The Long Term Investor

EMMETT did a POP-IN. Good to see him back even for a brief time.

 

Poor AMAZON....they just never get a break. The dreaded....forward guidance.....strikes again. Siting and waiting today.....as the markets open down in the mud and now have managed to climb out of the hole. Not unexpected after the week we have had.

I also assume that we had some people taking profits today after the rally.

This really has nothing to do with anything.....but...I was listening to the Business TV in the background and heard a professional money man....talking about his negative view of the markets. He was asked ......."well dont your clients have concern about missing out on this big rally"? Part of his reply......"well we were way up last year.......but we have lost all of that this year".

It struck me as really funny. I dont think I would find it funny if I was a client. To each their own.......I dont know what his long term record is. Perhaps he is the extremely RARE manager that can beat the SP500 over the long term. I dont think so....but perhaps.

 

Here is the markets today.

Stocks open lower as tech earnings, bank drama weigh

https://finance.yahoo.com/news/stoc...-weigh-stock-market-news-today-120922254.html

(BOLD is my opinion OR what I consider important content)

"Stocks on Friday opened lower as investors look to cap a topsy-turvy week for investors, with a rush of earnings from big tech giants like Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN) holding investor attention.

Through Thursday's close, the S&P 500 and Dow Jones Industrial Average were roughly flat for the week, while the Nasdaq's surge on Thursday put the tech index higher by about 0.5% for the week.

• Amazon falls 3% after AWS guidance disappoints
• 
  Shares of Amazon (AMZN) were down more than 3% in early trading Friday after the company's outlook for its AWS business disappointed last night.
  
  The key comments came from CFO Brian Olsavsky, who told analysts on the company's earnings call AWS revenues were growing at a rate closer to 11% from last year in April, a deceleration from the 16% growth rate seen during the first quarter. In the same quarter last year, we'd note, AWS grew revenues grew 37%.
  
  "As expected, customers continue to evaluate ways to optimize their cloud spending in response to these tough economic conditions in the first quarter," Amazon CFO Brian Olsavsky told analysts on the company's earnings call. "We are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1."
  
  Amazon stock initially rose 10% late Thursday after first quarter results beat across the board.
  
  
• Fed's preferred inflation measure remains high in March
• 
  The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred measure of inflation, showed prices rose 0.1% month-on-month in March and 4.2% over the prior year, data from the BEA showed Friday.
  
  On a "core" basis, which removes the more volatile costs of food and gas, prices rose 0.3% over last month and 4.6% over last year.
  
  The central bank is expected to raise interest rates by another 0.25% when it meets next week.
  
  
• Oil majors Exxon, Chevron report earnings
• 
  ExxonMobil (XOM) reported profits in the first quarter that totaled $11.4 billion, a record for the oil giant.
  
  Reuters noted these results were drive by strong production growth, according to the company's CFO. Exxon produced more than 3.8 million barrels per day in the first quarter, the most since 2019.
  
  Chevron's (CVX) results beat Wall Street estimates as profits rose 5% to $6.6 billion. The company's refining business drove results during the quarter, while production saw profits fall 25%.
  
  Exxon shares were up about 0.5% in pre-market trading following these results. Chevron shares were down by about the same amount.
  
  
• Silicon Valley Bank autopsy reports due out
• 
  In addition to the fallout from last night's results from Amazon and Snap, investors will also be eagerly awaiting reports from the Federal Reserve and FDIC on the events surrounding the collapse of Silicon Valley Bank and Signature Bank last month.
  
  The Fed's report is due out at 11:00 a.m. ET, while the FDIC is scheduled to publish its report at 1:00 p.m. ET.
  
  Early Friday morning, Reuters reported US government officials are working on talks to find a rescue package for First Republic Bank, the trouble San Francisco-based lender that has been seen for weeks now as the likely next domino to drop in the bank crisis that saw three banks — SVB, Signature, and Silvergate — all shutter last month.
  
  Citing sources, Retuers reported Treasury, the FDIC, and the Fed have sought to, "orchestrate meetings with financial companies about putting together a lifeline for the troubled lender."
  
  As sources familiar with the situation told Yahoo Finance's David Hollerith earlier this week, however, deals that might see another institution, or a group of banks, take over First Republic "[don't] make financial sense."
  
  How sweet regulators are able to make any deal could determine the fate of First Republic as a going concern."

MY COMMENT

Pretty much a nothing day today. ALL the anticipated earnings this week came in a good BEATS. We continue with the BEATS today. I am sure BEATS are now nicely OVER 81% to 82%. A historic......way above normal.....reporting period so far.

The EXCUSE for the GREAT earnings. "Well the bar was so low what do you expect".....and...."expectations were so low, how could you not see bests like this".

Of course all of the excuses totally IGNORE the......FACT......that it was the experts that set the bar and the expectations according to what they and all their data told them earnings would ACTUALLY be. They did not set the expectations low to help the markets.....they set them low because that is what they expected to happen. So the BEATS....ARE IN FACT.....huge compared to all the analysis of where earnings should and would be.

You cant have it both ways....although they are trying to......you cant calculate your estimate....and then when you get creamed...claim it was because the bar was set so low......by "YOU". LOL....love it.

 

I agree with this little article.....nicely written.

Investors are making the wrong bet on a recession — and it's going to cost them big time

https://finance.yahoo.com/news/investors-making-wrong-bet-recession-100200047.html

(BOLD is my opinion OR what I consider important content)

"How betting on a recession could wreck the market

A popular phrase among investors and analysts is "the bond market is always right." From predicting downturns to the Federal Reserve's next move, the bond market's historical forecasting track record and its "wisdom of the crowd" quality have given it a near-mythic reputation among Wall Street analysts.

Given that popularity, it's important in the economic-forecasting business to pick your battles with it wisely. That said, it's also important to acknowledge when the bond market is off base, because when the market's expectations run into a vastly different reality, things tend to go haywire — and investors can lose (or make) a lot of money depending on how they're positioned. And it's becoming increasingly clear that the bond market is reading the economic tea leaves all wrong.

Right now, the bond market suggests that the economy is on the verge of a hard stop and a recession that will force the Federal Reserve to cut interest rates to stimulate activity. Actual economic data, on the other hand, points to hardly gangbusters but continued growth for the US. And the longer the market expectation diverges from the economic reality, the more painful the market adjustment will be once it happens.

What the markets are expecting

There is no doubt that the bond market can be an important indicator of where things are going, but it's not infallible. There's already been evidence of its fickle nature earlier this year. Based on the yields of various government bonds, it's possible to determine investors' general consensus about what the Federal Reserve is going to do next — raise, cut, or hold interest rates steady. At the start of 2023, bonds indicated that the Fed would hike interest rates a single time this year — a cumulative 0.25% increase. As the economy showed signs of stronger growth in January and February, the market swerved and suggested that the Fed would need to hike four times to slow activity and inflation — a 1% total increase in the benchmark rate. But after the Silicon Valley Bank collapse and concerns about a lending crunch, the bond market was pricing in three Fed interest rate cuts for a cumulative 0.75% decrease by the end of the year. We're at two cuts now, but it is still a remarkable reversal.

For this consensus to come true, the recent shakiness in the banking system would need to turn into a full-blown credit crisis that brings about an imminent recession. Investors and economists concerned with this possibility have in recent weeks pointed to data showing that people are pulling their money from banks, lenders are getting more particular about who they extend loans to, and that there's been a collapse in commercial real-estate valuations.

On the economic side, the bond market view would probably look something like the Fed's latest GDP projections. The Fed's outlook expects real GDP to advance just 0.4% this year. But how is that shaping up right now? Current estimates put GDP growth for the first quarter of the year at a 2% annualized rate. That means for GDP to sink to 0.4% growth for the entire year, the economy would have to shrink in each of the next three quarters to meet the final estimate. This would be a sudden stop for the economy and have cascading effects for the labor market and consumers. In this scenario, for example, the Fed forecasts a jump in the unemployment rate to 4.5%, which means over 1.6 million people would lose their jobs.

As for markets, this kind of jolt would be particularly jarring. Stocks are pricing in some earnings recovery and a generally strong economy. US indexes are up about 10% over the past six months, while markets in Europe are up even more. So if the bond market ends up being right about the economy, there would be a serious, ugly wake-up call for the stock market.

Given how gloomy the outlook among bond-market investors is, the bar is not especially high for them to be surprised. The economy does not need to defy gravity, it just needs to tread water. And if conditions hold up, the consensus is seriously off base.

What the economy is showing

While the bond market warns of a collapse, the actual economic data is sending very different signals. Business investment is sluggish but has not been much of a growth driver to begin with, and consumer demand is holding steady. In spite of high-profile layoff headlines, thelabor market remains historically strong, even as wage growth cools. A recession should not be ruled out completely — after all, the Fed believes higher unemployment is one way to bring inflation under control. But the time to be most concerned about recession was last year, when residential investment was collapsing, global growth was tumbling, and energy prices were surging. Nowadays, most of the headwinds are abating:

• The drop in mortgage rates earlier this year has already lifted housing-market activity. Builders have sold homes that they've yet to start, indicating more construction on the way.
  
• Global growth is not as bad as it was in 2022. Europe was worried about keeping the heat on, the UK had a blowup with its pensions, and China was tightening its regulatory environment. Today, conditions are not great, but it's obvious they've gotten better, not worse.
  
• Energy inflation has slowed notably from last year. This will be reflected in household utility bills, which will support household incomes.
  

And as for fears of a "credit crunch" triggered by bank instability, I think there are a few important things to point out. First off, there is no middle ground in a banking crisis — it either happens or it doesn't. So far, signs point to no crisis: After a brief period of volatility, deposits in the banking system appear to have stabilized. As for the downstream loan "crunch," the evidence is also lacking. Credit standards and core bank lending were already slowing over the past several quarters, so the tightening doesn't come as some great shock. In fact, bank lending as a percent of US GDP is essentially unchanged since 2016 — this would suggest that the US economy is not nearly as sensitive to shifts in the availability of credit as is thought.

Second, increasing housing activity has brought prospective borrowers back into the market for mortgage loans, and banks are extending those loans — hardly the sign of a cataclysmic credit stoppage. Indeed, homebuilding stocks have been breaking out to fresh highs.

Two roads diverged

Today, predicting a recession means relying on a select few signals to justify your call. I don't think the Wall Street aphorism about the bond market being "right" holds up this time. As I mentioned, the consensus assumes a sudden stop in the economy, so even if conditions are just OK for the economy, the divergence with the baseline could cause a serious market mess.

According to the S&P Global's Monthly US GDP measure, real growth advanced 4.5% in January and 2.8% in February. Assuming that the Fed is serious in its commitment to stomping out inflation, then a period of below-potential growth would be necessary to bring inflation down in line with the central bank's goals. The current data suggest the economy is running slightly above potential — which is not welcome news for a central bank trying to bring down inflation. In fact, there is some evidence that conditions might actually pick up in certain areas. Manufacturing is a good example: The value of the dollar has dropped, making it cheaper for American companies to export their goods abroad, and global growth has strengthened, so there are more overseas customers ready to buy.

The Fed slowed down its interest-rate increases because of the SVB disaster in March, and I suspect they will pause completely at the June meeting to signal that they're taking an extra-cautious approach to the financial-system mess. But if the economy ends up holding up relative to expectations, the Fed's job may not be over. Instead of the interest-rate cuts that the bond market is pricing in, the central bank may be forced to restart rate hikes later in the year to cool off any fears of inflation kicking back up.

If the Fed hikes rates again, the resetting of expectations would slam markets. For stocks, the hope for lower interest rates would be dashed, and there could be a sizable drop as the new reality takes hold. But the stronger economy could provide a cushion, since higher consumer demand would help keep profit expectations afloat. On the other hand, the bond market would take it squarely on the chin. A sudden expectation shift from a weaker economy and lower interest rates to a stronger, high-interest-rate environment would send yields soaring and bond prices tumbling. And the longer investors hold on to the idea of rate cuts, the worse the eventual dislocation will be.

I think the Fed wants to give the economy the benefit of the doubt. After all, they've been underestimating inflation and employment for the better part of the last year. The bond market, however, does not give the economy the benefit of the doubt. And the current mismatch could lead to serious market chaos and investor pain down the road."

MY COMMENT

My current take on recession.......still.....it is not going to happen. OR.......my alternative view.....if it does happen it will be really mild.

I also doubt that a mild recession will be negative for stock investors. The economy is....relatively....booming. There is still a disconnect between the small business world and the big business world. This is not due to the current economy.....but the disruptions of the economic shut-down. Even with a recession I dont see any change happening to the markets.

Right or wrong.....the real question is....."do I care"? Actually....NO. It is irrelevant to me as a long term fully invested all the time if we have a recession this year or not. Recessions, corrections, bear markets, etc, etc.....all the negative economic and market events....are NORMAL.

If you look at the long term returns of the SP500....10% to 11% per year average.......these HUGE gains have happened REGARDLESS of all the bear markets, corrections, recessions, etc, etc of the past FIFTY or more years. Those long term average gains take into account and incorporate all the negative events.

 

We are at about the half way point in earnings. So far....so good.

 

I find it pretty amazing that after all the FED rate hikes of the past year.....the Ten Year Treasury yield is at 3.447%. We are STILL at the historic low end of the scale for the Ten Year. It is as though all the FED hikes did nothing.

Probably the primary place that the hikes did have an impact is MORTGAGE rates. But even with the hikes we have seen in mortgages....the rates are basically now back to NORMAL.

 

I just looked at my account for the first time today. Down at the moment....since I am being dragged down by AMAZON. I can see that is is an EXTREMELY SHALLOW market today by the fact that just about all my other stocks are hardly moving. The shallowness today is also shown by the mild moves in the averages all day today and the bouncing back and forth between positive and negative.

I currently have EIGHT of TEN stocks in the green.......the exceptions AMZN and GOOGL.

Even though AMZN is causing me to be in the red by a slight amount at this moment.....I am happy with how my portfolio is performing after the big gains this week. I will take eight of ten stocks UP all day long.

BUT.....we are a long way from the close......and....dont worry if you want some drama and good old doom and gloom....the FED meets next week.

 

LOL Smokie....on the first post above.

I also like the second one with the Frost poem. I doubt that poem is used in school today....but it was a classic in school back in the old days.

 

Poor AMAZON.....they are currently at $105.52....down by nearly 4% today.

Looking at a longer term chart.....I see that they have basically gone back THREE YEARS in their share price. In early February of 2020...they were at the same price per share. They than had BIG GAINS over the next couple of years.....all of which have now been wiped out.

On the positive side they ARE up by about 22% so far this year. Thank goodness since that gets them back to three years ago. Over the past five years they are averaging +6.6% per year gain in share price.....in other words a gain of 33.5% in five years.

Of course I own this stock. I have no plans at the moment to sell my shares. For a while now I have been saying that I have it on a 1-2 year watch. I continue in the same mode. I am just not ready yet to pull the plug. I need to see how the company does once we get away from all the pandemic turmoil and into a strong economy.

There are many transitions that are happening right now in the business world with technology and AI.....I want to see how all this impacts companies like AMZN.

 

so....I was talking about one of my stocks earlier....AMAZON. BUT....for me my ENTIRE PORTFOLIO is my primary focus. I try to not get too caught up in individual stocks. I prefer to think of the portfolio as a "whole". As long as the entire portfolio is performing nicely I try to not micro-manage the individual pieces.

 

I noticed the low GDP number and at the same time, one measure of inflation was up....the other day. Here is some commentary.

The latest GDP numbers have economists fearing more than just a recession: ‘The U.S. might well be facing stagflation’

https://finance.yahoo.com/news/latest-gdp-numbers-economists-fearing-190546110.html

(BOLD is my opinion OR what I consider important content)

"The U.S. economy has been surprisingly resilient in the face of aggressive interest rate hikes and stubborn inflation over the past year, but it started to show signs of wear and tear in the first quarter. Annualized U.S. gross domestic product growth slowed to 1.1%, the Bureau of Economic Analysis (BEA) reported Thursday, well below consensus expectations on Wall Street for 1.9%. At the same time, one of the Federal Reserve’s favorite inflation gauges, the personal consumption expenditures (PCE) index, increased to 4.2%, higher than the expected 3.7%.

“This morning’s data was the worst of both worlds, with growth down and inflation up,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance.

For over a year now, some of the financial world’s brightest minds, including billionaire investors, hedge fund managers, and renowned economists, have warned that rising rates will ultimately spark a recession. But the latest GDP and inflation numbers have some experts worried that stagflation—the toxic economic combination of slow growth and high inflation that crippled the U.S economy in the ’70s—could be on the menu too.

Chris Campbell, chief policy strategist at the global risk consulting firm Kroll and former assistant secretary of the Treasury, told Fortune that while he still believes a recession will begin in the second half of this year, he’s also “growing increasingly alarmed about the possibilities that the U.S. might well be facing stagflation.” And some 86% of fund managers said stagflation best describes the outlook from the global economy over the next 12 months in Bank of America’s April Global Fund Manager Survey.

Although the unemployment rate remained near a record low at 3.5% in March, giving some economists faith that the economy can avoid a recession or stagflation, Campbell warned that it’s a lagging measure: “I expect that we will see more people unemployed as we get deeper into this calendar year.”

Fed officials have raised interest rates from near zero in March 2022 to a range of 4.75% to 5% in hopes of cooling the economy and reducing inflation to their 2% target. But even core inflation measures, which exclude more volatile food and energy prices, haven’t yet cooperated. The core PCE index rose from 4.4% in the fourth quarter to 4.9% in the first three months of this year.

Eugenio Aleman, chief economist at the financial services giant Raymond James, said Thursday that with the latest inflation data still far from the Fed’s 2% target, he believes the central bank will raise rates another 25 basis points at the Federal Open Market Committee meeting next week, adding that the data “strengthens our conviction that there will be no rate cuts in 2023.”

Independent Advisor Alliance’s Zaccarelli echoed those comments, adding a warning that “the Fed clearly needs to keep raising rates (because of inflation) and they are going to be raising rates right into a slowdown.”

Some factors masked the underlying strength of the economy in the BEA’s latest data release, however, including a decrease in inventory growth. In 2022, U.S. companies boosted GDP growth as they aggressively rebuilt their inventories after years of crippled supply chains, but now that trend is over.

Thomas Simons, Jefferies’ senior economist, said that this inventory factor reduced annualized GDP growth by just over two percentage points in the first quarter and hid relatively strong demand from consumers. But like many of his peers, Simons also argued that the latest data confirmed GDP will “start to slow substantially in Q2 and start to contract in the second half [of the year].”

“Policy drag is about to kick into a higher gear that will unleash a full-blown layoff cycle and recession by midyear,” he wrote in a Thursday note.

And Morgan Stanley’s chief U.S. economist Ellen Zentner said Thursday that after a “modest step down” in economic growth in the first quarter, she is “tracking” second-quarter GDP growth at negative 0.4%. “We expect to see significant slowing into 2Q23 as the cumulative effect of tighter monetary policy as well as banking pressures push growth into negative territory,” she wrote in a note to clients."

MY COMMENT

I am still hoping that we only have one more FED hike to go....next week. Worst case we might get a second one after that. Either way we are than facing a long pause in the rate hikes.

At this point with the data ll over the place the FED has no clue what is really going to happen with the economy over the rest of this year.

As to STAGFLATION....it is possible....but not likely in my opinion. The jobs markets are just too strong. The underlying consumer economy that I see when I am out and about very day is too strong.

I have noticed a drop off in the restaurants that I go to every day. I attribute that to the fact that prices are now off the charts in some restaurants. For example......the other day we went to a place and got two pizzas and one salad....price $50. And this was not some fancy high end pizza place. Just one anecdotal example but we are seeing this at many of the down home places we go to every month.

 

This is EXACTLY why I think we are on the verge of a MASSIVE BOOM in the big cap tech companies.

Tech giants are pouring money into A.I. as they cut costs elsewhere

https://www.cnbc.com/2023/04/28/tech-earnings-calls-show-mega-cap-companies-going-big-on-ai-.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• In calls with analysts this week, Alphabet, Microsoft, Amazon and Meta emphasized their hefty investments in large language models.
• Artificial intelligence has been the hot topic in tech since late 2022, when OpenAI introduced its chatbot called ChatGPT.
• “We’ll continue to incorporate generative AI advances to make search better in a thoughtful and deliberate way,” Alphabet CEO Sundar Pichai said on the company’s earnings call.

Tech investors are eager to hear how much industry leaders are bolstering profitability now that they’re in cost-cutting mode.

But there’s one area where they also want to see hefty investments: artificial intelligence.

Microsoft, Amazon and Meta all reported quarterly results this week, updating Wall Street on their efforts to improve efficiency as economic concerns mount. When it comes to AI and the latest boom in so-called large language models (LLMs) that power products like ChatGPT, the mega-cap tech companies can’t afford to get left behind.

Generative AI programs use increasing amounts of data and processing power to produce outputs that seem like they were made by a human — a block of text, a snippet of code, or a computer-generated image. They require specialized supercomputers that aren’t cheap.

On their earnings calls this week, tech CEOs talked at length about the potential for AI, whether they’re building their own models or rapidly integrating it into products. The common theme was their emphasis on the large sums of money they’ll be spending to build and run these applications.

Here’s what executives from Alphabet, Microsoft, Amazon and Meta told analysts:

ALPHABET

Sundar Pichai, Alphabet’s CEO, is under intense pressure to deliver AI products due to the perceived threat that the company’s core Google search engine faces from the sophisticated chatbots hitting the market. The company recently declared an internal “code red.”

Pichai said on Tuesday’s earnings call that the company was making “good progress” towards its AI goals.

“We’ll continue to incorporate generative AI advances to make search better in a thoughtful and deliberate way,” Pichai said.

He said Google is using AI to improve the conversion rate of ads and reduce the amount of “toxic text” that goes into AI models. The company is also combining two primary AI teams, Brain and DeepMind.

Pichai said that in addition to using its own homegrown chips to power its models, it’s using processors from Nvidia, which makes the vast majority of graphics chips used to train and deploy cutting-edge AI.

MICROSOFT

Microsoft is using OpenAI’s GPT technology in its Bing search engine, Office, and Teams teleconferencing system.

CEO Satya Nadella says that AI will eventually drive revenue growth and is already sparking increased uptake in the company’s apps. Bing, for example, has seen downloads quadruple since Microsoft added a chatbot, he said. Microsoft has generated over 200 million images through its Bing integration.

Nadella warned that a significant amount of capital will be required to build out the massive datacenters needed to run AI applications.

“We will continue to invest in our cloud infrastructure, particularly AI-related spend, as we scale to the growing demand driven by customer transformation,” Nadella said. “And we expect the resulting revenue to grow over time.”


AMAZON

Amazon CEO Andy Jassy gave an unusually lengthy response on Thursday to an analyst’s question about the company’s generative AI plans.

Jassy said Amazon is building its own LLMs, and designing data-center chips for machine learning, emphasizing that the market is massive.

“These large language models, generative AI capability, has been around for a while. But frankly, the models were not that compelling until about six to nine months ago,” Jassy said. “They have gotten so much bigger and so much better so much more quickly that it really presents a remarkable opportunity to transform virtually every customer experience that exists.”

Jassy also said Amazon’s size would allow it to become one of a handful of companies building LLMs, which can take hundreds of computers running for weeks, overseen by expensive machine learning engineers.

“There will be a small number of companies that want to invest that time and money and we will be one of them at Amazon,” Jassy said.

Unlike Microsoft and Google, Amazon’s focus is selling access to the technology through its Amazon Web Services division. However, Jassy said Amazon will work on some applications, such as programs to help engineers write code.

“Every single one of our businesses inside of Amazon are building on top of large language models to reinvent our customer experience,” Jassy said. That includes voice assistant Alexa, he said.

META

Meta CEO Mark Zuckerberg tried to dispel the notion that his company is no longer focused on the metaverse after turning his attention in that direction in late 2021.

But he wanted investors to know that Meta can invest in metaverse technologies while simultaneously putting tons of resources into AI, which he called a “key theme” for his company.

Zuckerberg said that while the company has used machine learning to deliver recommendations and power products like Facebook’s news feed or ad systems, a new main area of focus is generative foundation models.

“It’s been a pretty amazing year of progress on this front, and the work happening now is going to impact every single one of our apps and services,” Zuckerberg said.

He said the company would work on a variety of products using the technology, including chat experiences in WhatsApp and Facebook Messenger, tools for making images for posts on Facebook and Instagram, and eventually programs that could spit out entire videos from short descriptions.

A concept he’s particularly excited about is “AI agents,” which often refer to AI programs that can carry out goals.

“There’s an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful,” Zuckerberg said. One possibility for an AI agent would be to handle customer service for businesses, Meta has said.

Zuckerberg discussed the company’s big investments to build out its datacenters for AI applications. He said the technology was the “main driver” of Meta’s growth in capital expenditures over the past few years.

“At this point we are no longer behind in building out our AI infrastructure,” Zuckerberg said.

That doesn’t mean Meta is done buying graphics processors. Zuckerberg said the company would need to “continue investing,” but would do so after it launches its generative AI products and gets a better grasp on the resources required."

MY COMMENT

This AI investment by the big tech companies....and the resulting money to be made.... could rival the advent of the computer era. The companies above plus NVIDIA are solidly in line to benefit the most from this trend due to their market size and the money they have to invest in this tech. In hindsight....we might see that the AI ramp up was one of the most significant business drivers in history. This will cut across every business in the entire economy.

I would not and am not betting against the tech giants above including NVDA.