00:00 Speaker a
Let's start with the meta. This stock is up 10% outside of business hours. Gill, what are you making about the outcome? Is that move justified in your opinion?
00:13 Gil
yes. Yeah, the result, um, the inventory movement makes sense. The result was good for both Meta, and Microsoft and Meta were able to increase revenues by 22%. That's a massive acceleration from the last quarter. And the context is that Google has brought its advertising business closer to 12%. As a result, Meta has gained a large share in the digital advertising market. They do it while at least maintaining the cost that has been controlled so far. So investors, uh, have patience for the CAPEX guidance they are offering. This year is only a small increase, but there were comments on the significant increase in CAPEX through 2026. Investors are selling more ads and even more as long as revenues are growing rapidly.
02:00 Speaker a
So they are spending, spending, spending, guil, but are you listening, are you watching the ROI on that spending?
02:16 Gil
To some extent, when the current business is going well, investors with meta have always had patience with long-term investments. When the digital advertising business, which is the lifeblood of the meta, is on track, investors are patience for real-life labs, metaverse, and now these long-term super-intelligence investments. That's what's happening. In other words, AI investments pay off in your core business. This is how we sell more ads, we sell them for more, we are very good at developing the right feeds, providing the right ads, and we can monetize that the meta is becoming increasingly good at. But investments go far beyond that. As you mentioned earlier in the day, investment is about Zuckerberg's pursuit of super intelligence.
03:59 Speaker a
Gill, um, when you take a step back and think about the role of meta, strategies, and its competitive advantages in the broad AI market, how do you define those advantages?
04:38 Gil
Well, um, they're working towards another platform, the next one. So Metaray-Ban glasses and Oakley glasses. They don't like the fees of having to pay Apple and Android to have an application on their device, so they want the next platform. They want their devices and AI is a big contributor to it. And they are also working towards having a dominant AI model. Well, don't forget a year ago, the Llama 3 was cutting edge and cutting edge. Llama 4 failed. That's why they are actively investing in talent now. Thus, the next iteration of the llama will once again become the latest art. So they can once again pursue this pursuit, um, an all-powerful AI model.
06:04 Speaker a
In your opinion, Zuckerberg is actively poaching the talents of its rivals top AI. When thinking about the risks to this, Gill, I know you have shopping with this, but when a client asks you, what risk is it that I need to think about, what do you tell them?
06:35 Gil
Its founder mode is great when things are on track. Well, that was a more challenging meta. And before that, Facebook is when things don't go well either. If the advertising market falls due to weak consumers, investors could lose Zuckerberg's aggressive investment patience. So it's two great coins, when things are great, you want to have founder mode. Umm, um, um, if the core business isn't, then the impact as a shareholder is a bit less.
