sh*t... the next 24 hours

So this morning is the morning after

some really incredible earnings from

Microsoft and Meta. Are they though?

Well, we'll talk about what a potential

change factor could be inside of

Microsoft and Meta. But importantly as

well, we've got to talk about workforce

changes and well jobs because that's

what JPAW tried giving us a hint about

yesterday. and I'm a little confused as

to exactly what to take away from it,

but I have my bias, which we'll talk

about in this video. We'll also go

through some of the notes from what was

said in Microsoft and Meta's earnings

call, which could be quite applicable to

what's going on here. So, first,

remember yesterday, Jerome Powell gave

us a hawkish warning. He hawkked at us.

They told us things are good in the

economy right now and to pay attention

to the top line of the unemployment

report which comes out tomorrow. Quite

an interesting hint because often Powell

can get a little early heads up on what

the data is going to be. And despite the

market pre-pricing in the odds of a Fed

rate cut in September to the tune of

nearly 70% by the time Powell was

speaking after he spoke the odds

plummeted. That's because he refused to

set up for a rate cut in September and

instead suggested we might be higher for

a lot longer. In fact, some would even

argue that he somewhat suggested we

might not see rate cuts until next year.

Maybe Powell will never be interested in

cutting rates and he'll leave his job in

8 months and somebody else will take the

reigns of cutting rates. Part of this

could be because of inflation rates

trending up at least in core goods. Here

you could see for example the Federal

Reserve Bank of Cleveland now casting

that core CPI is coming in at three uh

at about 3% for July. Now, we did get

PCE data, but even PCE data this morning

that came out, which is really just sort

of a recombination of CPI uh and uh PPI

data, we did see that uh goods pricing

is increasing. If we grab a little arrow

here, we can see this black line and we

can see goods pricing has actually been

in deflation in 2023 and 2024. You're

under that 0% line. So you've been in

deflation in goods pricing which is kind

of what you saw during COVID you know

sort of during the shutdown not a

surprise deflation. Of course we had

massive inflation following stimulus

checks and bailouts and PPP loans and

and all the goodies. Uh that said goods

pricing has really been a source of

disinflation and deflation recently. But

following tariff announcements, we're

starting to see this very very clear

uptrend on goods pricing. Now,

fortunately, uh core uh sort of housing

and core services excluding goods and

excluding housing, both of these are

rotating down and they're contributing

to lower inflation, which is fantastic.

We're on a nice downtrend for housing

services inflation. We're in a downtrend

for core services exhousing, which is

great. But this is really one big reason

for the Federal Reserve not to cut

rates. And JP Pal told us, hey, look,

it's it's going to be potentially many

months before we have as much data as we

need. But his warning on this

unemployment rate and the headline was

very unique. It's something we haven't

seen before. But given that he paired it

with hawkishness, it somewhat suggests

that we should expect a beat on the

unemployment report tomorrow. And maybe

we end up seeing the unemployment rate

come down from 4.1%

potentially to 3.9%. Which is not what

the market is expecting right now. The

market is expecting the unemployment

rate to go up from 4.1 to 4.2%.

Which would have suggested that if

Powell knew he would be doubbish. So, it

seems to me that either Powell doesn't

know and he's like, "We're just not

going to give you an answer. We're going

to wait and see." Or he knows and it's

going to come in hot. Tomorrow's jobs

report is expected to show 105,000 jobs.

Uh we are expecting that unemployment

rate to go to 4.2% which would be a tick

up uh from the prior of a 4.1% rate.

Now, we'll see. We'll know at 5:30 in

the morning we'll be covering it and

tomorrow will be a really big day

because if we do end up getting a strong

jobs report honestly the stock market

should do exceptionally well. This

morning we've actually seen some

institutional bleed on Microsoft which

was really surprising given just the

amount of money that's being spent uh on

artificial intelligence uh

infrastructure at both Meta and

Microsoft. We'll touch on those briefly

in just a moment to give you some things

to pay attention to. Uh but what's

remarkable when you look at these

companies and I look at my notes from

the earnings calls when I went through

these what you ended up finding was that

headcount at Microsoft flat headcount at

Meta year-over-year down 1%. Now, this

is very interesting because you have

companies that are promoting the

benefits of artificial intelligence and

that very promotion is leading to

potentially less hiring, which then we

look at the challenger job cuts report

that came out this morning. And we look

at the challenger report, we see that

job cuts are up 140% from the same month

last year and up 29% from the same sort

of pacing that we've had uh last year

for the first 6 months. So we're well

above average job cuts. And initially we

think, okay, well that's probably

because of Doge and government because

that's what we saw early in the year,

which is true. But that's actually not

where we saw most of the job cuts now.

where we saw most of the jobs cuts in

July were not in government with only

3,800 job cuts announced uh in June and

3,666 announced in July. We actually saw

a 36% increase uh in the uh job cuts

announced in the technology sector which

is leading the private sector in job

cuts with 89,000 uh job cuts announced

in 2025

uh in July. retail also with a weaker

consumer and nonprofits with a massive

increase due to less government funding.

Uh and then automakers of course high

interest rates, very difficult time to

sell cars.

So you have this sort of disaster where

you've got a multiple problems I like to

say going on and some of them are

actually some of these problems quote

unquote problems are actually fantastic

for stocks but but think for a moment of

the things that we face. So what we have

is core inflation rising. This means no

rate cuts, right? Then we have at the

moment, yes, cracks in labor, but you

know, Powell's hawkishness

suggests not enough to to be

recessionary yet, right? In other words,

like not enough pain in the job market

to really send us into a recessionary

and deflationary environment because

frankly,

you know, people always worry about the

balance between inflation and labor

because Jerome Powell says we have a

dual mandate. One is inflation, one is

labor. What happens if we end up getting

high inflation and a labor market that's

falling? And the reality is we don't. If

the labor market falls, we will have

deflation. If labor falls,

uh we will have uh deflation

uh and a recession and cuts.

Okay? And cuts. That's if the labor

market falls. This if Powell had a heads

up on this, if Powell had heads up, uh

he should have set up a 50 basis point

cut for September. like if he saw a

really weak set of jobs data coming up

this Friday. Again, maybe he doesn't

know and he's going to be just as

surprised, but I just have have this

weird feeling that he kind of knows this

is going to be a hot report. Again,

maybe he doesn't. I just have that

feeling. Then what you'll probably end

up seeing is uh labor stays strong,

stocks can keep going up versus that

institutional selling that you saw. uh

bonds sell off, yields jump

uh and markets

unpric any cuts in 2025.

That's possible because then what

happens is all we do if the labor market

is fine, we're only going to focus on

inflation. See, that's something to

remember. If inflation bad, you keep

rates high. If labor bad, both of them

are going to go down together. Like the

labor market will drag inflation down.

So the inflation problem gets cured

through a recession.

But you don't cure inflation through a

strong labor market. You have to cure it

through high rates. So you really only

have two paths here. Two simple paths.

Okay. Path one, big layoffs. Uh

inflation goes away. uh cut rates and

then path two is no big layoffs uh fight

inflation with higher for longer. So

that's where we sit and JPAL really

hinted at this. This was the JPAL hint

right here.

Now what do we need to know about the AI

earnings? Okay, so we went deep into

this in the alpha report this morning.

So I don't want to go so deep on it now.

I I don't want to sound redundant to

everybody who's already in uh the

courses on building your wealth.

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filesme.com. But what I want you to

think of is

Facebook and Meta. Uh, well, sorry, I

always do that. Uh, Meta and Microsoft.

Meta and Microsoft have an incentive to

butter out how far they are cutting

their or or how like how far out they're

writing off their expenses, right? So

when they invest

in this artificial intelligence

infrastructure, which both of them say

they are, they're telling you bluntly

that we are not worried about being

conservative right now. And they say

this bluntly as well. We are worried

about gaining market share and we're

going to throw as much money and as many

dollars as we possibly can to make sure

we get as much

access to to this cycle as possible

because it frankly I mean if you think

about it pumps the stock right so it's

fantastic but look at the balance sheet

briefly at um Meta and you'll see some

of the changes of what are going on

you're really doing is you're turning

cash into a depreciable asset.

uh at a pretty shocking rate, less so at

Microsoft, which is part of the reason

why I feel like it's somewhat ironic

that Meta is so far outperforming

Microsoft today. But look at this. In

2025,

Meta went down to about $12 billion of

cash, whereas they had about $44 billion

of cash and their marketable securities

didn't really change at all. So, it's

not like they bought a bunch of

treasuries instead and moved it around.

uh instead what you're finding is their

plant property and equipment category

has exploded. You've got about a $26

billion increase in plant property and

equipment here and about a $32 billion

decrease in cash.

So you're throwing a lot into plant

property and equipment. And these are

this is net, right? So net of

depreciation which basically means you

probably depreciated the other $6

billion away. Now this is interesting

because when we consider depreciation

these companies are now trying to write

off their products over the longest

terms possible 2 to six years at

Microsoft this is the Microsoft 10K they

do 2 to six year depreciation and Meta

announced extended depreciation of 5

12%. Now why does that matter? Long

story short, again, refer to the video

this morning uh in the course member

live where we talked about the soggy box

analogy, but basically what you're doing

is you are reducing your cost of goods

sold today to make your earnings look

better today. Now, that's great as long

as those assets create value for the

long term. So in the near term uh taking

depreciating more now

makes earnings and margins look way

better today but borrows

from the future. That's kind of the way

to think about it. And the longer you

you've depreciated over, you know,

usually as an individual business owner,

you want to depreciate as quickly as

possible because you want to save money

on the taxes, right? But these companies

are different because they want to show

you big margin growth because it props

up the stock which is good for

employees. It's good for talent

acquisition. When the stock goes up, it

also implies that the business is doing

well, which means other businesses want

to hire the business to do business

with, right? Like you want to you want

to have your own AI servers, call

Microsoft. They'll install on-prem

servers for you. You know, that part of

their business is actually shrinking

because a lot of people are going to the

cloud. Maybe more people go to the cloud

with Microsoft because of that. I mean,

we saw the insane amount of seats that

are being added. We had uh, you know,

UBS adding co-pilot seats for all of

their employees. 25,000 seats being

added for Adobe, Fizer, KPMJ, Barlays,

100,000 seats, up from 15,000 seats.

Microsoft, seven times as many tokens

uh, you know, being used in co-pilot uh,

over the last year. So, like the AI

adoption is real. The question is how

long does that ROI keep going and do you

kind of keep milking these high margins

now but borrow from an un certain future

where all of a sudden if you have to

write off some of these costs in an

accelerated manner in the future because

of either a recession or a slowdown or

the valuation of these chips declines

faster or your ROI is lower the margins

are going to get hit really bad at

Microsoft and Meta. So, you're really at

sort of like the one of the most

frothiest moments right now where

everybody wants to adopt AI, which is

fine. But one thing I talked about this

morning in sort of our public life, we

we briefly talked about how really

what's happening in the economy is

everybody's lining up for and this is an

analogy, okay? And this is I'm not

imputing whether or not you should take

a vaccine or not, okay? That's not what

this video is about. If if you're

worried about vaccines, get yourself

life insurance in as little as five

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It's paid partner of the channel. But

take a look at this. Everyone's lining

up for the vaccine, which is basically

like GPT co-pilot or whatever. But it's

kind of like a parasite or virus being

injected into everyone. Because the

reality is when the more you rely on GPT

or AI as a person,

there's no simple way to put it. Well, I

guess there is. It's just crass. You

become dumber,

less critical thinking abilities, uh, or

or, you know, fewer critical thinking

abilities, uh, and and you become

less well-rounded. This is just at least

what MIT has been studying. And this is

sort of something that we suspected. And

so this is why I I say like as a hint,

don't tell anyone, oh, I looked it up on

GPT. Like it sounds

low IQ. I hate to say that. You just

keep that in the back. Okay? Don't tell

everybody that the because you put a

highlighter over your name for first to

get fired, right? Think about this. You

know, I I always like to put ourselves

in in the position when we look at house

hack. We look at so many jobs that we

had when when we were just doing machine

learning AI, you know, before AI, it was

AI. We're just doing machine learning

with wedgefinder uh which has now

evolved into uh machine learning and

LLMs. Uh and then LLM obviously and

office work. These are incredible

technologies and increase efficiency so

much. But the amount of jobs that we

just don't need people in the office for

anymore uh that so many people have been

affected by artificial intelligence. We

see it firsthand like we get so much

more done with fewer people because you

could use AI to just do just very basic

things for you that otherwise in the

past you'd have to pay somebody to do. I

think corporations broadly, the big ones

will eventually see that. We're already

seeing weak small business hiring,

right? The Wall Street Journal had a big

piece on this uh this morning. Uh in

fact, if I go to the front page of the

Wall Street Journal, I think it was on

their front page. Anyway, it was it was

somewhere uh on the Wall Street Journal

about small businesses

uh really with the smallest amount of

job openings. And that's probably where

you're starting to see like, wait a

minute, you know, every salary we save

is massive money. Massive. I mean,

there's a huge ROI in cutting people out

if you can replace them with AI. Now,

this is really sad because what it does

is it it takes money from people who are

the consumers of the economy and gives

it to the corporations. And, you know, I

I see that as a long-term the rich get

richer and the poor stay poor. I don't

like that. I think that's that's

painful. But, you know, sure, it's going

to be good for corporations and good for

shareholders of corporations presumably.

But, take a look at this. This is my

thesis. My thesis is that uh everyone is

lining up for the vaccine, but

corporations are really injecting a

parasite or virus into everyone. You

know, Palanteer said this well.

Corporations used to be skeptical of AI.

Now they're all in. Spread the cheeks,

baby. Take my data. Take everyone.

Upload us to the cloud. Give everyone

AI. Everyone feels great about getting

the vaccine, but the reality is 30% of

y'all are going to die. You're going to

lose your job.

The first people to lose their job, this

is a just a big like human warning for

you, okay? The first people to get cut

are the people bragging about how much

AI they use. the the people, you know,

putting every comment

uh into GPT in a meeting or literally

like sorting their GPT archives uh

because they're all on GPT or worse GPT

debating other people in the office.

Because when you do that, it's kind of

like why why do you have to pay somebody

a salary who's GPT debating? like you

could

you just debate GPT yourself.

So what happens then is the corporation

comes out skinnier, but the vaccine

makers AI have a cyclical reaction here,

right? So at first AI wins big. This is

your your Meta, your Microsoft, your

super microcomputers still probably

going to 71 bucks, your Nvidia, your

AMD,

you know, Coreweave to some extent,

right?

And so it's not really the corporation

who loses in the long term. It's really

the people. And so the more this gets

injected, all these seats, the more I

think you're going to end up having

companies like UBS, I mean, how many

employees does UBS bank have? Uh, or or

even KPMG, you know, an auditor like

auditor, perfect for AI, right? What was

another one? It was um UBS Barlays was

another one. UBS uh how many employees?

Okay, not to be confused with UPS, the

shipping company that's laying off a

bunch of people. 110,000

employees. So 110,000 employees, you

give all these people AI. Well, how many

more people do you need to sit there to

read earnings calls? You don't. You need

one person could probably do 10 times

the earnings calls or more and what

would have previously taken a team of

researchers. Same thing with uh earnings

reports, discounted cash flow models,

customer service. It's insane.

So eventually

these jobs go away and that's your

turning point for AI, right? That's your

turning point. It's the cyclical

reaction is you have to pay attention to

that jobs market and that's why Friday

is so important because Friday is going

to give you a license to the moon or uh

you know it it's some form of omen. I

think

uh Jerome Powell's uh Wednesday warning

uh was a heads up that Friday might give

us a license for number one a moon in

stocks and number two uh no rate cuts

for a while. And frankly, this makes

sense. You shouldn't want rate cuts if

you're in the stock market. If you're

investing in stocks right now, you don't

want to hear the Federal Reserve saying,

"Yeah, we need to cut rates because

things are slowing down."

So, this this is this is the the issue.

You know, somebody here in the chat

says, "One smart person using AI can get

the amount of work done of five people

10 years ago." Exactly.

That's the problem. That's where all of

these people lose their jobs. But what

contributes to the economy for now,

right?

Uh until layoffs,

the economy is 70% consumer.

It's about 2% AI.

But how much of the stock market is AI?

The stock market is probably 80% AI,

right? In terms of valuation, the stock

market valuation is probably 80% AI. So

look at this difference. If the economy

measured by GDP is 70% the consumer and

it's 2% AI, you know, call it a trillion

bucks, the rest is the consumer. Uh the

stock market valuation being 80% AI at

some point when when layoffs hit, that's

when you need to be worried about AI

because that's when the the air comes

out of the bubble because you just don't

need that many employees. one capable

person with with GPT can do so much

more. And so the survivors will do very

very well.

Uh so why would I use UBS at all if I

could just go to AI? Well, exactly. Uh

now, one of the reasons you would use a

company like UBS would be investment

banking. like you can't IPO yourself,

but UBS might be able to lower the costs

of you hiring an investment bank to IPO

or a research firm to help you IPO. So

that way, you know, they have because

they have lower cost, you have a lower

cost and it's easier for more people to

IPO. It's an idea there. So, um,

somebody here says, but the Fed cut in

2019 as a midcycle adjustment. Why can't

they do that for 2025? because in 2019

we had below trend inflation. We had

about one and a half percent inflation.

Uh the and it was more of a pause than

anything. Uh it was a pause in getting

off of zero. We had very very low

inflation. The Fed kept telling us

inflation was coming but then GDP

started falling especially following the

Trump, you know, a year after the Trump

trade war. Uh that's the opposite of

what you have right now because you have

core goods pricing skyrocketing which is

a problem. Uh, so it's not great. So I

think that JPAL basically told us

set up for a moon in stocks and

recognized that what Microsoft and Meta

gave us was actually really really

insightful. I mean very incredible

numbers. So I mean we already know a lot

of their their margins and their

revenues and all this but I want you to

see some of this some of the other

comments that they had.

So, uh, Meta is of the impression that

they're going to bring super

intelligence to everyone and that, you

know, everybody's going to end up with

Ray-B band glasses, otherwise you're

going to be left behind. Uh, I'm not

super convinced that everybody needs

glasses because we could just use the

phones and, you know, the glasses have

some downsides as well. I know Mark

thinks they're the most stylish thing

ever. But what's interesting for Meta is

they are seeing a lot more user

engagement in their content. uh they are

seeing increases in uh

engagement on Facebook at 5% and

Instagram at 6% increases with more

conversion of ads as well. 5% more

conversion Instagram 3% more Facebook

because of AI. So you're actually seeing

real benefits of sort of AI giving us

what we want. You know how AI glazes you

when you talk to the chat bots? They're

really good at figuring out like where

your head is and mimicking you. And if

they can give you the content that you

want, that's fantastic. Uh, and so

giving you the content that you want is

is uh a great way to keep you on the

platform. Somebody says uh

uh let's see here. Somebody says, "Lower

rates. If companies can borrow at lower

rates, wouldn't that improve their

profit margins?" Well, no, because it it

depends why you're cutting rates, right?

If you're cutting rates because the

economy is slowing, your revenue is

going down anyway. Nobody cares about

margin at that point. In fact, if you

listen very closely to what Microsoft

and Meta tell you, they say,

specifically Microsoft, they had a whole

segment on this. They say, don't focus

on the margin right now. Focus on

revenue because if we can get market

share, the margin will come. So listen

to that very closely. They said

margin does not matter right now. What

matters is revenue growth and market

share. This is why Microsoft spent

basically all of their intelligent cloud

revenue on

uh uh on on investments into AI.

I'll show it to you so so you could see

it directly in the document. And mind

you, you know, I I read these documents

because I kind of get entertainment out

of them. Uh I'm not the biggest fan of

uh

relying solely on AI myself. Uh so I'm a

big fan of just reading them. I feel

like I get the nuance and the nuance

lets me read between the lines. But

anyway, here's what the intelligent

cloud sector is. So we know this is

obviously Azure and you know the

products as people are very uh gung-ho

about intelligent cloud.

But what I want you to see is the

intelligent cloud rev and we're going to

compare that to the cash flow.

And so if we look at intelligent cloud

right here, here's Intelligent Cloud,

that's supposed to be insane. The

income's pretty insane. So look at the

revenue. Intelligent cloud revenue is

$106 billion.

Mind you, this is for uh 25 in billions.

So this is a year because of their

fiscal year being over or whatever.

Their cost of revenue was 40. Some of

that includes depreciation and their

operating expense is about 21. So they

had operating income of around 44 but

some of that is depreciation. You can

add back in potentially you know call it

somewhere between 44 to 65 billion

uh was their operating income from the

intelligent cloud. 44 to 65 billion.

Keep those numbers in mind. How much did

they spend reinvesting into plant

property and equipment? Well, here it

is. Additions to plant, property, and

equipment, $64 billion.

So, in other words, my belief is they

basically took 100%

of their intelligence cloud

net income adding depreciation for that

very investment back in. otherwise you

would be double counting it in that um

so 100%

and threw it back into

infrastructure. So they're kind of like

cool outside of depreciation we net

about $64 billion from intelligent cloud

and we have to estimate that because

they purposefully tell you that they do

not break out their depreciation. They

don't they don't want you to know

exactly what the depreciation is. Uh,

and that's strategic because I we know

they're buttering this out. They're

buttering this out because they want to

pump their margins. So, they literally

say that. Uh, oh, if I could find the

comment. It's It's actually pretty

impactful in my opinion to see them say

it.

Uh, so I'll pull it up for you really

quick. Uh, oh,

and this is where they depreciate. This

is where they give the time frames.

It must be in the management notes just

below. Oh. Oh,

there it is. Boys and girls, this is the

stuff that AI is not going to find for

you. All right. It is impractical.

Impracticable.

Well, that was like a pilot word. It's

impractic.

Yeah, I know. That's right. For us to

separately identify the amount of

amortization and depreciation by segment

that is included. In other words, they

don't want you to know the details of

the depreciation because it's the

perfect way to hide

uh how they're buttering out the

depreciation

to essentially

uh uh drive this this uh you know high

margin or this appearance of high

margin. Really what they're doing I mean

imagine this. It's kind of like I I'll

give a quick sneak preview of it. I if

you

if you my soggy box analogy briefly

soggy box simplified let's say the soggy

box pays you $1,000 this year but it

costs you $1,000 and at the end of the

year it's totally worthless. Okay, super

simplifying here. Okay, and I'm being

extreme on purpose. But then you buy the

soggy box and you actually tell me it's

going to take 10 years for it to be

worthless.

then you're going to recognize $900

of profit and only $100 of expenses.

That's why you hide depreciation. You

don't want people to know that one of

the reasons your margin is so high is

because you're spending a 100% of your

net income intelligent cloud back into

those chips.

And there's always the question of,

okay, well, what what's the long-term

residual value of those chips going to

be if you're writing them off over five

and a half years? And mind you, they're

both doing that. Watch this. We'll we'll

Google it together. Okay, look, private

browser. Uh, let's do uh what are we

going to do? Oops. Uh,

stay on that. Uh, Microsoft depreciation

schedule. Nvidia. I I don't think I have

to put Nvidia chips in here. Microsoft

depreciation schedule. and

h I can't find a good because I get all

the Microsoft results. U Microsoft

appreciation change extends.

Let's see here. Let's see if I could

just find it under the new. There it is.

There it is. See, look at this. Jan

30th, Meta, here's Meta and Microsoft

did the same thing.

Uh I don't want to waste too much time

on it, but basically Microsoft, Google,

Meta, Amazon added almost 10 billion to

their profits in the past year, two

years by extending the estimated working

life of their service servers. They're

all doing it. Microsoft, Google, Meta,

and Amazon. Meta extends server life

again, saving it 2.9 billion. So this is

known, right? Like people are aware of

this, but but you might not be aware of

this. like some people aware of this but

accounting people are aware of this. Uh

but but that's that's something

fascinating to to pay attention to. So

uh then

let's see some other comments here. Now

they justify this by saying that they

still see a lot of demand and that their

spending is correlated to demand.

Mind you, like these are the kind of

analogies and and the investigation that

we usually like to do just in the course

member live streams uh in the mornings.

So, you're welcome to join those all of

the time. And we we go deep into this

kind of stuff just to the goal is to

give you perspective. The goal is to

teach you how to fish. You know, I I

want you to be able to look at a stock,

understand how to draw the trend lines,

understand how to analyze the volume,

understand how volatility is going to

affect your your stock options,

understand, you know, why, you know, on

a big AI day like today, Tesla's not

doing well. Like, these are things we

talk about even before the market open.

I'm like, today's not a Tesla day. I

literally said it this morning. I'm

like, today's not a day for Tesla. Like,

we'll be lucky if it just holds on to

318 today. So, nobody's going to care

about Tesla today. uh and you know after

an AI boom like what we just had with

earnings yesterday. Uh so you get all

that at me.com

and you could probably write it off on

your taxes. A lot of people do that.

Business expense for education. All

right. AI. Okay. So we talked about the

super intelligence. We talked about ads.

We talked about the glasses revenue up

expenses up longer useful life. So they

touched on that. That has to do with

depreciation. They talked about their

scale AI investments. Accelerated

impressions growth price per ad up 9%.

This I thought was very interesting.

Actually increasing the cost of

advertising at Meta right now. They say

that's because businesses are able to

get a greater AI uh benefit. Maybe

that's true for right now and

conversions. So again, everything's good

until you know you get higher layoffs.

Biggest investment will be servers going

forward. Okay, this is a big deal

because Meta spent a lot of money on uh

like data centers or larger buildings.

Now they're spending more money on chips

and servers. Microsoft is doing the

same, which means a lot of their future

capex is going to be going into things

that are going to depreciate faster.

So, uh, the CEO at Microsoft allin, let

it compound. We're focused on the

revenue now. The cost will surely

improve over time. This isish, but

that's okay. Uh last year they spent

about half of their capex money on

servers and the other capex on more like

infrastructure things. Now they expect

that to flip to a higher percentage of

quote short lived assets going forward.

Basically CPUs and GPUs which is great

for Nvidia and AMD and Verive water

cooling super micro computer for the

racks. Like if you need a bunch of racks

call up super micro computer. Yo I need

a rack. Uh nice big rack. Who doesn't

like a big rack?

Uh Microsoft talked a little bit about,

you know, just this adoption even at

like hospitals, doctors, Verizon for

sales, Mercy Hospital had children born

there. Uh well, it's a chain, but but

anyway, weakness in the hiring sector

scene on LinkedIn and their headcount

didn't change either. So, I think

everything right now is really setting

us up for this sort of continuation of

this stock sort of like mooning

basically

uh until layoffs. The problem is once we

start seeing layoffs, it's too late.

People are going to deny it too. There

will be a lot of denialism. And I think

that's why there's some some reason to

pay attention to what's going on with

these job loss numbers uh in the

challenger job cuts report because over

time

I think what what what you'll see is

markets will start reacting to bad jobs

data in time and margin compression of

companies but people will just see it as

an immediately a buy the dip because

that's historically what's been great

but once jobs really roll over we have

major problems.

Good thing is we're not seeing that

right now. And the good thing is JPAL is

giving us good news. He's telling us

basically, hey, no need to cut rates

anytime soon. So, in other words,

bullish for now based on Powell's heads

up. We will know more. At 5:30 in the

morning tomorrow, I'm going to be live.

So, make sure you are a member of the

Alpha Report. We're going to be talking

about it a lot uh in the alpha report

and strategy for the day tomorrow. What

to do, you know, what what I'm doing

with buy sales. That's a big deal

tomorrow.

Uh and so, uh yeah, look forward look

forward to seeing you there. We'll see.

And again, it's just a jobs report. So,

you know, one report doesn't make a

trend. Even if tomorrow's a really bad

report,

uh it doesn't make a trend. If

tomorrow's a really gray report,

technically it doesn't make a trend

either, but it does kick the can down

the road on on rate cuts a lot, but it's

actually great for stocks. So, if you

want moon, if you want more Moon,

uh you want a really good jobs report

tomorrow. Okay. If I had to guess, like

somebody put a gun to my head tomorrow.

Uh Kevin's guess

if Powell

got the leak, which I think he did.

Kevin's guess is 3.9% unemployment.

You know, uh last was 4.1, estimate is

4.2. That basically means no rate cuts

this year

and bullish for stocks.

Check yourself before you rack yourself.

Huh? All right. Well, that's that's one

way to put it. Uh, anyh who. Yeah. All

right. Go to me.com. Check it out. Use

the coupon code. It expires tonight. No,

sorry. Tomorrow's Friday. So, tomorrow

night.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this. We'll we'll try a

little advertising and see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.