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Podcast Summary: Prof G Markets - Episode: Blockbuster Week For Big Tech Earnings + Can the U.S. Fix Its Student Debt Crisis?
Episode Overview In this episode of Prof G Markets, hosts Scott Galloway and Ed Elson analyze recent significant developments in the capital markets, including the latest U.S. GDP report, the performance of major tech companies during their earnings announcements, and the complex issue of student debt in the United States.
Key Topics Discussed
- U.S. GDP Report
- First Contraction: The U.S. GDP shrank by 0.3% in the first quarter, marking the first contraction in three years.
- Imports Surge: A significant increase in imports (up 41%) contributed to this contraction, as companies rushed to import goods ahead of impending tariffs.
- Misinterpretations: Scott emphasizes that the GDP report is more of an accounting anomaly rather than a clear signal of economic decline, suggesting that future reports will provide a more accurate assessment.
- China's Economic Data
- Manufacturing Contraction: China's factory activity has declined sharply, leading to lowered GDP growth forecasts from major financial institutions.
- Geopolitical Implications: There is a shift in trade relationships, with European export orders to China rising while U.S. exports to China are falling.
- Amazon's Satellite Internet Project
- Project Kuiper: Amazon launched its first internet satellites to compete with SpaceX's Starlink, although they launch significantly fewer satellites.
- Market Analysis: Scott believes Amazon's established brand and potential integration with Amazon Prime could help it gain market share, despite currently being behind SpaceX.
- Big Tech Earnings
- Microsoft: Posted record revenues and profits, driven by strong cloud growth (33% increase), leading to a significant stock rise.
- Meta: Also experienced a strong quarter with a 16% revenue increase and a 6% rise in stock value, benefiting from enhanced ad targeting through AI.
- Apple and Amazon: Both companies reported solid earnings but showed signs of weakness, resulting in stock declines due to cautious guidance and missed growth targets.
- Student Debt Crisis
- Resumption of Collections: The Trump administration paused forced collections on defaulted student loans during the pandemic. This has now resumed, affecting millions.
- Consequences: Scott discusses the moral implications of student debt and the need for universities to be held accountable for their tuition pricing.
- Lack of Awareness: Many borrowers do not understand their loan obligations, leading to poor financial outcomes, including devastating impacts on credit scores.
Key Takeaways
- Economic Indicators: GDP can be misleading and requires careful analysis of contributing factors, particularly imports and exports.
- Market Dynamics: The competitive landscape in technology and satellite internet is intense, highlighting the importance of brand loyalty and consumer integration.
- Student Debt: Addressing the high cost of education and educating borrowers about their financial responsibilities is crucial to avoid generational financial strain.
Conclusion The episode presents a thorough examination of current economic conditions and their impacts on major tech companies and the broader implications of student debt in America. Scott and Ed highlight the complexities involved in understanding economic signals and the importance of transparency and responsibility in financial dealings.
For further insights and continuous updates, listeners are encouraged to subscribe to the Prof G Markets newsletter and follow the podcast on various platforms.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00This episode is brought to you by On Investing, an original podcast from Charles Schwab. I'm Kathy Jones, Schwab's Chief Fixed Income Strategist. And I'm Lizanne Saunders, Schwab's Chief Investment Strategist. Between us, we have decades of experience studying the indicators that drive the economy and how they can have a direct impact on your investments. We know that investors have a lot of questions about the markets and the economy, and we're here to help. Join us each week as we explore questions like, how do you evaluate corporate bonds? And what sectors of the stock market are outperforming?
0:31So Kathy will analyze what's happening in the bond market and at the Fed, and I'll give you our latest analysis of the equities market and the U.S. economy. And we often interview prominent guests from across the world of investing and business. So download the latest episode and subscribe at schwab.com slash oninvesting or wherever you get your podcasts.
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1:37Visit sierra.ai to learn more. Today's number,$16.6 billion. That's the record amount American consumers lost to scammers and cyber criminals last year. Ed, I just don't have a joke about that, but I heard a lot of young men listen to this podcast. So I have the ultimate pickup line. You ready, Ed? Mm-hmm. You go up to someone you're attracted to and you say, can you take a picture of me? Everyone always says yes Right No one ever says no to that Yeah And then you say Can you turn on the mirror function And take a picture of the two of us And she'll say Why And you say Because someday I'm going to show it to our kids Boom
2:21Ed,
2:26that's how you lose your virginity at 19 No it isn't absolutely not well hold on claire would that work that's a good line no i don't know it depends how cute he is yeah better be very handsome this guy better be incredibly handsome that's a very telling comment because the difference between romance and creepiness is the perceived attractiveness of the person making the overture and it's impossible to know is this creepy or romantic scott have you ever actually used one of these pickup lines in real life i think they're hilarious i i love like the whole do you believe in love and first sight or should i walk by again or you know i love that shit uh but no my my current and hopefully future partner um 20 what 21 years ago i just went up to her at the pool of the rally hotel and i said where are you guys from so that wasn't much of a line um that wasn't that creative um but i was much more handsome then, so I didn't need to be that creative.
3:25I think pickup lines are more for banter. Certainly on this show. Yeah. How about you? What's been your approach? I've always been, where are you from as well? But I feel like it would be cool to have an actually good pickup line that's provably worked. But I feel like the thing that we're learning, at least in the past two minutes, is that a lot of this has to do with, are you handsome? I don't know. I don't think that's as true or not as true for men. I think men get turned on with their eyes, a woman get turned on with their ears. I think if a guy has a good rap. Yeah, but to get in there at the very beginning.
3:58If you can make a woman laugh, you can ask her out on a date. I think it's all about the rap. I think women are much more thoughtful in terms of their criteria for mating than dudes. Well, by the way, Ed, I didn't say handsome. I said cute, which could mean funny, charismatic, confident. It's all about the way he says it. That's a good point. Ed rolls up and dials up the English accent. He's like, I'm from Princeton. I went to Princeton. Get to the headlines, Ed. Let's start with our weekly review of Market Vitals.
4:37The S &P 500 climbed, the dollar rose, Bitcoin jumped, and the yield on 10-year treasuries fell. Shifting to the headlines. U.S. GDP shrank 0.3 % in the first quarter, marking the economy's first contraction in three years. A surge in imports as companies raced to get ahead of tariffs led to a sharp drop in net exports. The major indices all fell on that news. China's factory activity fell into its worst contraction in nearly two years. New export orders also dropped to their lowest level since December 2022. In response, Chinese officials have pledged support for affected businesses and workers.
5:12And finally, Amazon has launched its first internet satellites into orbit in a bid to compete with SpaceX's Starlink. The company's plan, called Project Kuiper, should begin providing broadband service later this year and eventually will deploy a constellation of 3 ,200 satellites. So let's start here, Scott, with this GDP report. A lot of people are seeing this report and they're saying, look how bad this is, look at what Trump's done, look how bad this is for the economy, the economy's contracting, etc. And I just want to point out, before we dig into it, that's not really what's going on here.
5:49I think the two things to note, one, this is a measurement of the economy before the tariffs went into effect. This is Q1, so we're not actually seeing the impact of the tariffs themselves. And two, the reason you're seeing this contraction is more of an accounting blip than anything. And I just want to remind us of what GDP actually is, just some macro 101 here. GDP is an equation. I mean, it's a measurement of our economic output, but the way we get to that number is an equation. And one of the elements in that equation is something called net exports, which is basically you take our total exports and you subtract our total imports.
6:34And that's supposed to tell you how much stuff we actually made in America. And so what that basically means, if you have a giant increase in imports into your country, that's going to mean that the net exports number goes down, which means that the GDP number will go down. And that's what happened last week, because everyone knew in Q1 that tariffs were coming. And so everyone scrambled to ship as many products as they possibly could into the US before the tariffs went into effect. And that's why we saw imports into America surge 41%, which ultimately had a negative impact on GDP. This isn't the big tariffs are bad report that you might think it is.
7:17It's the next GDP report that we will see in July. That's the one that's going to tell us what's really going on. And that's the one where I think we can have a more honest analysis of what tariffs have done to America. But Scott, your reactions to this GDP report, which made a lot of headlines and a lot of people were quite freaked out about it. I don't love GDP. And also, GDP is a bit of a lagging indicator. And I think that the Trump administration can rightfully say this is more about the economic policies of Biden than it is about us. And your analysis around the surge in imports kind of contaminating the data is the correct one.
7:55But why have we had a surge in imports? Because people feel insecure about the economy or specifically these tariffs. And when I look at the uncertainty index, which has hit a new high since like the 80s, and consumer confidence, which has hit a new low since COVID, what it largely pretends is that we're going to see a decline in GDP in the next quarter. I believe you're going to see a dramatic decrease in inventory in stores. If you just look at those incredible kind of heat maps of shipping lanes, there are all these ships in kind of Hong Kong Harbor that are just waiting to be loaded and aren't being loaded.
8:34And then the port of Los Angeles, which I believe is the biggest port in the Western Hemisphere, there's very little offloading taking place. So at some point, and I don't know if the lag is two weeks or two months, you're just going to see an absence of inventory in stores. And consumers have gotten to the point where if they can't get what they want, they're so used to such a robust supply chain, they're going to think, A, if they're not feeling good about the consumer economy, they don't want to aggressively buy that new home gym or whatever. And B, if the products they want are available, they use that as an excuse just not to buy.
9:06So I think winter is coming, and that is – I would imagine the next quarter there's going to be – they'll find another reason to blame Hunter Biden or something. But this is, they get a pass on this one, right? But the fact that there's, again, this massive surge in imports is because our economy is making asymmetric, irrational decisions based on an unpredictable administration and unpredictable economic policy. That sort of reminds me of one of his latest, Trump's latest truths on Truth Social. I hate that we have to call them truths, but that's what they are. But he basically said, so when the stock market ripped after he was elected, he said, welcome to the Trump stock market.
9:55And today, I think last week, he posted this truth, this tweet that said, this is the Biden stock market that I inherited. And it was sort of marking his first 100 days in office, which have been one of the worst stock market performances for the start of a presidency ever in America. and it is sort of a reminder of how basically his strategy to distract us from what is really going on. You mentioned there that GDP is a lagging indicator and we can't necessarily blame Donald Trump entirely on this contraction, or at least that's not the right argument to make. But when it comes to the stock market, which is not a lagging indicator, the stock market is live, real-time, forward-looking indicator.
10:46That's the thing to focus on. And that's the part where you cannot say, this is the Biden stock market. The stock market is live. It's real-time. This is the Trump stock market. S &P down 4%. The Nasdaq down 8 % year-to-date. So that's the argument that you definitely cannot make, which of course he is making. Let's move on to this manufacturing data. China had its largest drop in manufacturing activities since 2023. Export orders fell to their lowest level since COVID. UBS, Goldman Sachs are now lowering their GDP growth forecast for China to lower than 4%. And just for some context there, we discussed this earlier this year, China at the beginning of the year had a growth target of 5 % positive GDP growth.
11:34So it looks like You know, they're not going to come anywhere near that. In fact, I think we actually predicted that, or we at least said that 5 % was too ambitious. So this manufacturing data has come out. It's not looking good. Scott, your reactions to this new data? They likely will be hurt more than us in the short term, but their tolerance for pain is much greater than ours. And I think over the medium and the long term, China's actually a winner because I think they're going to be more aggressive about establishing relationships with new partners that'll be more apt or less reticent to engage in business with them.
12:10And also, you're already seeing that basically we're thrusting the EU into the arms of China and vice versa. Chinese e-commerce exports to the US fell by 65 % last month, but exports to Europe rose by 28%. And also what we forget is that Europe is actually a bigger trading partner. So that's 28 % on a bigger number. So the big winner in the short term is the EU, because you got to think that a lot of these factories want to keep their assembly lines humming. And so they're going to call a lot of potential customers in Europe and say, hey, I can get you a great deal on this widget. I mean, this is effectively the way I would describe it.
12:49America's not dead, but it's the equivalent of a death of the kind of existing post-World War II world order as led by the United States. And that is these traditional trading alliances that were built up over the last 80 years of trust, rule of law, intellectual property. It feels like that is dead. And what we have is the largest yard sale from an estate sale from this rich old lady down the street who died. And everyone's showing up and trying to figure out how do they get their piece of a$25 trillion economy. I think our economy is going to shrink. and a lot of other nations are going to try and figure out how they fill that void by either trade relationships with each other, grabbing market share from U.S.
13:32companies that will no longer have the same most favored nation status that they enjoy with their international partners. And you're going to see a lot, in my opinion, you're going to see a lot of small, medium-sized businesses go out of business in the U.S. And that economic activity will be picked up by other people when the economy or when the global economy comes, you know, fills in those holes, if you will. So it's interesting to try and think about who are the winners in the short, the medium, and the long term. Biggest loser in the long run, hands down the U.S., both short, medium, and long, I think.
14:05But I think the EU is actually going to be a big winner here because I got to think China's showing up and saying, hey, the sale of the century is right now on Chinese goods. I think this data, it sort of highlights the point that Ryan Peterson made when he came on the podcast, which was he was really trying to emphasize, which the Trump administration doesn't seem to understand, that trade is a positive sum game. You know, when you make something and I decide to buy it, we're actually both benefiting there. We're both receiving value from the transaction. So when we decide as a nation that we want to get into a trade war with China, it means that we lose out in a lot of ways in America in the form of we have less stuff, which leads to higher prices.
14:51And also China loses because they're losing business. They want to make stuff and ship it over to us. And we're now beginning to see that reflected in the data. And that's what this manufacturing activity data tells us. China is losing. It's actually negatively impacting their GDP. But of course, that's going to be the same story over in America. And your point, I think, is the right one. Who are the winners here? And it is so interesting to see Europe being reflected or proven as a winner in this data. You know, we talked recently about how China is trying to rekindle these relationships. They're sending all these trade delegations to Europe.
15:29They went to Hungary and Sweden and Germany. And I was sort of thinking, I wonder if that's going to work. Like, I wonder if Europe buys that. And to me, those numbers you mentioned, exports to the US down 65%, but exports to Europe up 28%. And as you mentioned as well, off a large base, my takeaway is it's working. Europe is also beginning to lift some of these tariffs that they had on China. specifically EVs. They're beginning to open negotiations back up. It does certainly feel that as we close off this relationship with China, we're basically sending China into the arms of all of our allies, essentially.
16:12I think Americans are about to get a very, eat a very cold lunch in terms of recognizing just how good they had it past tense, that we had so many amazing trading relationships that resulted in a robust supply chain, really inexpensive products, tremendous opportunities for entrepreneurs. That whenever you start an American company, you have access to global markets. When I started L2, when we got like employee 30, we opened an office in London. And then when we got to employee 60, we started pitching clients in China. And when you go over there as an American company, you're pretty well received and you understand the cultures and it's easy to do payments and the contracts, the business contracts were not that difficult.
16:59I think that's all about to change. Let's talk about Project Kuiper. We've been hearing about this for a while now. This is Amazon's satellite internet project. It's basically Amazon's equivalent of Starlink. And last week they launched their very first satellites into orbit, 27 satellites to be exact. The plan is to eventually increase that number to 3 ,200. So potentially a big moment for Amazon. Also potentially a big moment for Starlink. But I think it's mainly just a reminder of how far ahead Starlink is in this satellite race right now. I mentioned those 27 satellites that Amazon launched.
17:38Starlink has 7 ,200 satellites in orbit right now. It makes up 62 % of all of the active satellites that are currently orbiting the Earth. So even if Amazon were to hit that target of 3 ,200, and who knows when they'll hit it, they would still be way behind Starlink. Starlink is the undisputed leader in satellite broadband. No one comes even close. So Scott, your reactions to Amazon trying to get in the game here on how they might compete with Starlink. I think I'm more bullish on Amazon than you. And just to call balls and strikes, we had the internet go out here in London and Drew immediately scrambled the jets and we had someone, this guy came over and he went out and bought a Starlink, a portable and he hooked it up and it wasn't as good, but within four hours, we had pretty robust broadband.
18:29The product is exceptional. And I just think it's strange and almost kind of weird that we would let one man control two-thirds of low-Earth satellites, low-Earth orbit satellites. That, to me, feels almost like a security risk. Where I'm more bullish on Amazon is that I don't think Amazon needs to get to product parity. Because I think the vision here, if I were Jeff Bezos, I'd wait till I had a decent product, and then you know what I'd stitch it in with? The Kuiper offering? What? Amazon Prime. 82 % of Americans have Amazon Prime. It's arguably the most successful and largest loyalty program in history and maybe the second largest recurring revenue product in history, maybe behind Netflix or I guess Microsoft Office.
19:18Their brand is so deep in terms of trust in a consumer offering. And I think that Musk is beginning to contaminate his brands. Bezos will close the gap. They have the gap capital. To your point, I'm not sure they ever actually catch up, but they're talking about they want to have 3 ,200 satellites, but I think if they get there, say, to 80 or 90 percent of Starlink, it'll force Starlink's hand, and I think our SpaceX, and it'll have to go public for access to more cheap capital. But this is going to be a celebrity deathmatch. Also, one of the things we talk about in brand strategy is one of the keys or kind of pillars of branding is just awareness.
19:58And that is, if you think about the products you purchase, you're really unlikely to purchase a product you've never heard of, or you're much more inclined to purchase anything you hear of the brand. Oh, I would buy a Toyota. For big purchases, you just don't want to buy anything that you haven't heard of. Think about it just on a personal level, people's brands. I think it's something like 40 times more likely to respond to an email from someone you know, even if you don't know them well, you've just heard of them than someone whose name you don't recognize. So awareness is enormous. And I think Kuiper is about to become one of the fastest 0 to 60 brands in history.
20:32And that is, I would bet less than 1 % of the US population knows brand Kuiper right now. And I would bet 60 to 80 % by the end of the year know it. Because it's going to be constantly in the news, right? I mean, it ends up that maybe shooting Katy Perry into space wasn't a bad idea. It was probably a bad idea to bring her back. But maybe this technology that he's spending all this money on is for a reason, right? Other than sending his girlfriend into space. And Amazon has the capital. They have the technical expertise. I bet they're going to find a lot of people from SpaceX are willing to go to work for them.
21:07This could be to Starlink what Old Navy is to gap. 80 % of the quality for 50 % of the price. And there's a market for that. And the moment they stitch it into Amazon Prime, I think the thing gets 10, 15, 20 % of households. It made me... I've been slowly but surely burning down my U.S. equities, I've been selling Apple and a little bit of Amazon. And I'm actually now thinking about holding on to my Amazon because I think the countervailing forces here, speaking of China, two-thirds of Amazon's business is in the U.S. and I think the U.S. can be negatively impacted. But I think this is very exciting for Amazon.
21:43And I just love seeing a company that's as important as SpaceX get a competitor. I think it'll make them both better. So I'm actually really excited. Starlink, by the way, so far has projected revenue in 2025 of$12.3 billion. That's up 57%. 7.6 million subscriptions projected by the end of 2025, a 65 % increase. Again, 7.6 million. Keep in mind, Amazon, I think, has about 110 or 120 million households have Prime. Over 200 million subscribers globally. 180 million adults in the United States are Amazon Prime members. That's like most of them. basically more people have amazon prime and have a christmas tree own a gun or have kids you've honestly completely sold me on it i i'm i'm totally with you and it seems to make so much sense for amazon's business which they have a history of getting into businesses that are somewhat indispensable you know they they get into uh household products they get into groceries they buy whole foods they they get into health care uh content all these kinds of businesses where it's like something you just have to have and then they make it a recurring subscription.
22:53And it does feel like the next planet to conquer is broadband and the internet. And so I think you're probably right. Just a question of how it would actually work. What do you think the offering would actually look like? Do you think it's like a premium Amazon Prime subscription that gives you some sort of discount on a Kuiper satellite dish. Yeah, it'll be something like Amazon Prime Plus where it's like, okay, flip the switch on here, tell us when you're home, give us a window, and we're going to come install this cool, elegant, whatever it is. And overnight you have massively blinding internet speeds.
23:31And the thing that people underestimate is just how lazy consumers are. I got so excited about Jeff Bezos standing up to Donald Trump and deciding to post tariffs next to every product that I went out, no joke, or I went out, I went on Amazon and I ordered 16 Bose Ultra headphones for the team. And I thought, okay, I'm going to spend$6 ,400 on Amazon and I'm going to go on threads and Blue Sky and Virtue Signal about how great it is that Amazon is doing this. And then that motherfucker caves. And so I'm like, I'm threading. Good for him he reached down and despite all the human growth hormone he found these little little tiny little wee things called testicles and decided to put them into action good for him good on bezos if only he'd known he would have gotten the backing of scott galloway maybe he would have stuck with it literally i'm like i am literally i thread this is what leadership looks like send and all of a sudden i get a text from carol swisher he caved he caved she she saw my thread head and literally as she saw my thread she's like he caved you're wrong he caved he's he's a fucking wimp and a loser and i'm like and so i go back to amazon and i cancel my order i was just gonna say what do we get the headphones no we don't no bitch call amazon called call bezos and tell him to start acting like an american all right i'll take it up with him but the moral of the story is it is so seamless to add and take things away from amazon prime that the moment it pops up and it says, Scott, Amazon Prime Plus includes this blinding broadband.
25:10Wow. I would bet, God, I don't know. I would bet by the end of 27, you could very easily see Kuiper have more penetration than Starlink. You've certainly convinced me. I'm definitely more bullish today than I was yesterday. We'll be right back after the break with a look at big tech earnings. If you're enjoying the show so far, be sure to give the Prof G Markets feed a follow wherever you get your podcasts.
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28:03we're back with prof g markets all right let's get into big tech earnings microsoft meta apple and amazon all reported earnings last week we're recording this a day later hence why we're dressed differently so that we could react to these earnings we'll start with a look at microsoft and meta whose shares both rose pretty significantly after earnings here microsoft posted record revenue and record profits. Beat on the top and bottom lines. Shares rose 9%, which now makes Microsoft the most valuable company in the world ahead of Apple. Meta was also a beat. Beat on the top and bottom lines. Revenue rose 16%.
28:40Shares in Meta rose 6 % after hours. Really great quarters for Meta and Microsoft. Scott, your reactions to these two earnings? Well, Daddy went deep in the paint last night. I'm not used to working on Friday. I'm used to long walks with the dog and trying to get this newsletter out. As you can tell by the way I'm dressed. Yeah, my green juice. Most importantly, the door women from Children did a pop-up last night at the Broadwick Hotel, and it was pretty good. It was pretty good. I spilled drinks on all my friends, which at the time was kind of a bummer, but it's brought me real joy today just thinking about moment.
29:19I mean, literally, I went and got four drinks and not an ounce of it was not on them within about 30 seconds. Anyways, okay. So look, there's just no getting around it. All of these terms have kind of gone from, it's like good, better, best in terms of the earnings. Revenue up 13%, as you said. What was really impressive is our cloud unit revenue rose 33%. That's just incredible. And then net income up 18%. The CapEx was interesting. that you've highlighted the first thing I noticed, and that is CapEx declined for the first time. And I wonder how much of that is DeepSeek has given them a little bit of pause saying, maybe we don't need to build nuclear power plants and we're not in an arms race, that maybe there is a fork in the road here or a plan B where our AI future may not require the CapEx we'd initially thought.
30:10So it feels like they're maybe taking a pause on that. And then its stock is up 13 % because people keep saying, all right, if you're, how do I, what is the defensive play? What is the recession-proof stock? And Microsoft brings you kind of the peanut butter of a tech company with pretty decent growth with the chocolate of a defensive company, right? Because it really is, it's pretty well diversified, it's global, and it's hard to see how, other than impact on the global economy, how it would be really hurt versus an Amazon by the tariffs. I think it gets about half its revenues from overseas, whereas Amazon gets two-thirds of its revenues here.
30:51So it has both this recurring revenue stream of the largest corporate recurring revenue base in history with Microsoft Office that I think 5 ,000 of the corporate 5 ,000 companies use. And then it has the rocket fuel of a nice AI overlay. So it benefits from probably some of this insecurity because it's seen as quality in what is arguably right now a flight to quality. Your thoughts? Yeah, I think that's all right. And I think the most important number was the cloud growth. I mean, I've said this before, but I think if you're in the AI business today, that's all Wall Street really cares about.
31:28You can beat on overall revenue, which they did. You can beat on overall profits, which they did. But the thing that Wall Street really wants to see is, are you outperforming in terms of their expectations for cloud growth, or in other words, AI growth? And that is what they proved here. Microsoft Azure, which is their cloud unit, and we should just call it their AI unit, that's where they're selling compute to AI companies, that revenue rose 33%. And Wall Street's expectations for that business was 29%. Also, the guidance for that unit for Microsoft Azure, they expect the number in this current quarter, so in the next report earnings, they expect growth to be 35%, so even higher.
32:12And that also beat expectations. So that's the number that Wall Street really cares about. The opposite effect happened with Amazon, which we'll get to in a second. But yes, the CapEx that you mentioned, that also jumped out to me. $21.4 billion, that's a lot. But it is a decline from the previous quarter. And it's the first CapEx decline for Microsoft in more than two years. You pointed out that maybe this is a response to DeepSeek. I think that's definitely a possibility. I was wondering if maybe it's a response to just the tariff environment. I mean, we're just living in a more uncertain economic environment right now.
32:51And I wonder if because of that, they were thinking we're going to go all in on AI beforehand. And now they're beginning to pare back some of those ambitions, start to play things a little bit safer. CapEx is still going to grow, but it's just not going to grow as fast as they said it would last year. So I wonder if that's, it could be deep seek. I wonder if it could be a tariff response too. What's interesting about Meta, moving on to Meta here, Meta had the opposite. They are actually accelerating their CapEx investment. They raised CapEx guidance from what was previously a high end of$65 billion to now$72 billion.
33:27So Microsoft, meanwhile, is playing it safe. Meta appears to be actually leaning into the uncertainty. The number that really jumped out to me was 3.43 billion. That's the number of users who use a Meta app every single day. That's the daily active user number. It's up 6 % year over year, which means that more than 40 % of the entire world population is getting on a Meta app, whether it's Instagram or Facebook or WhatsApp. They're using it every single day. I find the most interesting application of AI from a shareholder standpoint is actually pretty boring. And that is it's Meta's ability to increase the targeting of their products.
34:11So they are not only increasing their revenue, I think their revenue or the way they monetize their traffic has gone up, their CPMs have gone up, or they're able to charge more. But not only that, their AI, which feeds into their recommendation engine or the recommendation systems, contributed to a 35 % increase in time spent on threads, 7 % increase in time spent on Facebook. That's amazing. That's like getting younger people to watch MSNBC, right? If you can get more people to spend more time on Facebook, that's not easy at this point. 6 % increase in Instagram. And then if you think about, you know, one of the predictions we have for this year was that Meta was going to be the AI company at 25 because they're the second largest purchaser of GPUs from NVIDIA.
35:00And I personally, I don't know if you've noticed this, I have found that Instagram Reels is increasingly taking time from TikTok for me. And I noticed a tangible difference in the quality of the algorithm, of TikTok's algorithm to serve me content that was relevant. And it feels to me like Instagram Reels has somewhat closed that gap. And I think that's leveraging AI and all this back and forth and nonsense between Trump and China over banning TikTok, not banning it, and the fact that Meta has such a built-in user base already. I think it's – I think there's – quite frankly, I think they're actually starting to pull back or claw back some of that share from TikTok.
35:45Let's move on to Apple and Amazon. So Apple, they had better than expected sales, up 5 % overall. They missed their sales estimates in China, falling more than 2%. They also warned about tariffs. They said tariffs will add$900 million to its costs this quarter. Shares fell 4 % in after hours. And then we also saw earnings from Amazon, which was also a beat, same as Apple. But they gave guidance that Wall Street considered cautious. And they also missed slightly on their AWS growth. And shares in Amazon fell more than 3%. So both companies actually, when you just look at the earnings compared to expectations, pretty solid quarters at face value.
36:30But there were just some signs of weakness in there that Wall Street didn't like, and both stocks fell. Your reaction? I thought Apple had the least impressive earnings of the bunch, although I was surprised that they – I think last quarter their revenue was basically flat year-on-year, which is weird for a company or unacceptable for a company trading at a price earnings multiple of 34. And even 5 % isn't sort of tech. It's no longer really considered a growth company. And I think, was it Catherine Rampell or I forget who was on the pod and summarized it perfectly. Or maybe it was Kyla Scanlon who said that Apple is a mature company trading as if it's a growth company.
37:10I think that was me. That was you? What is it about you that reminds me of thoughtful women in economics? Anyways, Edwina. The services revenue was the highlight. It grew 12 % to$27 billion, even though that has slowed down. It's a slow since 2023. It's still double-digit growth. Wearables fell 5%, missing estimates. So that's kind of – that's not good. The other thing that kind of shows an unusual operational misstep, I was really excited about Apple Intelligence. I thought that if anyone could sort of consumerize other people's massive capex around AI, I thought it was going to be Apple, that they would just organize my photos and come up with sort of very useful ways to speak to my AirPods and say, oh, we're out.
38:04It's loud. I'm taking the volume down. They do that a little bit, but I would have thought there would be a bunch of cool things, little features that they would be able to leverage. Totally dropped the poll on that. And they've branded it brilliantly. They call it Apple Intelligence, the AI features, but they've been delayed again. And it's unusual. Apple usually kind of under-promises and over-delivers. So they don't appear to have the same depth of human capital around AI as some of the other guys. I still feel that I still own some Apple. I've been selling it down. I think it's overvalued at a PE of, you know, its net income growth in 2024, negative 3 % versus Microsoft up 21, Alphabet up 36, Amazon up 95, Meta up 65, and NVIDIA up 145%.
38:53And yet Apple trades at the same PE multiple as Microsoft at 33, more than Amazon, it's at 31, and Alphabet's at 18. I mean, if you just look at these things from a pure valuation bottoms-up standpoint, it looks like Alphabet's the least expensive, and it looks like Apple is the most expensive. Yeah, absolutely. And that was just another red flag in terms of this idea that Apple is this mature company that's trading as if it were a growth company. They announced another buyback program,$100 billion in buybacks. they also boosted the dividend by 4%. If you're trading at 30 to 33 times earnings, you're trading as a growth company, which means that the market should be expecting that you're investing in growth.
39:37You're investing in new products. You're investing in new services. Instead, they're just using all of this capital and all this cash to just repurchase shares. And as Aswath de Motoren says, I mean, this is sort of the bread and butter of the corporate life cycle. that's what you do when you're in the mature stage. That's what you do when you're a middle-aged company and you're on the way out. You start buying back shares. So, I mean, I was a little surprised by how the stock pulled back because I thought overall the earnings compared to expectations were pretty solid. But I wonder if people are starting to realize that actually the multiple here doesn't really make sense.
40:18This is not the growth company that we thought Apple was 10, 15 years ago when it was on the cutting edge of technology and innovation. Because what we're seeing here is that, I mean, every time I see a buyback, I'm like, oh, you're running out of ideas. Understood. You're being sensible about it, but you are running out of ideas. And that's sort of the vibe I get from Apple right now. And I wonder if Wall Street's getting the same message. I think Apple is ground zero for what I call the great reversal of flows in the rivers. And that's what I'm writing about in today's No Mercy, No Malice. And that is, I think Apple could increase its earnings by 20 or 30 % over the next five years.
40:56And I think the stock's still going to go down because trading at that multiple, I just don't think it can outrun the multiple contraction that it's about to experience. I bought Apple in 2000, I think in 10 or 11, and I bought it. It was growing much faster. I think it was still growing high single or low double digits. And I think I bought it at a PE of 10. So the company could continue to perform. And I still think the stock is going to struggle because I just think that it's the most, I think it's the most widely held stock in the world. It kind of identifies or marks American tech. And I think as these rivers of capital begin to reverse flow, there's just no way that won't come out of what is the most valuable, iconic company in America when people look at it and say, great company, we love it.
41:40But if it's really, if it's growing low single digits, does that really connote a growth-like valuation. Yeah, I agree. It's also quite telling that the day that the company, the day that a company announced a$100 billion share buyback program was the same day that that same company was ousted as the most valuable company in the world. Like, that's just not a good, you would not expect those two things to be true at the same time, but they were last week. Let's just quickly go to Amazon. They also beat on the top and bottom lines. Pretty strong quarter, actually. The ad business was a big beat.
42:16Ad sales grew 19%. But the stock fell almost 4%. And why did that happen? As I mentioned earlier, what Wall Street cares about is AI and AWS, which we could also just say is their AI unit, their cloud unit, their compute unit. That actually slightly missed on revenue expectations. Still, it grew 17%. Pretty good. $29.3 billion, but Wall Street wanted more. They wanted 29.4. And if you're in the AI business, it's the dynamic we've discussed. Beating expectations here means you need to blow expectations out of the water. Even a slight miss on that one business unit, that's a big problem for Wall Street, which is why I think the stock fell so significantly.
43:03Any thoughts on Amazon, Scott? Well, Amazon is the most vulnerable, probably the magnificent seven to tariffs. One, two thirds of businesses in the US versus most of big techs is somewhere between half and one third. Medica only gets a third of their business domestically. And obviously they import a lot of products that will have tariffs on them. In addition, as goes AWS goes Amazon. I mean, Amazon is essentially a cloud provider now with a retail unit. And when you don't beat expectations on what is considered the white meat of your business, that your stock's going to get hit. Also, and this is a prediction, and as everyone who listens to this podcast know, I am rotating out of U.S.
43:42stocks and my Amazon position into European and Asian holdings. And I'm about to sell down some Amazon and put it in Alibaba because I think what you're going to see over the next year is that Alibaba's cloud unit will get an unnatural surge from European purchasers who are fed up with always defaulting to American companies for their cloud and infrastructure needs. And I think a year ago, if you'd showed up to the CEO of Mercedes or LVMH as the CEO, as Joe Tsai would probably, or the head of the cloud unit for Alibaba and said, we'd like to handle your data like china no fucking way now i don't think they're seen as much more mendacious as the u.s so i think alibaba's cloud unit is going to get more meetings across europe and latin america than they would have before this nonsense uh from the u.s yeah and plus if you got china investing heavily in ai if china's made it their mission of ai self-sufficiency um that's certainly going to be a a win for alibaba if they can just start selling more compute to Chinese companies.
44:49Just one clarification before we finish up here on this story. I just want to clarify, this quarter, it was very strong. And I've seen people, probably not very smart people, but people saying like, oh, things are going well. Look, look at the tech earnings. Maybe things aren't all so bad when it comes to tariffs. I just want to clarify, this is the quarter ending March 31st. So this doesn't, none of these earnings reflect anything about the tariffs. The only thing that they might reflect, which is what I was kind of looking for, and which we sort of covered when we discussed the GDP report, is it could reflect this pull forward dynamic, which is this effect where, you know, consumers know that tariffs are coming, they know that prices are about to go way up, and so maybe they're actually rushing to buy in big numbers in this quarter, in this previous quarter that was just reported.
45:49And so I was interested to see, especially with Apple, for example, where we saw all these headlines of how iPhone prices are going to go way, way up. We would have seen that reflected in this previously reported quarter. We would have seen, if that was really what was happening, people are sort of panic buying an iPhone, or if you want to upgrade your iPhone, you do it right before tariffs happen. That's what we would have seen in this quarter. And actually CNBC asked Tim Cook about this specifically. They said, you know, is this pull forward? Are you seeing pull forward in the earnings? And he said that he saw, quote, no evidence of pull forward.
46:29And I just, I don't know, I wonder about that. I wonder, one, what would evidence actually look like? How would you know that that was what was happening? and two, if we're seeing signs of pull forward everywhere else in the car industry, in the clothing industry, even in those GDP numbers where you saw this massive influx of imports, you know, why wouldn't we see it with the iPhone? And why wouldn't we see it with all the rest of these tech earnings? So on that aspect, I'm a little bit hesitant or just suspicious of how strong these earnings were across the board. And I do wonder if the dynamic that we're seeing is everyone rushing in to buy right before prices go way up with the tariffs.
47:16And it'll be interesting to see in the next quarter. That's when we're going to see the real tariff effect. It'll be interesting to see if we see a drop-off in demand there. It's really insightful. It's sort of the AR-15 effect that whenever a Democrat would get elected, people go out and buy more guns for fear that gun legislation is actually going to get some traction. But Apple really doesn't have anything that interesting right now or new or fresh, so to speak. And that's really, I would have guessed that they would have been flat. And I think you're absolutely right that there was probably some pull forward.
47:47And also there is no way that Tim Cook would acknowledge that because what that's saying is, oh, it's not our products. It's not our marketing. It's not the quality of our offering. It's an unnatural sugar high that's going to suppress product sales in the following quarters because a lot of people have pre-purchased things that we're going to purchase the next subsequent quarter. So I think that's really interesting. I hadn't thought about that, and I think you're absolutely right. We'll be right back with a look at what's happening to student debt. If you're enjoying the show so far, hit follow and leave us a review on the ProfitU Markets fee.
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51:10We're back with Profit G Markets. For the first time in five years, the Department of Education is restarting forced collections on borrowers who have defaulted on their federal student loans. The move affects 5.3 million people who were in default before the pandemic and could put millions more at risk. Although federal loan payments resumed in October 2023, forced collections had remained paused until now. Borrowers who have fallen behind are already seeing their credit scores drop, and the White House has warned that it can and will seize wages, tax refunds, and even pensions to recover unpaid debts.
51:48So, Scott, I just want to clarify what's really happening here and where things stand. And just a reminder, Trump paused these student loan payments when COVID hit. And so if you had student loans at that time, you weren't getting billed. Now, that was supposed to expire in Biden's term. But then Biden decided to extend this student loan freeze. He actually tried to go even further, tried to cancel$340 billion worth of student debt, but it was struck down by the Supreme Court. So he ended up only partially forgiving these student loans. And then these payments resumed in 2023. But what didn't resume and what will resume today is this forced collection of student loans.
52:29This is where the government comes in and they just start taking the money if you are in default. And what does being in default actually mean here? It means that you have missed your payments for 270 days or more. So for people in that position, if you haven't made your payment in 270 days, those are the people from whom the government is now going to start collecting these payments. So Scott, your reactions to this news and what it might mean for our economy. There's a lot of moral hazard here. And that is my understanding is most student debt, most people with student debt haven't made a payment in five years.
53:05And keep in mind that people who have student debt are the most fortunate third of Americans who got to go to college. And also debt is, it sucks to be a grownup, but if you take out debt, you're supposed to pay it back. And also, there's a bit of a mythology here or semantics or incorrect nomenclature, and that is payments have been stalled. Payments have been made, but they're being made by all taxpayers because someone is owed this money and someone needs to collect interest on it. And so it's the U.S. government or U.S. taxpayers, all of us, who are registering now the financial imposition of these student loans not being paid back.
53:44And I think it sucks to be a grownup. I think you take out this debt, you got to pay it back the same way if you took out an auto loan or a mortgage and you weren't paying it, they'd come for you or they'd come for the asset. And in this case, they can't repossess your degree. The real issue is that the cost of higher education is just too high and it's just gone up much faster than inflation. That's the culprit. So then the question is, well, how does it come down? And one of the reasons it continues to accelerate faster than inflation, similar to any other bubble, is because of cheap credit.
54:12and that is you go into a university and there's a nice lady in a pantsuit with a big college logo over her head saying, always invest in yourself, you're gonna be fine. And then you get a degree from a Joey Bag of Donuts University that is part of the cartel where we all raise our prices exactly the same amount. And then you get out and find out you can't get a job and end up as a barista and you have$150 ,000 in student debt. And the issuing university of that debt or the sponsoring university is not on the hook for any of that debt. Whereas Toyota does some diligence. Toyota says, okay, if there's no way this person can pay back the money, we're not going to loan them the money.
54:46Because if we have to repossess the Toyota, it's going to cost us money. We're not going to be able to resell it for as much. Whereas the incentive for any university with government-backed student loans and accreditation, and by the way, the people accrediting these universities are the incumbents, is just to encourage people to take out more and more student loans, regardless of the credit risk. And until consumers start shopping around or holding their university accountable and saying, this fucking sucks. I brought a lot of money and I can't pay it back and it's your fault. There's no pressure on these universities to lower their tuition and they still have access to cheap credit.
55:24The real solution here would probably be to put these universities on the hook for a portion of that bad student debt, such that they would say, okay, we have found that 40 % of people with philosophy majors have a difficult time paying back their student debt. So if you are a philosophy major, we're going to limit the amount of student debt you have to X. And because they want to have as much cheap free capital, they won't be able to raise tuition as fast as they have. So I'm really mixed here because I feel for younger people who I think have gotten a raw deal on so many levels. I like the idea of programs where some sort of working in industries where you don't – that traditionally aren't that high paying, whether it's education or practicing medicine in rural areas or national service.
56:09You should have your student loans, debt repayment, delayed, lower interest, whatever, forgiven. But the idea of a generation of people just believing that debt doesn't really count for them, I don't think that ends up anywhere good either. But net-net, we've got to go after the problem here, and the problem is skyrocketing higher education costs. Yeah, but I think that highlights a big problem, which is that for all these people going into college and taking on this debt, the trouble is that a lot of these young people don't really understand what the debt is because no one's fully explained it to them.
56:45I mean, just some statistics here. One in five student loan borrowers say they borrowed more than they needed just because it was offered. One in five also say they don't even know their current loan balance. And then you throw into the mix the fact that the president, the previous president, said, don't worry, it'll all be forgiven. And then suddenly we have a turnaround. It's not going to be forgiven. And actually, it's business as usual starting today, starting May 5th. And I think Trump criticized Biden actually correctly here and said he sort of made you a false promise that he couldn't make good on.
57:22And that is what happened. He made a false promise. The Supreme Court struck it down. And what I worry about is that there is now a generation, my generation, who believes that maybe it'll be canceled in the future. Maybe something will happen. Maybe this is actually on the table. And so the consequences of that are going to be really bad, because I think there are going to be a lot of people who say, you know what, I'm just not going to pay it, because who knows, maybe in a few years Congress will vote on this, and I won't have to pay the debt. And what is that going to do? That's going to absolutely obliterate my generation's credit scores.
58:01I mean, we can talk about the forced collections and what that'll do to people, but to me, the big downside is what it's going to do to credit ratings. And Liberty Street did this analysis. They found that each time you miss a student loan payment, every delinquency on your student loan debt, your credit score drops by around 150 points. And I think this is the real concern for young people and the part that they don't take seriously. And I just want to paint a picture of what a bad credit score can do to you in case people don't really realize. I mean, for starters, you pay higher interest rates.
58:39Two, it can affect your employment. I mean, a lot of employers actually check your credit. And if you have bad credit... I was just going to say that. Yeah, it can cost you a job. It affects your ability to rent. I mean, landlords check your credit. If you have a low score, you pay higher security deposits. In many cases, you're flat out rejected from getting that apartment or that home. And then four, and this is probably like the worst of it, is it just completely hamstrings your ability to access credit. I mean, you can get rejected for mortgages, you can get rejected for auto loans, you can even get rejected to have a basic credit card.
59:17It just completely cripples your financial freedom and with long, long-term consequences that aren't necessarily your fault. And I just worry that these young people don't understand that or they don't take it that seriously. and they're going to sort of hedge their bets on this very unlikely scenario where it's all just forgiven overnight. I don't think that's going to happen. You need to pay these loans. You can't just go into delinquency. You can't go into default. It's going to completely ruin you for a long time. I know someone who got a job at a prestigious bulge bracket investment bank and literally showed up the first day and they said, we need to speak to him.
59:58So we have to rescind the offer. or we did a credit check and you have terrible credit. And we can't have you selling or structuring securities when you have a low credit score. Also, if you really want evidence that we are fucking your generation, one of the only forms of debt that's not dischargeable in bankruptcy is student loan debt. So if I declare bankruptcy, I can get out of almost every piece of debt. Now, granted, I have to give up all my assets. Actually, that's not true. If I own a home in Florida, I can homestead it and I get to hold onto my home, even if I declare bankruptcy and clear out all my debts, but except for student debt.
1:00:32So if you think about the one person who if they hit hard times, deserves kind of a do-over button, it should be young people in student debt. It's a very upsetting situation, but, and also I think it calls up the need for what I call in high school, adulting classes. Yes. I think that there should be a class, it's just like basics, like what does the interest rate on my credit card mean? Right? Yep. Basic adulting. what is required to get an apartment? When you want to rent an apartment, what do you need to do and possess and have? And what's a general ratio for how much you should be spending?
1:01:07We need to make sure that young people understand the rules. We need to make sure that young people understand what debt is, what they're signing up for by taking on debt. And then the other thing I think that this brings up, which we need to have young people to really think about is like, what is actually the value of a college education? Like, is it really worth it for you? And for many people, for different people, there's going to be a different answer. I mean, we know it leads to higher earnings. We've seen the data on higher marriage rates, better health outcomes. You know, so, you know, we know some of the data.
1:01:44But I wonder if we need to sort of change the conversation to, instead of, is college worth it? We need to be more specific and say, is college worth it if you're taking on debt? If you're not taking on debt, If your parents are paying for it, it's an absolute no-brainer because you're essentially going for free. Of course, you should go to college. But if you're levering up to go, I think that's a completely different question. And there's this one stat that our team found, which I find very illustrative here, which is that for college grads who took on student debt, one third of them say that college is not worth the cost.
1:02:20For college grads who didn't, that number is 16%. So there's a massive gap in the ROI on college, depending on whether you are taking on debt for it, which of course makes sense. If you're getting the product for free, there's only upside. But if you're putting yourself in a hole, it's a totally different thing. So I guess, one, we should reframe the question, and two, I will pose it to you. Is college worth it if you're going to take on significant student debt? There's no yes or no answer there. It's a function of nuance. That is one. A lot of it comes down to the university you get into. If you get into MIT and you are cut out and feel like you can get through four years at MIT, I don't care if you have to borrow a quarter of a million dollars.
1:03:07It's worth it. For the rest of your life, you're taken seriously. For the rest of your life, people have an inclination to hire you. And the scary thing and the thing that's good in some ways and bad in others is your school, Princeton, if you have any economic hardship, they have so much money, they'll give you financial aid. So what happens is really good kids, because of this bullshit rejectionist exclusivity LVMH strategy that every elite university has adopted such that they can raise tuition faster than inflation and the faculty and the alumni feel good about this luxury brand they have and it makes the value of the degree go up because it's harder and harder to get them.
1:03:42We've been able to raise tuition faster than inflation. The alumni love it. They give us a bunch of money and anyone who gets in who needs economic help gets it. So, but the problem is, is a lot of kids don't get into an elite school and they get arbed down to a second tier school. So my strategy with these kids is always, I need you to get into more than one school. And once you get into the school, the university, all of a sudden it goes from they're a seller to a buyer in the sense that they really want you once you get in, because they have something called yield. And their ranking is largely determined by a variety of factors, including what percentage of people who are admitted actually end up going.
1:04:19So ideally what you want to do is to get admitted to more than one university and ideally competitive universities. So for example, if you get, and I don't know if that's the way any longer, but it used to be, if you got admitted to both Duke and UVA and UVA saw you got into Duke, UVA would give you a full ride if you went to UVA because they were direct competitors with Duke. So the key is you need to be a consumer. You need to get into more than one university and then start calling them and saying, you know, finances are a struggle for me. What do you offer in terms of financial aid? I'm into several universities, including your closest competitor, this university.
1:04:52What can you offer me? But students don't take a consumer. They're much more likely to negotiate on a hotel room or shop every store in the world. But once they get into the university, they kind of sit back and just take their price takers. They shouldn't be. But this is the thing that's so tough. It's their kids. I mean, you're describing this and And you're describing the habits of a very sophisticated and experienced negotiator who knows exactly what's at stake, knows all the dynamics at play, knows exactly what to say and what the leverage is, which is actually, I mean, most grown adults don't understand that.
1:05:30I barely understand that. It's actually a very hard thing to do. And I think it's very important what you're saying, and I hope there are young people applying to college who could hear this. But I think what's so unfair and so upsetting is like we're telling children to do this. Children who have no experience or have no understanding of what any of this means, who don't even really understand what interest rates are or what a loan is. And that, to me, is what's so upsetting. The standards that we are holding them to, to evaluate these actually quite complex and nuanced economic issues, are just unbelievably high.
1:06:07And we don't seem to hold regular, functioning adults to those same standards. And to me, it's just so unfair. Ed, everything we do in our society is a subtle transfer of wealth and opportunity from the young to the old. And we used to love young people. We used to love more than that. When I was your age, we used to love unremarkable young people, right? I mean, think about it. I got Pell Grants. I had access to a world-class university that had a 74 % admissions rate. And once I got there, my tuition every year was$1 ,300. And I could work my ass off over the summer and have part-time jobs and show up the next year, despite the fact I wasn't getting any financial assistance from my parents.
1:06:46And that, for me, started an upward spiral of prosperity where I got to engage in the economy, I got to find a mate, I got to have children, I got to build a business, and all of that reverse engineers to America used to love young, unremarkable people. And now it no longer does. Now it feels America is about trying to identify the children of rich kids and a freakishly remarkable one percenters and try and turn them into billionaires. And higher ed is the tip of that spear in terms of losing the script. We've become hedge funds that offer classes at the elite side and the mid-tier are basically terrible value for kids that puts a lot of them into debt that they can't discharge and starts them with this anchor around their neck.
1:07:30And what a shocker, we have the most obese, anxious, and depressed generation in history. So that question around whether college is worth it, it's a nuanced conversation. What is an easy question to answer is are we fucking young people? That's an easy one, 100%. Let's take a look at the week ahead. We'll see earnings from Palantir, AMD, Novo Nordisk, Uber, Disney, and Shopify. And the Federal Reserve will also meet and announce its next interest rate decision. Scott, any predictions for us. Well, I made it. I think by the end of 27, Kuiper is, it'll be hard to suss out because it'll be in a larger Amazon umbrella, but that Kuiper will be worth more than Starlink and will have greater penetration in the United States as it'll be stitched into the Amazon Prime++ program.
1:08:18They should change the name first. Kuiper is not a very good name. It kind of sounds like the AI villain in a Bond film, Kuiper. What does Kuiper say? Yeah, change that. And then I think the prediction comes true.
1:08:58Lifetimes
1:09:04You held me In kind reunion
1:09:15As the world turns And the dark flies
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Scott and Ed discuss the latest U.S. GDP report, new data on China’s factory activity, and the launch of Amazon’s new internet satellites. Then they turn to Big Tech earnings, breaking down first quarter results from Apple, Amazon, Microsoft, and Meta. Finally, they examine the Trump administration’s decision to resume forced collections on defaulted student loans, discussing the broader implications and potential solutions for addressing student debt.
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