Is AI CapEx Out of Control? + Bill Ackman’s IPO Failure | Prof G Markets

This week on Prof G Markets, Scott and Ed open the show by discussing the latest Fed meeting, Starbucks’ disappointing earnings, and Delta’s CrowdStrike problem. Then Scott shares his thoughts on Microsoft and Meta’s earnings and breaks down why capital expenditures have become so outrageous. Scott and Ed also discuss why Bill Ackman struggled to attract funds for his IPO, and what that says about a chronically online group of people.

Note: For our analysis on Friday’s selloff, tune in to Prof G Markets on Thursday for our discussion with Mark Mahaney, Evercore’s Senior Managing Director and head of internet research.

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Timestamps:
00:00 - Today's number
00:26 - Today's episode
04:19 - Market Vitals/Headlines
17:48 - Is AI CapEx Out of Control?
28:42 - Bill Ackman’s IPO Failure
40:40 - Week Ahead
40:49 - Prediction

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Headlines:
Fed Clears Path for September Interest Rate Cut

Starbucks revenue misses estimates as same-store sales decline for second straight quarter

Delta Sees $500 Million Hit From Catastrophic System Outage

#business #news #tech #finance #stockmarket #profg #scottgalloway #profgmarkets #ai #earnings #stocks #investmentstrategies #investment #investing #fed #fedmeeting #starbucks #delta #crowdstrike #meta #microsoft #billackman

[duskrider]

Bring Lina Khan on the show and call out Reid Hoffman for trying to get her fired.

[ashergreening]

the sp 500 has been unburdened by what has been since this episode was filmed

[izzyparis]

People are feeling financially squeezed. I understand that on a relative basis that the US economy is doing much than most global economies. Buti inflation had been quite low for some time, people became used to it, we all did. Then inflation increased for several years so people experienced the compound effect in the painful direction. Home ownership costs increased - property taxes increased, homeowners insurance increased (along with car insurance), cost of goods and services also increased. So, it depends on your perspective. If zoom out and look at the world, then yes, things could be so much worse. But if zoom in, then people are feeling the effects of higher costs and honestly most wage growth not keeping up with the higher costs (unless in tech or other hot industry of the moment). Both can be true and both should be acknowledged and discussed and not neither should be dismissed. Both are relevant.

[ryanmullaney]

OMG!!! THE REASON PEOPLE ARE DOWN ABOUT THE ECONOMY IS BECAUSE WAGES HAVE NOT KEPT PACE WITH FOOD, HOUSING, HEALTHCARE, INSURANCE AND GAS. How many times, and how loud does the working class have to say it? The economy is only good if you hold a lot of assets in the form of real estate and stock which is only about 35 million people in a country of 350 million.

[alexanderdelancker]

Great episode. Just a quick note: It's not just Meta taking little ownership of its ads and the moral compass of what they show to users. Alphabet bombards people our age with "get rich fast" ads with schemes that involve BTC/ETH "arbitrage". They collect those checks very happily. They don't mind that those ads are essentially scams. Or that these ads are falsely classified (e.g. as music videos) so that you cannot block the advertiser nor their category from seeing future ads.

[yushpeaceandlove]

Starbucks issue is the product. It's boiling burnt coffee. I make way better coffee at home.

[ivantuma]

_Somewhere in a highrise office in Manhattan_
Chief Accountant: "Sir, the minimum wage is going up by 10%!!"
CPO: "Raise prices by 20%, _and blame labor_ "

[naihanli]

The local Chinese brand is 1/3 of the price and their coffee even tastes better.

[cobraspottedwolf]

I haven't been to a Starbucks for months

[jonrussell]

If we are in such a great economy Prof G, show us consumer debt numbers.

The party music is about to stop.

[andrewzacks]

How does Scott know how Delta is doing if he is flying private? Very funny moment in this post.

[itskrissart]

my hand naturally pressing like button on this video the moment you guys mentioned start wars lol

[damianochoa]

Love your show, but completely disagree with you politcally. Regardless, keep up the good work!

[thetasem]

This was great entertainment. Kudos to the team who puts this together. You’ve perfected your format.

[regbhyyu]

Same song and dance with Meta. Zuck gets dragged into senate, forced to apologize and does it turn into anything more? No. He just laughs it off

[racingtogreen]

Can't leave crowdstrike if you have cut labor costs to the point where most of the people you retained are about to leave, and haven't spent enough on modern infrastructure and efficient CI/CD. Airlines spent 96% of their free cash flow on on share buybacks over the last decade, not including the years they were prohibited from doing so during the pandemic.

[rapauli]

You tiptoe closer to the biggest ethical rationalization: that carbon fuels are such a big investment that we all pretend it is not going to kill us with pollution. Here is where profit exuberance does the greatest damage - it is more than perfect - better than selling food - as soon as carbon combustts, it has to be replaced. More demand than food is fossil fuel, and the ethical release is global. You could have a great conversation with Nate Hagens

[tommyhoward]

Chronically online Ackman is hilarious

[mmm-cake]

16:53 Ed has jokes ☠️☠️ awesome lol I’m still laughing

[Minihawaiian]

What perfect analogy! You are where you spend your time… I must be …Prof G podcast… 😂 Thank you all for another great one!