About this Video

• Video Title: Blockbuster Week For Big Tech Earnings | Prof G Markets
• Channel: The Prof G Pod – Scott Galloway
• Speakers: Scott Galloway, Ed, Claire
• Duration: 01:05:17

Introduction

This Prof G Markets podcast episode discusses the week's major economic news, including a contraction in US GDP, a downturn in Chinese manufacturing, and the launch of Amazon's Project Kuiper. The episode then analyzes the recent earnings reports of major tech companies (Microsoft, Meta, Apple, and Amazon) and concludes with a discussion about the resumption of student loan collections.

Key Takeaways

• US GDP Contraction: The Q1 2024 US GDP contraction was primarily due to a surge in imports, an accounting issue related to net exports and tariffs, rather than a fundamental economic downturn. Future GDP reports will provide a clearer picture.
• Chinese Manufacturing Slowdown: China experienced its worst manufacturing contraction in nearly two years, leading to decreased export orders and potentially shifting trade relationships towards Europe.
• Project Kuiper Launch: Amazon launched its first internet satellites, marking a step towards competing with SpaceX's Starlink, although Starlink maintains a significant lead.
• Big Tech Earnings: Microsoft and Meta exceeded expectations, showing strong revenue and profit growth, particularly in cloud computing (Microsoft) and daily active users (Meta). Apple and Amazon delivered mixed results, with some areas of strength but concerns about future growth and the impact of tariffs.
• Student Loan Collections Resume: The US Department of Education restarted forced collections on defaulted federal student loans, impacting millions of borrowers and potentially affecting credit scores. The high cost of higher education is identified as a key underlying issue.

Here's a list of companies mentioned in the podcast, along with an assessment of the podcasters' sentiment towards their stocks, based solely on the provided transcript:

Companies and Podcaster Sentiment:

• Microsoft: Bullish. The podcasters highlight record revenue, profits, and strong cloud unit growth as positive indicators. The decline in capex is noted, but not viewed as overwhelmingly negative.

• Meta: Bullish. Strong revenue growth (16%), a significant increase in daily active users, and positive trends in time spent on their apps are seen as very positive. Increased capex is mentioned, but in a positive light, indicating investment in growth.

• Apple: Bearish to Neutral. While the earnings are described as "pretty solid," concerns are raised about Apple's valuation (high P/E ratio relative to growth), the reliance on share buybacks, and a potential "multiple contraction." The lack of exciting new products is also mentioned negatively. While not explicitly stated as "sell," the overall sentiment leans towards bearishness.

• Amazon: Mixed to Bearish (leaning bearish). A strong quarter overall is acknowledged, especially in advertising. However, the slight miss on AWS growth (a key indicator for Wall Street) is seen as significant. The podcasters express concerns about Amazon's vulnerability to tariffs and ultimately suggest shifting investments away from Amazon stock towards European and Asian holdings, especially Alibaba.

• SpaceX: Neutral to Slightly Bearish (regarding competitive position). The podcasters acknowledge Starlink's current dominance in the satellite broadband market but express concern about the potential for increased competition from Amazon's Project Kuiper and the risks associated with one company controlling such a large share of low Earth orbit satellites.

• Alibaba: Bullish. The podcasters predict a surge in Alibaba's cloud unit revenue due to shifting global trade dynamics and a decreased preference for American cloud providers among European and Latin American companies.

• Nvidia: Not explicitly discussed but implied bullishness. The podcasters mention Nvidia's significant GPU sales to Meta, implying a positive view on the company.

• Toyota: Not discussed in relation to stocks. Mentioned as an example of a company with more stringent loan criteria.

• Other Companies Mentioned (sentiment not expressed): Palantir, AMD, Novo Nordisk, Uber, Disney, Shopify.

Important Note: This analysis is purely based on the expressions and opinions explicitly stated within the provided transcript. The podcasters' actual investment strategies or long-term views may differ.