitlement to the profits, it gets access to the ip. And I think most importantly for Microsoft is it sort of gets off the Sam Altman roller coaster. It has its stake. If OpenAI succeeds, Microsoft gets a piece of that. If OpenAI doesn't succeed, it's, it's upside or its downside is limited.

[A]

Whereas like if there's no secession, there's no secession. In other words like they're going to, it's, they're together.

[C]

Well correct. But also like if Microsoft were to like so Microsoft basically I think Microsoft had this option in front of it. Keep funding OpenAI and basically betting the entire Microsoft on OpenAI or allow OpenAI to go to the Oracles, the Nvidias of the world to build the infrastructure and then just kind of negotiate with OpenAI for a piece and that Microsoft went with that second option. And I think that's brilliant because it's basically like we'll get 27% of the company if these big risky things that Oracle and Nvidia are doing with OpenAI pan out. And if they don't, basically very little downside.

[A]

They actually had this crazy thing written into the agreement which I think is now put to bed where once OpenAI achieves AGI Microsoft like loses a whole bunch of their stake. Like could have been tens of billions of dollars. Like that was the deal. And who declares when OpenAI has achieved AGI open market polymarket.

[C]

Now there's an independent board that will review that.

[A]

So but it's a financial now it's about replacing actual workers. It's not this nebulous concept like it's, it's a financial test to see whether or not they've, they've achieved AGI.

[C]

It's like if you were Satya, you were just kind of sweating it out hoping Sam wouldn't say those magic three letters.

[A]

Yeah, last one. Apple. Give me a one year. So Apple made a record high today. Hit 4 trillion in market cap stocks 269 Michael, say it.

[B]

I already did.

[A]

Nice. Look, I, I, it's $102 billion in revenue expected when they report, which I think is Thursday. That's a only 7.6% year over year growth but it's huge numbers. Earnings $77 would be almost 8% year over year growth and it looks like the new phone is a hit. What else do you think is relevant to know going into the. What, what should we all be watching for when they have their call.

[C]

IPhone 17 I think is all that matters. I mean, they're going to give us some numbers on a week of iPhone 17 sales. All the reports, the third party reports have said that those sales have been through the roof. So it would be great if the Apple confirmed that. That would be great news for the company. I mean, it went through a couple years of low to stagnant growth on the iPhone and if that could be restarted, there was 13% iPhone growth in the most recent quarter. If they could restart that, that would be massive because the only thing that really was growing at an impressive clip was services and that was on a fairly low base. So to me, the company is the iPhone company. It's always going to be the iPhone company. And if it's able to, you know, revitalize the growth in that business, I think that's really all you need.

[A]

If you're Tim Cook in The chat situation 0 says Apple will make a deal for Gemini to power Siri. So I was talking on CNBC about this today with Microsoft and the OpenAI soap opera now resolved. To me, this really puts pressure on Apple to not just rely on its app store partnership with open with ChatGPT, but to like really do something that can power Siri and set it apart. And I just felt like the most obvious thing is that once again Google and Apple run into each other's arms. If you had to guess when Apple revamps its Apple intelligence and Siri product in 2026, if you had to guess, would in fact Gemini be the technology that that's going to be built on? Or is there some dark horse like a perplexity deal or Apple's own foundational model? Like what do you think is going to happen there?

[C]

I mean, the dark horse for me would be anthropic. We know that anthropic and Apple have spoken. Apparently anthropic wanted a lot of money to be able to power Siri and that sort of broke down. So I think Google probably is the most likely candidate. If you're Google, it's great. You get more data for your models, you get exposure, you might get people to sign up for big personal cloud deals and that would be good. If you're Google and you know Apple is desperate, so you probably get some pretty good terms if you make that decision.

[A]

I want to tell you, you are the best. It's so important that we talk to people like you that are eating, sleeping and breathing this stuff because we're Wall street, we're morlocks and you're an Eloy. I don't know if you know the reference.

[C]

I listen. You know your stuff.

[A]

All right, so you're among the Eloy, and you are out and about in that world, and we have to hear from you. So thank you so much for stopping by. I know the audience appreciates your time. Let's tell everybody where they can listen to you on an ongoing basis.

[C]

Yeah, so you can listen to me on big technology podcast. We're in all podcast apps. We have the CEO of Medium coming on this week to talk about how AI is going to change writing, and we break down all the AI news every Friday. So it's been great having you both on, and it's always fun to speak with you.

[B]

You guys are great.

[A]

Thank you. Thank you so much, Alex. All right, have a great night. I love him. Do you love him?

[B]

I do love him.

[A]

What's not to love, right? He knows what's going on, and he knows how to explain it.

[B]

That was rhetorical. Yeah. No, he's the best. Okay, let's. Let's do a little bit of stock market. Liz, I got some dirt on Can't. Shorts. No, I don't. Let's. Let's. Let's do some stock market stuff. So the stock market is ripping more. More buyers and sellers. And one of the reasons, of course, is because companies just can't stop, won't stop, throw up this charge on US Companies. At least to be clear, companies in the s and P500 are beating estimates to a degree that we haven't seen since the days of the pandemic. Pretty hard to believe, huh?

[A]

Look at this. It's crazy. And this is with tariffs, right?

[B]

And it's not like. And it's. Dude, it's not like estimates. Remember in 2022, we spent a lot of time talking about estimates need to come down. Estimates need to come down. They're not coming down. Like, it's not like. I mean, analysts are not being super conservative. The bars here keep jumping over it.

[A]

Yeah, no, I think that's exactly right. And I think, like, the analysts are tired of getting sandbagged and having low estimates and then seeing these companies exceed. Because it's. It's not that the analyst cares that much about the published number versus their estimate and being so close, you feel stupid in front of clients who are trying to trade these stocks, and you keep telling people to curb their enthusiasm, and then they go up 20 points. I think the analysts don't want to be in that position anymore, but they.

[B]

Also don't want to. They also don't want to get out over their skis where it's like, guys, come on, how could you.

[A]

At this point, what are you more worried about though? If you're doing sell side research on AMD and Micron, you're way more worried about getting leapfrogged than you are about getting over your skis.

[B]

Me personally, I feel like the risk is always to the downside. Like I would much rather be conservative and companies just question. You just go listen. Right. As opposed to like getting all bowled up at the top. It's like, you donkey. Like now.

[A]

Yeah, well, I, yeah, I guess, I guess that's probably a pendulum just like everything else.

[B]

Sure. All right. One, one other thing I want to mention. Chart kid made this. I've never seen it before. Here's what we're looking at. We're looking at the number of all time highs in a year ju pos with the max drawdown for the year. So all the way on the left, you see.

[A]

So sick.

[B]

All the way on the left, the companies that are on the zero of the Y axis or company or I'm companies are years that have. That didn't see an all time high.

[A]

Okay.

[B]

Those are bear markets by definition. And then what we're looking at, the red.is 20, 25 year to date looks very similar to 1998 where you had a 20% give or take drawdown and yet tons of all time highs. 35 year to date. 98 of course was, was LTCM and the Russian ruble and all that sort of stuff and market hiccup for a second and then boom, off to the races again. What a char.

[A]

This is so great. And I'm going to tell you another thing. In 90, in the summer of 98 when keep this up. In the summer of 98. So you had. All right, so this is saying in, in 98, in the full year you made almost 50 new, new, new all time highs.

[B]

Unreal.

[A]

And then a 20% drawdown. I remember that 20% drawdown. It was in the summer and Greenspan came out and dropped rates like not by a little bit. I forget the actual number. But it wasn't 25 basis points and it wasn't on schedule. It was a surprise rate cut. It was in response to the fact that they were trying to do this long term capital hedge fund blow up. They were trying to like do a workout with other banks on the street. They did a self bailout basically without taxpayers being involved. But they were also countering like just massive disruption across Asia. It wasn't just the Russian ruble, it was the Thai baht. It was all these currencies that on the surface you feel like it's obscure, it doesn't matter. But when it's every currency, one after another blowing up and Bob, markets going kabooy too. Yes. So they did this sort of one off intra meeting, surprise cut and it immediately brought order back to the markets and the Nasdaq. And I remember it, I remember it like it was yesterday, even though it's like 27 years ago. I wasn't managing money. I was like a cold caller. But I was watching the TV with all the brokers. And that reminds me a lot of how fast the turnaround was this April where it was like, we're going to do these insane tariffs and then like a few days later, now we're really not going to do that. It's literally, it's, it's eerie how much those two things match up. So. Shouts to char kid Matt. So that's a really sick visual. I love, I love what this, this guy's doing.

[B]

All right, let's talk about the robots.

[A]

So last thing, put that chart back up. So by definition, is 1995 the best year ever for the stock market?

[B]

Yeah. Because it went straight up.

[A]

There was no 80 new all time highs and no drawdowns.

[B]

It was, it was that and then 2017 to my memory. Yeah. So.

[A]

So guys, you're staring at this chart. That's 95 is all the way to the right. No, 2021 is right next to it. Yeah, yeah, Great chart. Love it. So killing it.

[B]

Okay, so there was, there's been articles written about what Amazon is doing inside of the warehouses. They've got all sorts of robots, some are newer than others, but able to do all sorts of things in terms of moving different gigantic things around the factory and then taking up the packages and all sorts of robots, machines. Okay, so obviously a lot of factory workers are being displaced, replaced. But then we got news yesterday or this morning actually, there was speculation that they were going to cut 30,000 corporate jobs. It's 14,000 corporate jobs, obviously, you know, meaningful number. They wrote a blog post today about it. They said the generation, this generation of AI is the most transformative technology we've seen since the Internet. And it's enabling companies to innovate much faster than ever before. We are convicted that we need to be organized more leanly with fewer layers and more ownership to move as quickly as possible for our customers and businesses. And the rest of the street, and it's already happening, is going to take this AI as cloud cover to get lean and do whatever they have to do. And the street is rewarding it. So it's, it's scary.

[A]

Yeah, but it's, look, it's where it's going. And it started out with, all right, we're just not going to hire more people. So anyone that resigns or retires before we add that person back, like add a new version of that person back, let's see if we don't have to. And that went on for a while and now it's flipped over and now it's just like straight up, we have too many people. Like we, how could we ever maximize the potential of this AI technology if we have this many people in the way, so to speak? Here's the New York Times. Internal documents show the company that changed how people shop has a far reaching plan to automate 75% of its operations. Amazon's US workforce has tripled since 2018 to 1.2 million. But the automation team expects the company can avoid hiring more than 160,000 people in the United States it would otherwise need by 2027. That would save about 30 cents on each item that Amazon picks, packs and delivers to customers. That's dystopic here. By the year 2023, by the year 2033, that would translate to more than 600,000 people whom Amazon didn't need to hire. Put this chart up. Number of Amazon employees per facility. On the left you can see that is now cascading lower since the pandemic packages handled is rocketing higher. Packages handled end to end per employee. So these are the pick and pack robots, these are the conveyor belts, these are the truck loading robots. This chart is never going to reverse. Do you agree with that?

[B]

I do. I do. So throw up a few more charts that we made. So Amazon went crazy, particularly during the pandemic. It wasn't their fault. All sorts of supply chain disruptions and issues and they overhiered and they've spent the past couple of years riding that ship. And this number will never reach a new all time high. 1.5 million employees. And did you know that they are the second largest employer.

[A]

I did know this.

[B]

In the United States behind Walmart.

[A]

Yeah, I did know this. And Walmart is only behind the federal government and that's it. Like, you know what I mean? Like these numbers are insane numbers of people. And yeah, if Amazon is, if Amazon is going to stick to its, its Roots of, you know, it's, it's always day one and you know, there's always room for delighting the customers with more efficiency. Of course, this is where it's headed. But I think what's shocking people, Michael, is that these aren't warehouse jobs. This 14,000 is white collar employees. So this is everything from engineers to like assistant vice presidents. But this is no longer about people in the warehouse. This is now biting into bone.

[B]

Well, one of, one of the, one of the people quoted in one of these articles, there's been somebody over the past week said when I got hired, Bezos was like six. There was like six managers between me and Bezos. Now there's like 28 or whatever the number is between me and Jassy. Like, there's so much bloat.

[A]

And that's how tech, that's how tech companies die. All right, Wall Street Journal. This is, this is, this is not just the story of Amazon. This is now the story of corporate America. How's this for a lead? It is the corporate gamble of the moment. Can you run a company increasing sales and juicing profits without adding people?

[B]

Yes.

[A]

American employers are increasingly making the calculation. They can keep the size of their teams flat or shrink them through layoffs without harming their businesses. AI, blah, blah, blah. Many companies seem intent on embracing a new ultra lean model of staffing where more roles are kept unfilled and hiring is treated as a last resort. At Intuit, every time a job comes open, managers are pushed to justify why they need to backfill it. Quote, that typical behavior that settles in and we're all guilty of it is historically, if Jane Doe leaves, I've got to backfill Jane. Now. When someone quits, the company asks, is there an opportunity for us to rethink how we staff 100%. This is the story. You made a comment at the top of the show about profitability margins. And this is where it's coming from. Less bodies, revenue growth minus headcount growth.

[B]

It's great for earnings, terrible for society. So UPS was, was in on the mix today. Here's a headline from Bloomberg. UPS jumps after sweeping job cuts Push profits above estimates. Throw this chart up. UPS has been a dog for the last 10 years, but interestingly, I didn't realize that it actually kept pace with the market until the 20 until 2022. They announced earlier in the year that they are severing ties with Amazon, who is their largest and least profitable and most time consuming customer. The stock fell 15 that day. It was like the worst day in two decades or something like that. So I was looking through its call today and operational update. This is the first thing they wrote. Integrated agentic AI into our next gen brokerage capabilities to streamline formal entry processes. They spoke a lot about this on the call. Obviously Amazon was mentioned a million times, but they're laying off tens of thousands of people. And guess what? The stock market loved it. You know, it's, it's a, it's a cold war.

[A]

Loved it.

[B]

But the stock was up, I don't know, 9% today. Same thing with Target. Target cuts 1800 corporate jobs. Corporate jobs, not people in the store.

[A]

No, these are paper. These are paper pushers.

[B]

It's first major layoffs in a decade. And look at the chart again. I mean, this thing has been punished a long time, but the stock market loves it. So it's going to keep happening.

[A]

I think it'll keep happening so long as the share price reaction is positive. And it will be positive because I think Wall street now understands the year of efficiency is becoming the decade of efficiency. Like there's no end in sight to the levels of efficiency that these companies need to pursue.

[B]

Great for investors. I don't want to say horrible for society. Cause I don't want to. I don't want to go crazy. No, it is, but it's.

[A]

We don't have enough time on the show to cover it, but it absolutely is. And if this wasn't your signal to own the robots and be an investor in the market, I don't know what you're waiting for. I told you 10 years ago that was the name of the game. Strategy is the first digital asset treasury company to receive a rating on its debt. S and P issued its first ever rating in the space and it gave strategy a B minus, which is junk, but I think with a very good explanation why it's not a commentary on the way the company's being run at all. It turns out it's just a lack of dollar liquidity, which is incidental to the company's whole point of existing, which is to not hold dollars.

[B]

I mean, B minus is not bad. We were C students. It's not bad.

[A]

That's right. No, that's my point. They're not, they're not saying this company is trash. They're just saying, like, typically when we look at other companies, we would want to see more dollar liquidity. In the case of strategy, the whole purpose of its existence is to be short dollars and long the coin. So it's like it's not a. It's not a disrespectful B minus, but it's a B minus nonetheless. But it forced S and P to actually look at this thing like a company on the. From on the debt side because they were a big debt issuer. What are your thoughts?

[B]

You know, I mean, I have nothing else to add. I want to throw some charts on because. Can I. Can I. Can I have a critique? Could you. Could you stop with the price and the market cap charts? I mean, throw this chart up. Yes, Sean, to make. This is garbage. Come on. This is beneath you.

[A]

Wait, what. What did I do?

[B]

You. You. This is a thing that you do. You ask for the. The price and the market cap, and it's the same chart. Here's what you do.

[A]

I wanted. I just wanted. I wanted the market cap number. I wanted to point out it's an $80 billion market cap with B minus weighted debt. That's what. I wasn't comparing the price with the market cap. I wanted the data. I wanted the data because that's. I think that's highly relevant. I wanted to ask you, how many junk rated publicly traded companies do you think have a market cap above $10 billion? Well, almost none.

[B]

I wish you had.

[A]

So that's what I was. That's what I was looking for because.

[B]

We could have found it. All right, let me. So let me. This is how you chart. This is how Matt. This is. You went to. Sean, no offense.

[A]

Hold on.

[B]

I went to the chat is.

[A]

The chat is not happy with you. So just saying. Mommy and Daddy are fighting. Tell Michael to chill.

[B]

I will not chill.

[A]

Josh getting called out.

[B]

We have standards here. We. We. We are professional chartists, so. I brought the good stuff. You're getting cooked. I brought the good stuff. Oh, yeah. Oh, yeah. This is how you cook. Chart on, please. All right, what I show.

[A]

You made the same chart.

[B]

No, I didn't, asshole. I'm showing the value of their bitcoin versus their market cap. This is not the same as what you did.

[A]

And then.

[B]

Hold on. Chart off. Yeah. What's so funny? What's so funny?

[A]

Mommy and daddy are fighting. I feel like this is my fault.

[B]

All right, chart back on. Okay, look at this chart. So the bitcoin versus the market cap and then what chart kid did on the right hand side was he divided it so early on, when strategy was the only game in town. Formerly known as microstrategy. At the time, it was the only way for people to get crypto exposure in their brokerage account outside of GBTC.

[A]

In, like, a stock.

[B]

This was the vehicle of choice. And it traded at a mega premium. And even in the early days of this most recent bull market. Look at that run. Holy cow. It was 3.5 times a premium to its underlying. And guess what? Whoosh. Other way. This thing is getting cooked. One more chart, One more chart. Next one. Okay, here we go. So this is that chart. Zoomed in a little bit, actually. I'm sorry, this is a different chart. My bad. This is strategy divided by Bitcoin. And investors are just not having anymore. They said, listen, I don't need MSTR to get my leveraged exposure to crypto. If I want leverage exposure, I could literally just get it. I don't need this anymore. And I don't know how this premium comes back.

[A]

This is Jim Chanos trade from the short side. He's long. He's long Bitcoin. I don't know if he's using the ETF or not. I actually. I think I'm seeing him for dinner in a couple of days. I'll ask him. It is short. Yeah, it's working. He's killing it with this trade. And look, this is one of those things where when he rolled it out, I'm like, yeah, of course that's going to work. And then two minutes later, it's like, no, wait a minute. Of course that's not going to work because everything's. Because everything's stupid now. But it did work. And I'm really happy for him. I think. I think your explanation, like, it was the only way for people with traditional brokerage accounts to be long Bitcoin. And then all of a sudden, it wasn't. I think it's just leaving one thing out. I think you're right. You're missing one component. There was a moment shortly after the election, but before the inauguration of Donald Trump, where all of these crypto things were being one by one. The Trump family, all of them, Don junior Coin, they were all like, saying, don't worry, Gensler's done that. Era's over. Everything's gonna get fixed. David Sachs in the White House, blah, blah, blah. There was like.

[B]

I don't.

[A]

I want to say that was like a four to six week period of time. Michael Saylor was on TV five days a week in that period of time, that's when he, like the sailor phenomenon. We. We had him at Future Proof in Miami, which was March. So, like, there was this. There was this season, the season of Sailor, where he was like, you couldn't turn your head left or right without seeing somebody talking about strategy or him explaining it to somebody. And that I think played a really big role in getting the share price to three and a half times the value of their Bitcoin. And I think I would just point out it's really hard to keep that media momentum up. I seem to be the only person that's capable of doing it for more than a year or two. So it is not easy to make those appearances and tell the story. And so I think that's a miss. I haven't seen him around lately. There comes a point where you can't. There's no more podcasts left to do. Well, if you're right, you don't have a new story. They don't book you on the shows.

[B]

I am excited to listen to the call because everything that they've. That he's been saying, it's not working anymore. And I don't know how you get that mojo back.

[A]

I mean, I would offer myself up as a, as a consultant if he wants. All right. Anyway. Interesting though. For people that are interested in reading about Microstrategy as an issuer, visit S and P. I think we've come to make the case. I have two small cap stocks breaking out. One of them is your idea, but it was my idea a generation ago. Let's put this up. That's true. IMAX. I told you I found my pitch from 2004 when I was selling this shit over the phone. Anyway, I was right 21 years ago. And you were right. And you were right one years ago. IMAX is the most important entertainment company in Hollywood other than Netflix and Disney. I would say it's number three. Every major release coming out in the next. In the next year, but probably the next five years is desperately locking up as many IMAX theaters as they can. They're building new 70 millimeter theaters because that extra large format is not available enough. The converted theaters at AMC and Cinemark, like the distributors, the studios, the Chris Nolan Odyssey, okay, they're actually. This is true. IMAX said there is so much demand for tickets that the exhibitors, the theater companies themselves, are converting as many of their theaters to IMAX as they can so they can get in on the selling tickets early thing, like as soon as possible. They put the tickets up for IMAX format a year in advance. No one in the film industry has ever thought to do this. It's the first time they sold it out in like an hour.

[B]

Yeah, it's crazy.

[A]

You cannot see the Odyssey and It's the greatest cast ever assembled for a movie like this, we should point out. But it doesn't matter. It's proof of concept. We're now treating movies like concerts. We're buying tickets six months a year in advance and there's not enough capacity for imax. So they're going to make a lot of money selling the cameras, the equipment, because Chris Nolan filmed this movie in imax, which is the thing that we should point out. It's not a regular movie converted, it's filmed in imax.

[B]

They call it FFI on the Call. That's like a thing now.

[A]

Yeah.

[B]

Film for imax.

[A]

Yes. So they're going to sell a ton of equipment to other studios who want to have one of these a year, which they all should. This is how you get a billion dollar movie, by the way, the conversion fees, existing theaters that want to become iMaxes. I read that the backlog is 500 theaters or something and growing.

[B]

They. They announced a huge deal with Cinemark yesterday.

[A]

Yes. So there's tons of money to be made. This is a small cap stock. It's some weird thing where it's like Canadian, but it's based in New York, blah, blah, blah. I think this is just the crown jewel of the film industry and it's become the most indispensable part of opening a movie. They're going to have things like Netflix commissioned Greta Gerwig who made Barbie to do Narnia, and it's exclusively coming out in imax. You can't see it in a regular theater. Like there's stuff coming out in IMAX that I think is paving the way for this to be a much bigger story. And I think the stock continues to work. So bravo to you. I'm not in it. I'm waiting for a sell off to buy it. It'll probably go to 50 before I have a chance. Do we have that chart up one more time? I had a technical chart. I don't know where this thing came. There we go. Like this is going to go right?

[B]

There's not. It didn't leave you. Like, what are you waiting for?

[A]

All right, next.

[B]

Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa. Hold on. I have two things to add. I can't let you go without this. I love the case. On the call, they said the North American box office was down 11% in the third quarter and the IMAX box office globally was up 50%. Throw up this chart. This is the share of the box office, domestic, China, global, international, ex China. And it's up into the right. Obviously look at the next chart. Top 10 grossing IMAX titles. So to your point, it is a concert. When people want to see something on the big screen, they're going to imax. And then you mentioned like the slate that's coming up. Yeah, it's. It's huge. And everybody's in on it. So it's going to continue to work.

[A]

Look at, right, you have a Super Mario movie coming. Avatar, Another Avatar. You have Toy Story 5, the Superman spin off Supergirl. Like these are all going to open so big on IMAX screenshots.

[B]

Dune, Avengers. Yeah, it's working.

[A]

Oh, yeah. Dune 3. There's so much on. On the slate for IMAX. And I like, companies cannot live without that now if they plan on exhibiting. It's not enough to just put these films in theaters. You're not gonna hit your potential. You need them in IMAX theaters. And I can't believe this stock is not fully reflecting that reality yet.

[B]

David Ellison. David Ellison should buy the company. It's a billion dollar market cap.

[A]

There is an overhang with the China business. It's like a subsidiary and it's not. I don't think it's wholly owned with imax. And I think that's part of, part of what's been a problem with the stock in this, in this era. But I feel like that's the kind of thing that could get cleaned up if they figure it out. They already have.

[B]

What's the other one? A twofer.

[A]

Yeah. Etsy. We buy. We buy charts that look like this, right?

[B]

Let me see. We certainly do.

[A]

Can I show you?

[B]

But I don't.

[A]

Here's a price. Here's just a price chart. We buy charts like this?

[B]

No, we do, but is Etsy Chachke. What is this?

[A]

It's sort of a cross between Amazon and ebay with a twist. This is people who make their own crafts. And I know that sounds ridiculous, but like, let me cook. There's a lot of home design stuff. This is. It's not just people making keychains and bracelets. There are people. There are people who like fashion these incredible fixtures. Metal, like they. It's people. It's giving. It's basically like a Shopify. I should have, I shouldn't have said Amazon. It's a Shopify mix with an ebay. It's a combination of vintage things with crafts that people actually make. And the people who use it absolutely love it. I've never bought anything from Etsy. I've never sold anything on Etsy. So I don't have that firsthand experience. But I'm going to tell you three things. Number one, when prices in the economy are high, Etsy is a pretty obvious go to place to buy people gifts because you're not buying from corporations, you're buying from the people who make these things. Number two, they just announced AI seller tools. They're in the AI business too. The goal is to keep people on the site and not bounce off because they can't find the thing they're looking for. And they're going to utilize AI to make that process smoother and more efficient, basically sell more things. Number three, Lone Pine just took a huge stake in the company and that guy, almost always Steve Bandell, that guy almost always wins. And this is the area that he wins in. This is what his fund has become synonymous with these consumer facing platforms that have the ability to get much larger. He tends to invest at these kind of turning points. I know we don't have a long term chart of Etsy. This stock went into an 80% drawdown and is now on the verge, is now making a hold on making a 52 week high. But it's really erasing like years of underperformance and it sort of looks like it's finally figured out its business model and it's having a moment. So I'm not in this stock. It's a small cap, so be careful. I think the market cap is like 7, 7 billion. It's tiny. Its name is much bigger than its market cap. Most people who are on the Internet are aware of Etsy. Very fewer investors are aware of Etsy. The stock. I love that disconnect. I feel like IMAX benefits from that disconnect.

[B]

I like the story. I think it was a good pitch.

[A]

Was out of my, I said, look, don't say I never gave you nothing. I brought two gems, two small cap gems to the table tonight.

[B]

Yeah. Okay. Mystery chart time. John, if you would please. All right. Would you catch this falling knife?

[A]

Well, is it a ratio chart or a penny stock?

[B]

It's a ratio chart. Would. But would you catch this falling knife?

[A]

No.

[B]

Okay, next chart. Wait, back, back.

[A]

If I were in the knife catching business, I would catch this falling knife because it looks like it just got. It became. It went from a downtrend to a caricature.

[B]

So stretch too far to the downside. Yes, I would agree. Next chart. Okay. Would you take profits here? Would you sell this chart?

[A]

Maybe I don't have enough information to say yes.

[B]

I'm just, just Purely based on the charts.

[A]

No, because I never sell anything good for you.

[B]

That's why you're a good investor. Okay, these are the same charts. One is. I just flipped the numerator denominator.

[A]

What are. What, are you playing games with me now?

[B]

I am. I'm playing games with your heart.

[A]

You're playing mind games with me. Wait, it's the same chart, but you showed it to me. Upside and downside.

[B]

Yeah, John, go back.

[A]

And I said two different things about what I would do. That's not good.

[B]

No, no, no, you were pretty consistent. No, I. Honestly, that was better than I thought because you were pretty consistent. All right, so these are. I can't. I can't give clues without giving it away. Just guess. Honestly, I can't give a clue without giving it away.

[A]

What do you mean you can't give a clue without giving it away?

[B]

We spoke about. We spoke about this dynamic at the top. Top of the show.

[A]

Oh, we did.

[B]

We did.

[A]

Okay, so one is Amazon and the other is bigger.

[B]

Think broader. Zoom out.

[A]

Okay. Oh, all right, so one is tech and the other is the S and P. Close enough.

[B]

It's. It's the S and P divided by the equal weight. I mean, this thing really crashed. Or reverse crashed, whatever. Like.

[A]

Wait, so which is going up, though? The S and P is going up.

[B]

Correct. So cap weighting destroyed. Equal weight over the past couple of sessions. Like, destroyed.

[A]

Do you know? Chart off. Do you know there are four of these bad boys? Four Mag. Seven stocks in the Dow.

[B]

There's four. All right, so I forgot. Wait, Amazon.

[A]

Two of them got added last year. I don't even know. I didn't even realize.

[B]

Google, Apple, Nvidia is not.

[A]

Yes, it is.

[B]

Nvidia's in the DAO.

[A]

Yeah, I think so. I think they added it last year.

[B]

I. No, no.

[A]

Yeah, I think it replaced Intel.

[B]

Did it?

[A]

Let me ask. Gemini, you son of a guy.

[B]

Big if true.

[A]

I think they did.

[B]

So Meta's not in.

[A]

Yeah, they replaced intel on November 1, 2024. Boy, was that a buying opportunity in intel, by the way. You didn't realize that, did you?

[B]

I had no idea.

[A]

Do you know that Amazon's in the Dow?

[B]

Yeah, I said Amazon, Apple, and Google. So what's not?

[A]

And Microsoft.

[B]

Meta's not.

[A]

Meta is not. Isn't that interesting? And Tesla probably never will be. Meta is not in the Dow. It's the only one. Other than it's. Elon and Zuckerberg are not in the Dow.

[B]

That's disrespectful. I wonder why is that interesting?

[A]

Wait, I have one more thing to say. Metta and Tesla are not in the Dow and they're the only ones with their original founder as CEO other than Nvidia. So Microsoft's in the Dow with the third CEO, right? Alphabets in the Dow with the second. Amazon's in the Dow with the second CEO. Alphabet I think is on its third. The Dow is Eric Schmidt.

[B]

So of the, of the top five companies by weight, it's Goldman, Microsoft. So that's the only one. Caterpillar, Home Depot, and United Health.

[A]

Yeah, okay.

[B]

And yeah, sure, Price.

[A]

But Apple's important in there. Nvidia is getting to become important.

[B]

Wow, wow, wow. I know that.

[A]

Interesting.

[B]

I had no idea that video was in there.

[A]

This is a great place to put the pin in it. And say thank you to everybody who joined us for the live. Hey guys, two things. Number one, thank you so much for the huge outpouring of of affection and feedback for the episode we did with Jim Cramer. If you haven't seen that yet, it's right here on the channel or listen to it on our podcast feed. We put it up as a special last night. Thank you so much. We really love all of your comments and all the nice things that everyone said and hope we can see you at the next live TCAF that we do tomorrow is Animal Spirits first thing in the morning. We'll do Ask the compound later in the day and then at the end of the week we have an all new compound and friends new guest and it's, it's gonna be a good one. New guest, same old Michael and Josh. So thank you guys so much for watching and listening. We love you. We'll talk to you soon.

[B]

Sa.