Meta and Tesla earnings, Tesla-SpaceX merger talk and Jensen Huang on the energy boom

Hello and welcome to Market Domination. I'm Brook Palama and we are live from our New York City headquarters. There is just about an hour to go until the closing bell. It is going to be a jam-packed afternoon and as we make our way towards that close. Stocks are moving higher as investors await key earnings from Tesla and Meta. Yahoo Finance's NES Frey standing by. But in there are some key other players here. AT&T moving based upon some uh Starlink uh threat right there. Also, we have a Ramco also moving based upon those latest announcement about an oil fields getting attacked. >> Yeah, that's right. So, we have seen oil prices moving higher and part of the reason why you saw a dip in stocks uh just a little bit ago and that's because you saw Brent going to $110 a barrel. This is after Saudi Arabia said that uh one of its Aramco oil fields had been attacked. And so you saw oil jumping. You saw longdated bond yields also going higher. And you can see on our Wi-Fi interactive board that you also are seeing uh that uh the Dow uh is up about half of a percent, but nonetheless uh you've got the NASDAQ also up 1%. But you did see a dip when it comes to uh these stocks earlier. But just taking a look under the hood where we're at with the sector action. As you can see there on our Wi-Fi Interactive, you've got technology stocks that are really leading. Then you've got industrials that are following and utilities that are also higher. And over on the NASDAQ 100, you've got Nvidia that's higher. SpaceX, of course, which we have been talking about so much, up about 8%, pulling back from its 10% gains from earlier today. And then you've got Tesla that's up more than 3%. So, it's very much technology that has been leading the gains here. >> Anz, can you look at take a look specifically at AT&T based on the Star League threat? How are investors responding this afternoon? And can you explain a little bit more about what's going on there? >> Yeah, this is basically from uh last night on the earnings call with SpaceX. SpaceX was asked about its Starlink mobile initiatives and basically their CEO saying that they plan to become a major mobile carrier. So of course this puts pressure on the legacy mobile carriers like AT&T. Now AT&T reported its results and on the earnings call management was asked about the threat of Starlink and uh they basically the the CEO basically pushing back a bit against this saying that this is not something that can get done overnight saying also that AT&T has uh basically built out so much infrastructure that a lot of the traffic when it comes to mobile is happening inside buildings anywhere between 40 and 45% of that traffic and That's where satellites lag so to speak. So management pushing back against that threat of Starlink but nevertheless you have been seeing AT&T weighed uh because of this threat and because of the uh quarterly results they came in uh better than expected and now wireless net additions those came in lighter than what the street had been expecting. So you're seeing the stock today down about 6%. And as some of that uh pressure leading into other wireless carriers as well, we see Verizon down nearly 3% as we make our way towards the close. Aness Fay, thank you as always. >> Thank you. >> Energy is the top performing S&P 500 sector so far in 2026 and the surge coming not just from rising oil prices, but also from the demand thanks to AI infrastructure buildout. Nvidia CEO Jensen Wong discussed the opportunity to invest in energy in an interview with Zia Jrosza at GTC Berlin this morning. >> If you look across the entire five layer cake that I talk about, the energy sector is booming. All the companies in the energy sector are booming. This is the best chance to invest in sustainable energy at no better time than you know now in the last 100 years. Jeffrey's global head of sustainability and transition energy and ticket Shaw joins me now to discuss this and more. Let's start with just what you heard from Jensen Wong. What do you make of this buildout and the opportunities that lie ahead? >> Well, well, first of all, thank you very much uh for having me. Look, we're in the glory years of energy investing and we're in the glory years of energy addition and energy transition. It's all happening. We are seeing more investments in lowcarbon energy than ever before. Uh just last year there was $2.3 trillion that went into lowcarbon capex. And we're seeing a lot more energy of course in fossil fuel energy too because we need base load power a lot of which is provided by natural gas. And so it's a great time to be in the energy space right now. the AI driver is causing a lot of technologies that were once seen as 20 30 years away to be pulled up towards five to 10 years. And so you're seeing a lot of innovation happening. You're seeing a lot of capital deployment. And I agree with Jensen completely. In fact, I say that this is the best time to be investing in energy that we've ever seen in our lives. >> Any speaking of you say that AI related investment is on track to really become the largest capex boom in US history. When you think about that, where exactly is that money going beyond what we're hearing from leaders like Nvidia CEO and and where in terms of just destinations in the US, where is this market, who is it benefiting the most? >> Well, I think the most important part of this infrastructure build with regards to energy is the grid. Um, everyone who's been working on energy and power for the last 20 20 years knows that our grid was not up to scuff. Um, needed massive investments, massive improvements. Um, and you're seeing that happen right now. You're seeing a level of focus on transmission, on uh interstate transmission in particular, so you can get power from one part of the country to other parts where it's needed. You're seeing investments in transistors. you're seeing in batteries, you're seeing this in solar, you're seeing in wind. So, I'm most excited about the grid as the technology and the set of technologies that are going to get a lot of investments from the buildout of AI related infrastructure. And then of course there's a lot of stuff there's a lot of other investments happening too when it comes to the AI infrastructure buildout. There's data centers, there's chips, but from an energy perspective, this is really a story about energy addition. And for me, it's about what connects the source of demand and the use of demand, and that is the grid. >> And I think a lot of that conversation, too, is is weighing on Americans, weighing on voters perhaps of ahead of the midterm elections. And we heard from governors like New Jersey Governor saying that there are several actions being taken about a $25 uh credit to New Jersey residents, but it doesn't seem like that's really resonating enough. It's not enough when Americans right now are seeing their energy bills just cost so much more compared to last year. So what's your argument there and how is this trinkling down to the everyday person? >> Well, it's the biggest constraint right now for the AI buildout is power and the biggest constraint I would argue for power is that there is a lot of public opposition to building and to the nimism is very significant right now. And so what I would say to investors is that yes, there is a lot of opposition to data center and data center development, but that opposition can be over overrun. In other words, there is a way to deal with the data center backlash. And Brooke, the main way to deal with the backlash is to bring power prices down. And the way main way to bring power prices down is permitting reform. And I've been writing about this for years that the only way that the US will have the power that is needed not just for data centers but for the electrification of our economy for electric vehicles for air conditioning is if we have major reform to our permitting system. And I must say I'm quite hopeful that we're going to see that in the next few weeks out of Congress because both parties understand uh what's needed. So the bottom line is power prices need to come down. They need to come down for the public to be supportive of data center development. And the only way to do that in my humble opinion is you have to increase the supply of power. And that will only happen if you have significant policy intervention. And the bipartisan bill that's working its way through Congress is our best shot of that in years. >> And again, at the same time, we are experiencing a an energy crisis. You could say oil prices are skyrocketing. We just heard of another attack on an Aramco uh facility in Saudi Arabia. And yet at the same time, you say that this energy system has been resilient. Walk us through that case as we're hearing so many conflicts still occurring and so much uncertainty within geopolitics right now. >> The energy system has been resilient because there has been a set of interventions by governments around the world, the likes of which we haven't seen maybe ever. um what you saw with from China in in terms of their strategic intervention in the global oil markets. That probably is the main reason why oil is not at $150 a barrel but rather at $110 a barrel. You've seen governments around the world become a lot more efficient. You've seen governments around the world use all of their inventories and their stock piles. So there's been a very positive set of interventions, Brooke, over the last se six, seven months since the Iran war started, but it can't go on forever. And that's the bottom line. If the war in Iran is going to continue and if the straight of Hormuz remains effectively shut, then oil prices will go up and it'll be very painful for the world and it'll be much more painful outside the US than it is inside the US. And so my view is that the administration is going to try to end this war as quickly as they can. They've been trying to do this for a long time. Um, and over the next several months, you will see energy prices come down once again. >> What does that timeline for recovery look like? This has been a war that has gone on since the end of February, and many are worried that in order to replenish supply that we once had, it could take a long time. >> Probably years, to be honest. Probably years. And along the way, you're going to see a lot of transformations in energy. You're going to see a lot more deployment of lowcarbon energy. By the way, that is for many countries a way of becoming more energy secure is actually to go down the path of energy transition. You're going to see a lot more energy efficiency along the way because governments are going to try to figure out all the different ways they can run their economies with less energy input. Um, you're going to see a changing of the routes of energy shipments and energy transportation. Um, I think in 5 to 10 years we're going to be talking a lot less about the straight of Hormuza as a choke point. Um, and I think the West has completely realized that right now. Uh but Brooke to answer your question, this is going to take some time and that's why the next the next couple of years are going to be a period of major evolution of the global energy system. It's going to be very exciting and I can just tell you as someone who talks to investors all day, I have never seen investors allocating capital to such a broad swath of energy solutions. you know, everything from natural gas to and CCS to solar to batteries to geothermal to fusion and SMR technologies. And so what you're going to see in this period of transition, of this period of of frankly of an inflection point in the global economy, you're going to see a lot of things tested and I think when we're having this conversation 5 years from now, the energy system is going to look very different than it does today. >> Anak Shaw, thanks for breaking it all down. Lots of headlines to follow and appreciate your time and also I'm excited to follow along this journey with you. Thank you so much. >> Thank you very much. Take care. >> Of course. And coming up we take a deep dive into a little known unit in BlackBerry's business that could be a key to the company's future. That and much more on Market Domination Next. Heat. Heat. Hey. Heat. Heat. Heat. Heat. Down. Down. Heat. Heat. BlackBerry may be best known for smartphones with keyboard. boards, but its software business QNX is helping give the company a new life. Joining me now is the president of QNX, John Wall. John, thanks for being with us because I want to learn more about this software technology. It's used within millions of cars. Can you break down exactly how it works? >> Yeah, absolutely. So, we build what we call foundational software. So, the easiest analogy that I can come up with is think about Mac OS, think about Windows on your PC. We build something similar but for mission critical applications. We are the interface between the chip the hardware uh and the application software. Now what makes QNX unique is that we're designed for mission critical applications. So we're designed where functional safety is paramount for instance in a car controlling steering braking etc. Or in oil and gas if we're controlling the pitch of a turbine blade. Uh so we have all these safety and security uh certificates that make us appropriate for those markets >> and for everyday users. I mean collision warner warning uh blind spot notifications, pedestrians coming. It seems like that's all under your umbrella. This is technology that really didn't even exist in my especially in my 2009 Jeep Liberty that I used to have. So it's evolving quite fast. How are you adapting new technology as it comes out? >> Yeah. So what we focus on so we focus very horizontally across all market segments where missionritical life critical etc are important and what we try to do is we really focus on extracting the maximum performance of the next generation hardware. You know chips are getting more and more powerful. You're starting to see what I would say cloud level performance of chips within embedded systems. Our job is to make sure that if our customers are paying a lot of money for these chips, that they're getting maximum performance from those chips so that they can run more and more applications that are important to their to their products. In in the case of a car, you named a few, but more levels of autonomy, more safety features, you know, even more entertainment features within the vehicle, uh, while maintaining safety and while maintaining the highest level of security. How large is the current backlog for this sort of software and how large is the addressable market? What do you have ahead of you? >> Well, I mean the addressable market really varies depending on what we're talking about. Right now, we announced yesterday that our backlog is $1.2 billion. So, that is made up of royalties. So, when we ship a when a car ships and our product is on that car, we get paid a royalty and that's basically 100% margin. So, the backlog is all royalty. So these are programs that are coming that we will be drawing from over the years. I think what's interesting is that what we're seeing in the industry is our backlog increased by 250 million just in the first 6 months of this year. And what it's showing is that the softwaredefined era of the vehicle is accelerating. The car makers uh believe that this is a differentiator for them and their vehicles, a very important differentiator. And so a lot of effort is going into this. So you know we've seen things like 30 billion 40 billion as a TAM for this. Uh what we are seeing and the interesting thing is we're just at the beginning right now because if you if you look at the software that that or the cars that are software targets it's maybe 30% of the cars that are being shipped uh worldwide. What we're going to see over the next five years is that more and more of these cars a trickle down effect that we see in in automotive that more and more of these cars will have this type of software. >> And John, it's not just cars. There are other ways that you were leaning in. I mean, we're talking about physical AI, robots, industrial automation, medical devices, even aerospace and defense. So, what are the opportunities there and what could that look like over the next few years? Yeah, th those opportunities are huge and that's why I'm so excited about it that you know a lot of people think about automotive as this slow industry uh that doesn't adapt quickly. Uh the reality of it is automotive was tip of the spear for for software very very complex device consumer device but that has you know very complex architecture. uh what we're seeing in robotics uh what we're seeing industrial automation we're seeing the same properties that that made us successful in automotive they're now a requirement in those industries as well you're you're starting to see more and more high performance compute like I talked about cloud compute you're getting these very powerful chips in industrial automation in robotics requires the same type of software as we've been doing for automotive safe secure deterministic uh so we think the opportunity is huge and and you know we've partnered with Nvidia uh we have a partnership with Nvidia in automotive where their self-driving stack is based on QX and now they've basically taken that and adapting it for robotics and again QX is the foundation of that stack as well. So we're we're super excited about the future in the non-automotive side of the business. John, to back this up, you are under the umbrella of BlackBerry. For an investor, a shareholder who's watching this interview right now, what is the key metric that they should be watching out for? What's a goal down the p pipeline that they need to know right now? >> Yeah, I think one is obviously the backlog. How how quickly the backlog is is is growing and how much we're consuming of that backlog year-over-year. Uh I think they also should be looking at the design wins. So we've announced alloy core which is where we're starting to build more of a platform as a part as opposed to pieces. You know today we ship an operating system and some components car maker can take that put other components together. We've partnered with some industry partners. We built the platform out raising the ASP of our product. So they should be looking at announcements of design wins. We already announced a design win with Cura which is a joint venture between Daimler Trucks and Volvo Trucks in Europe. Uh we hope to have a couple more announcements, but these dramatically increased the ASP. A big part of why our backlog grew significantly uh over the last six months was the Cortura design win. >> John, lots to watch in the business. Excited to follow along in the journey and appreciate you taking the time to share more. Thanks so much. >> My pleasure. Thank you. >> And coming up, we have you covered through the closing bell on Wall Street. But first, check out my new social series. It is called Out here because some of the best business stories, well, they aren't always the ones making the headlines. We go on the ground where they happen. From hidden history to the people and moments shaping business today. One of the most iconic ceilings in New York City actually nearly got bulldozed for an office tower. And hundreds of thousands of locals and tourists probably have no idea. We're at one of the most famous train stations in New York City between 42nd and Park Avenue. This is Grand Central Station. In 1968, the owners had a plan. gut the concourse, bulldozed the roof, and built a 51story building right through the top of it. But the plan was blocked by NYC Landmarks commissioners and shut down for good by the Supreme Court a decade later. Had the building gone up, it would have cost about $1.4 billion to make it happen in today's money. And if that tower was still standing today, it would be worth around $2 to3 billion. At least that's how much the Medlife building next door is worth, which used to be the Panaman building. From afar, many people think that the MetLife building is right on top of Grand Central. It's actually next door. Grand Central's landmark status ultimately means that this train station is untouchable. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Stocks ending the day higher as investors await those key earnings report. We're just moments away from hearing from Meta and Tesla G finances. Jared Blickery with me now. Jared, we're seeing a pretty broad-based rally as we make our way towards the close. We saw some fluctuations within oil as we made our way towards the close because of a hit to a a Ramco uh facility within uh the Middle East. What can you tell us there? What sort of implications did that have? Let's go to the charts because that did look like it affected a stock slump late in the day. But I'll tell you what. So, here we go. Got that Aramco news somewhere. And I'm trying to draw this, but that you can see that little dip. Oh, whoa. What's going on there? That little dip at the end of the chart and we did recover in the Dow to the highs of the day. NASDAQ didn't quite get up to those highs, but you can still see the S&P 500, very similar chart. We're looking at gains of uh 1% in the NASDAQ, about 710 in the Dow, and half a percent in the S&P 500. I'll show you crude oil real quickly because it's come back down since then. So, you can see on the day netn net or at least since uh midnight, it is down just fractionally. There is that little spike right there. So, uh maybe a little bit overblown, but we can see that there was a market reaction and seem even more pronounced in stocks. But let's get to the sector action real quickly because tech was leading again today. It's been on again, off again. It was on again today. So, excuse me. Here we go. So, tech is up 1.7% thereabouts. Industrials also outperforming. And you can see in the red today, that was XLC. That's guess what? That's uh that's Meta. That's Alphabet. We'll go to the NASDAQ 100 screen real quickly because we do have those meta earnings coming out. So, this was mainly an Alphabet story. You can see Google in the lower left here. I'm going to circle it. That was down about 1.6%. Guess what was up 7% after earnings? That was SpaceX. So, nice day for Elon Musk around about $160. Remember the opening price way back when on IPO day was $150. And uh Tesla ahead of earnings cuz we got those coming out momentarily, too. That was up 3.4%. So, uh a nice day for semiconductors. Like I said, it's been on again, off again for tech. Happens to be on again today. AMD is up 3%. Western Digital close to four. Lentum up about three. And in software, we have some outsized winners too. Palanteer up almost 5%, IBM almost four, Crowd Strike over five. So, tech really pulling its weight there. And uh we can even see in the leaders here, number one, guess what? ARK, that's the Arc Innovation Fund. So, small tech jumping. Oh, and I almost forgot crypto. Here's Bitcoin up 2.1%. Had a nice jump today, uh up to 80 almost 85,000. You take a look at the year-to- date, you can see still kind of just trying to stay above that uh prior ceiling level. Could be a launch. We'll have to see, but the technicals look kind of favorable there. Haven't seen much movement yet, but uh we'll have to see what the the new days bring. >> Yeah, and Jared, as of this moment, we are getting some breaking news from Meta. The company just reporting their latest earnings report. And what we're largely seeing here is the company sees a Q4 revenue of 73 to76 billion as far as our outlook goes. That was mostly in line as expectations. We had estimates for the next quarter to bring in revenue of nearly 74 billion and we are seeing shares climb in after hours trading. You could see that stock up nearly three and a half% as we once again are digesting these earnings report. The company did confirm that they do plan to introduce new non voting stock. The company also seeing Q4 revenue or rather thirdarter revenue coming in at $64.6 billion just above Wall Street's expectations of 63 billion. We also did have a beat on the bottom line earn uh earnings per share coming in at $383 compared to estimates of $357. The stock once again moving in after hours trading up now more than 4%. Jared, >> yeah, let's take a look at their guidance here. fourth CE fourth quarter revenue guiding now 73 to 76 billion estimate was for about 73.5 billion so that's a nice beat there a lot of times the guidance is going to count more in terms of the stock pop or miss more than uh what actually happened in the rearview mirror uh one of the things I'm going to be looking for on the call is more statements about what's going on with Muse cuz if we go to the charts there and I'm going to bring up I'm going to show some aftermarket quotes on the NASDAQ 100 board where we can see Meta let's see if those pull up Um, we're not seeing the after hours quotes just yet. There we go. Meta up 4 and a.5%. This is a one-year chart. And so, as you can see, it's been trading sideways for the most part, but we did get a nice lift off of the Muse news. I think that was September 9th. And we are up about 15% from the net net. We're up 20% over here. Take a look at the last three years. And you can see it's been nothing going on for the last two years. We just tested the highs, but you know, we get some favorable news. Uh we I'm not an investor in Meta, but if they do get some favorable news on the AI front and not just today, but going forward, that could be the catalyst. Otherwise, uh some disappointing news, maybe go back down and test 600 or even that support line below. >> And I do want to get to some expectations around uh capex spending. Of course, all these major hyperscalers spending so much money on the buildout of AI. Meta does see fullear capex spending to come between 135 billion to 145 billion. expectations were between 130 to$145 billion. So this kind of in line with that at the higher end of the range somewhat. And so it's also important to watch out as we continue to think about total expenses. They did see that on the higher range between 175 billion to 179 billion. That was above Wall Street's expectations. But we're also watching Reality Labs. Still a loss there, but less than expected at 4 billion versus expectations for 5 billion. And also they said that mostly um as well their family of apps operating income did also come in at 17 billion versus 23 billion. Of course like Jared mentioned expectations will be waiting to be heard about what exactly Muse did to this quarter as largely a late introduction. >> Yeah. And you know I are we allowed to talk about Tesla earnings here too? >> All right let's do this. Yeah. Tesla also coming out right now. >> Cool. because I am looking at uh third quarter adjusted EPS 48 versus estimates of 44 cents. They're looking at third quarter free cash flow 1.53 billion. That is a huge be because it was estimated to be negative almost 5 billion. That's a story right there. I think that's going to be grabbing a lot of headlines. I'm going to go over there's a bunch of other uh numbers to go over. I'm looking at the NASDAQ 100 board on the Wi-Fi Interactive and it looks like Tesla's up 1.8% in aftermarket. uh trading here and you can see that on your screen. So I'm going to go by some uh I'm going to do some segment uh revenue here. Services and other revenue 4.6 versus 4.3 billion. Automotive revenue 20.5 billion versus estimates of 19.8 billion. So that's a nice beat right there. Gross margin beating 19.6 versus estimates of 17.8%. And uh third quarter negative free cash flow was 4.73 billion versus estimate of 4.99 billion. And so that was a little bit less uh than uh feared. And uh how does that reconcile with uh let's see Tesla third quarter. Anyway, uh let's go up the line here. We got uh full service driving uh attach rate reaching over 75% in North America. That's a statistic that's been climbing. And uh we also have third quarter operating income 718 million a beat versus 599 million. And here's a statement. highest ever order rate for energy storage business. That includes the wall and some of those other uh energy installations. They have a mega factory planned in Texas with a capacity of 50 gigawatts or gigawatts depending on how you want to pronounce it. And they say the production has already begun for Tesla. Uh semifactory in Nevada. Uh third quarter energy generation storage revenue 2.89 billion. The estimate was for 3.9 billion. So, uh, a little bit of a disappointment there, but looks like in most of these numbers, they are beating consensus. And, uh, here's here's one more. Quarter end largest backlog for passenger vehicles in four years. So, we'll see if that plays up. Uh, but these are just headline numbers. We got to dig through the reports, of course. >> Yeah, absolutely. And just to just unpack that even further, right now we are seeing Tesla shares pop just a bit up 1.6% as we make our way into further leaning into this report. We did see a beat for Tesla on both the top and bottom line. Revenue coming in at 28 billion dollars compared to estimates of 28.13 billion. So just mostly in line there. Adjust in earnings also beating coming in at 48 cents versus expectations of 44 cents. But I think the big question that so many on the street are wondering is what we might hear about the potential acquisition by SpaceX. >> Oh yeah, that's going to be a big one. Also on that negative free cash flow number, I'm seeing some conflicting numbers, so don't take my word at that. We got to dig into the report, but uh uh like I said on most of these numbers, it looks like a pretty good beat so far. >> Yeah, it seems like investors really liking this beat about top bottom line. We'll have to dive more into it. Jared Blickery, >> thank you. >> Thanks so much. Let's turn now to a deeper dive into this Meta report. The company beating about the top and bottom line. Gila, DAD Davidson, head of technology research. I would love to dive into this report with you. First, I would love to hear your reaction to Meadows report this afternoon. >> The company is doing very well. The revenue is still growing at far faster than the market, right? This is a company in the ad market is gaining share from Google and the expenses are a little bit more under control. They didn't increase those much. They didn't increase capex much. They told us they were going to control losses in reality labs. That's what what investors wanted to see from these financials. Now, we are going to need to ask them how many of these new non- voting shares they're going to issue. How dilutive is that issuance going to be? And then, as you were discussing earlier, the key to this call is what's going on with Muse. How successful is it? Is there going to continue to be growth there? Uh, are you going to monetize it through advertising? What are the what are the goals? 10 million is fun for a lot of companies, but it's a company that has 3.6 billion users. So, can you grow it to that scale? A lot of the conversation is going to be there. There's also going to be some conversation about the enterprise AI plans that that they set in motion when they hire the CEO of MongoDB. So, those are the things we're looking for. >> At the same time, the company, it seems like they're not providing fiscal year revenue outlook for 2027. What does that tell you here? Because we're hearing a fourth quarter coming in total revenue expectations to be in the range of 73 to 76 billion. What does this outlook tell you right now? They did make some commentary about expecting growth to be still very healthy. I think what they're really careful about right now is not to guide the capex that's too high into to operating expenses that are too high. They'll wait till January to do that. Uh right now they want to make sure that uh that the investors see the upward trends in revenue, some discipline around expenses. That's the opposite of what happened three months ago when they reported expenses got out of control, revenue decelerated. So this quarter, they're writing the ship that way. Investors should be happy with that. We're going to have to wait three months possibly to get what the 2027 guidance is. >> Okay. And this past quarter, I mean, we saw some temporary lift when it comes to the ad business. Think about it. The World Cup, we also now we're heading into the midterm elections. AI alone, all these companies looking to get out there. And in their report, they actually said that their AI investments are already delivering substantial incremental advertising revenue. How important is this ad business right now for Meta and how much more can it grow? >> Well, right now it's the source of uh more than all of their profit because they're losing still money in AI. They're losing money in reality lab. So, they make more than all their profits selling advertising. And what they've been able to do, especially over the last couple of years, is use the progress in AI in order to do better targeting of ads so they can sell more better ads at a higher price. And that's been the main driver of uh revenue growth and revenue acceleration over the last couple of years. Again, that's how they've pulled away significantly from Google and the digital ad market is they've gotten so good at targeting those ads on those social media platforms, maintaining growth in the 20s when Google is still in the low teens. >> And Gail Mark Zuckerberg not shying away from the opportunity to mention news. If you're taking a look at their uh press release on their website, he said in the first line, we hit major milestones this quarter delivering personal super intelligence for everyone, including the launch of Muse. Will Muse be the differentiator and ultimately per uh propel Meta as an AI competitor here? >> Right now, it acts to crystallize Mr. Zuckerberg's vision for having a personal assistant based on AI. But realistically speaking, we're going to see more successful personal assistants from Google, from Apple, from Open AI. Those are coming. Realistically speaking, again, Muse doesn't do anything Chad GPT or Claude or Gemini can't do. It's just a better user interface with some better harnesses and tools. Those companies are paying attention. They'll also have those. But we will also uh see this product category grow very fast. So the fact that Muse has a head start should play in their favor and and again that's what investors will want to hear about the rate of growth, the plans for expansion, the road map to try to maintain that lead that they have right now. At the same time, we're hearing about some new recent hires at the company, including from MongoDB. They recently hired the president and CEO there. What does that tell you about how important this buildout is for the company? >> That means they intend to serve enterprise AI on a very large scale. I think they've built a tremendous amount of comput that they're actually not entirely utilizing. They have some idle compute and what they're thinking about doing is providing it to enterprises which would be a new business for them. It couldn't pit them directly with the three large hyperscalers, Amazon, Microsoft, and Google. And that's the other thing we're going to want to hear more details about. Up until now, again, it's been amorphous, but once they hired uh uh CJ side, that tells us they are serious about building this business and they have a lot of compute capacity to provide. We want to see if they intend to go head-to-head with the big three or they have another angle that they're going to pursue. >> The company also announcing that they plan to establish new non voting class C common stock. What exactly does that tell you about this moment in time? What do you make of the fact that they're issuing more shares to fund this buildout within AI? >> Yeah, they need a lot of capital. They're not going to borrow a lot of it. They're they're going to borrow some. They're going to use special purpose vehicles, which is offbalance sheet arrangements they have with the likes of Blue Ale, etc. That's been severe that's been somewhat criticized. Uh, but they also are going to need to issue some equity. They need a lot of capital. If they're going to do 135 145 billion of capex this year, it's pretty clear Mr. Zuckerberg intends to put even more into the ground next year. He's not going to have the cash flow to support it. So, we're going to have to raise capital, both debt and equity. At the same time, Gil, Meta has faced numerous legal challenges, including today, we heard from a New Mexico judge ordering Meta to pay $2 billion for deceiving users about its data privacy practices. We also heard recently about allegations uh uh for uh mental health impact and they had to pay a legal fine there. What exactly does that mean for Meta moving forward? >> The risk to Meta is really that they have to make changes to the product. Uh they were pretty close. the attorney general's that that suit that they recently settled were actually asking for some extreme changes to the product would have been very detrimental to Meta. That's why Meta settled to get away from those very serious remedies and that's the main thing Meta is going to have to avoid because in terms of the financial impact that number seems high but uh they're going to appeal it. It's going to take a while. They'll negotiate it down. They'll settle. It'll take a long time. And in the context of a $2 trillion company, by the time they end up paying something, it's actually not going to be that material. >> When you're listening to the call this afternoon, what do you think is the biggest question on the table for Mark Zuckerberg? >> The road map for use, the road map for enterprise AI, and is the growth in advertising sustainable and more hints into what capex is going to be next year. So, I think those are be the questions that come up a lot. And Gail, just to quickly follow up on that, how sustainable do you think Muse is right now? Because you mentioned these this competition that could grow from Google, from Apple. >> I would expect it to be uh an also run by the time it's all said and done. They have distribution, but so does Google. So does Apple. And those two also have an operating system. So they're in a better position to capture the consumer. And again, Open AI will participate here. They have the more powerful models. They just have to figure out the user experience to be competitive with Muse. And you better believe all three of those companies and others such as Amazon and and Anthropic are thinking the same thing. >> Meta popping in after hours up 3%. Giller, thanks so much for joining us. Help us break down. >> Thank you. >> Coming up, the earnings are not over. We'll dive into Tesla's latest results next. Don't go anywhere. Heat. Heat. N. Tesla third quarter earnings crossing the wire moments ago. For more on the reaction, we're bringing in Seth Goldstein, senior equity analyst at Morning Star. Seth, thanks for joining us. First, would love to get your reaction to this report this afternoon. >> Well, I think the big surprise was positive free cash flow. $1.5 billion in positive free cash flow versus consensus estimates according to facts that a little over $4 billion in negative free cash flow was was the estimate. And I want to hear from Tesla about, you know, what if their capex is still going to be at least 25 billion. But in the numbers right now, it was a very strong quarter. Tesla's able to add to their cash balance versus deplete it, which is what the consensus thought going into the quarter. Other notable things from the report, Robosaxi continues to grow. We know that, but nearly at 2 million miles right now of unsupervised. We have uh Optimus is in production. So, we're seeing front we're seeing positive movements in Tesla's shift to real world AI of uh autonomous driving and humanoid robots. At the same time, we did see automotive revenue move lower. So, what does that tell you there? >> Well, if you remember a year ago, the third quarter was a big push in the US to buy EVs and to get ahead of the expiring EV tax credit and and that did lead to automotive deliveries down 2% year-over-year for Tesla. So, I did I was not surprised to see lower revenue, but I think the good news is we're seeing greater adoption of full self-driving that that saw over 250,000 new subscriptions during the quarter. And I think that's going to be the driver of delivery volumes going forward. So, very tough comp. Not surprised to see revenue down, but I do expect to see revenue growth in the coming quarters as we go forward. >> Yeah, full uh full self-service driving uh definitely caught me by surprise as well. It's now reaching over 75% of new vehicle deliveries in North America. They called it their most mature market North America being. So what does that tell you about the momentum there? Do is it moving as fast as maybe you had thought? It is. It tells me that this is a differentiator for Tesla. I think it's why we're seeing Tesla sales down less than 10% year-over-year in North America or in the US while we're seeing nearly every other EV maker with sales down 20 to 30% or more. I think that shows that a lot of US consumers are considering Tesla due to the full self-driving due to the technological advantage. We're seeing a big uptick in Europe as well, especially as we're seeing more and more European countries and jurisdictions approve FSD and now there's over a 100,000 subscriptions in Europe. That's likely to grow as well. And I think that's really going to be a differentiator for Tesla in those two key markets going forward. I want to talk a little bit more about the opportunity behind robo taxis because it seems as though they're launching in three new cities in in Florida. Uh they also are are rolling out multiple different ways as well. They said in particular that they began deployment of cyber cab into their robo taxi fleet within Austin. walk us through how exactly those two missions, Cyber Cab, you also have robo taxis somewhat playing together to to really it seems like drive performance even further than maybe we initially thought moving into the year. >> Yeah. And and I think cyber cab is going to be the vast majority of vehicles in the robo taxi fleet going forward. And it's going to allow Tesla to offer a much cheaper service because it's going to be a lower cost versus using the Model Y. And so Tesla's aim is to make sure its software works safely. And so they're going a little slow, but they launched the Cyber Cab widely throughout Austin, Texas, planning to go to Dallas, Texas for the second city, and they're scaling up the numbers in those cities first. So, I think it's going to be a slow expansion, but if we look year over year, we're going to see Tesla continue to enter new cities and largely do so through the cyber cap versus what they did last year, which is putting the Model Y in cities, which I think can offer a lower price and, you know, still still let Tesla grow their market share over time. >> The company saying here when you think about everyone's calling it SI now, SI Compute, super intelligence compute. They said they plan to reach a total comb 400 by the end of the year supporting the development of both vehicle and humanoid robot autonomy software. It seems like that Optimus robotics especially within California we're announcing an early ramp up of that. What's the momentum behind that? And what does that tell you that now we're in the early innings? It seems like within that Fremont facility they're seeing high volume lines the the release had said. >> Yeah. You know, I I think a big reason why Tesla's free castle was going to be negative this year was so that they could invest in the infrastructure and the manufacturing facilities to support their transition to their real world AI products, autonomous driving and humanoid robots. So, we are seeing Optimus production ramp up. That that's progress. We're seeing them ensure they have enough compute power to continue to train their models and have enough ability to run the latest software, continue to make updates for both the driving and the robot software. And I think this will allow Tesla to quickly scale up uh robot production and training and make it a useful product from, you know, what was just a concept even just a year or two ago. >> Seth, you cannot talk about Tesla without talking about what we heard on this SpaceX call yesterday. Take a listen. This is definitely a kind of question where I feel like I'm tap dancing through a minefield. So both SpaceX and Tesla have formed special committees to discuss this idea um at the request of shareholders and uh now these special committees are uh consist of of independent uh independent directors and because I'm a conflicted party I can't actually be in the discussions of the special committees. I think some people out there assume that a SpaceX and Tesla merger is is a certainty and I I think that would be overstating it. Uh the uh you know do do I think it would be a good idea? Yes. >> Okay, Seth, if you were on that special committee, what are the top questions you were asking right now? >> Well, from the Tesla side, it's all about valuation. You know, SpaceX is still relatively new from a multiple standpoint. It even makes Tesla look normal. And Tesla's historically traded at much higher multiples than even many of its tech stock peers. And so for Tesla shareholders, it's all about what's the valuation. You stuck by Musk. You believe in the transition to its real world AI products. Make sure that you can get the value for Tesla. And we see Tesla shares are still currently over 20% below the all-time high of nearly $500. So, I would expect Tesla's board members and shareholders to to want a premium to the current price. Whether that sets them equal to SpaceX or somewhere around there, I think they want to get full value for the Tesla investment and and that would be one of the the big concerns from the Tesla side. >> Seth, from your perspective, what could a deal price even look like? Well, if if you're Elon Musk, you certainly have voting control with the vast majority of shares from from the SpaceX side. So, if Elon wants a deal to happen, he can make it move forward uh from the SpaceX side. From the Tesla side, I think maybe you're looking at something like a 50/50, even maybe 50.1% so Tesla gets the majority of the combined company. Remember, they're also coming in with a stronger balance sheet. And if you look a year or so out into the future, SpaceX may need to line up additional funding to to uh build out their AI infrastructure. And so, you know, I think from the Tesla side, you're bringing in a stronger balance sheet, positive free cash flow. You're bringing in also tangible pro progress on your real world AI products that can potentially ramp up and scale sooner. So, that might be worth more of a premium. And if SpaceX remains the controlling entity, even if you give Tesla shareholders 50 51%, Elon Musk still maintains over a 50% control of the company, which lets him run the show and make sure he can carry out the strategy as he sees fit. >> In the release, Seth, they have TBD, Roadster, design development. You can't help but think about what many saw over the weekend. this that you can see on your screen, essentially this flying car, this flying vehicle that so many people have been waiting to see. What does that tell you about the business and what could even be the timeline in this TBD within the presentation this afternoon? >> Well, at the event, Elon said 2028, and he sounded pretty sure about it. Now, you know, Elon will also say he's pretty bad at predicting timelines. And so, we could see the Roadster get pushed back into 2029 or even a little bit later. But the good news is there's a prototype out. There's been an event. They're taking reservations. And so, we are seeing progress on the Roadster. It's not a next year or in the future thing. And now we might not see the flying version be able to be sold to the public, but I would still imagine the car could do 0 to 60 in less than a second like we did see during the demo. And so for car enthusiasts who want to take a really cool sports car to a track and drive it around, I think they'll still have a good time and we could see the Roadster 2028 2029. >> And Elon Musk even teasing the idea of people coming and trying it on the track. Seth, thanks so much for breaking down the results with us. Appreciate your time. Coming up, healthcare open enrollment. Well, it's right around the corner, guys. And we'll dive into a key health benefit many don't really know about. That's next on Market Domination over time. Heat. Hey, Heat. Heat. Heat. Heat. Heat. Down. Down. Heat. Heat. November is the peak of healthcare open enrollment season. And some of you may not know that there are add-on benefits that you can have with your health insurance called flex spending and health spending accounts, also known as FSAs and HSAs. Our next guest founded a marketplace that helps consumers make the most of these account. Join me now is Justin Mayor's True Med CEO. Justin, thanks for being with us. It feels like when you're scrolling on social media admittedly all you hear about is this triple tax advantage. So break down what exactly that is. >> Yeah. So HSAs are the most tax advantaged account that exists in the country today. So what that means triple tax advantage is you can put in money taxree that money can compound taxree and then eventually if you take it out for a healthcare related spend uh you can do that taxree as well. Now many Americans are sort of thinking like okay what exactly is the benefit of of enrolling with it within my maybe workplace insurance or my own insurance. So eventually what is the exact benefit there besides this tax advantage? >> Yeah I mean the the big benefit is that you can put aside money that can compound and you put aside money taxree allow it to compound and you can use it on healthcare spend. This effectively brings down the cost of medical expenses and healthcare costs which is currently today the number one cause of bankruptcy in the country. and you saw this very niche opportunity within that. So what was the opportunity that you saw? >> Yeah, so there is a lot of conversation around food is medicine, health, you know, exercise is medicine, things like this. And what we saw is that there exists a pro like a provision in the ex tax code that creates HSAs that says if you have a doctor that connects an intervention like a gym membership to a condition like you might have like high cholesterol or heart disease, they can write you something called a letter of medical necessity that allows you to spend your HSA or FSA dollars on a gym membership, a pelaton on number of things that studies show can treat or prevent many chronic conditions that Americans struggle with. How big of a concern right now is that people are worried ultimately that they're going to end up wasting their dollars? Is there like a certain month or window that you see people spending the most? >> Yeah. So, this is one of the confusing things about HSAs and FSAs. HSAs, you can put them in, they never expire. You can invest them. They can just like sit there forever. FSAs are the bucket of funds that expire. You have to basically select either October, November, uh, how much you're going to put into an FSA account the following year. And if you don't spend them by the end of the year, basically they expire at the end of the year. And so you see a tremendous amount of spending happen at the end of the year between December 15th and December 31st as a lot of people's FSA dollars expire. >> Now we see on the screen right here there are some examples of how exactly you could use True Med to take advantage of this money you might have left over or more intentionally plan to use those dollars on the website. So how exactly does this work? How does how does someone use take advantage of this? >> Yeah. So, uh, individuals that want to use their pre-tax dollars, like HSA and FSA dollars, can go to true.com. They can look at many of the products and services that TrueMed works with. And if they have a qualifying condition like obesity, high cholesterol, hypertension, family history of heart disease, sleep apnnea, things like this, there's a number of products and services on the True Ben marketplace that they will be eligible to spend their HSA, FSA dollars on. >> What are you noticing right now within this trend? because it feels like with the rise of GLP1s, with the rise of perhaps people just weighing in more on GLP1's, what exactly is behind this demand that we're seeing right now? Because it seems like the health and wellness market is really hitting a stride. >> Yeah, it's it's exploding and but I think it's I think it makes sense. If you look today, America spends more on healthcare and we have some of the worst outcomes in the developed world. Like the average American is sick. they have one or more chronic conditions, you know, they're overweight, uh, you know, and will die statistically of heart disease, cancer, or, you know, some sort of chronic related condition. And so, I think Americans are are renewedly focusing on the fact that they need to take their health into their own hands. They and that we it's existential that we as a country solve things like obesity, heart disease, cancer. And there's a ton of evidence that effective lifestyle interventions like exercise, cleaning up your diet, sleeping better, just the basics are incredibly effective at preventing these diseases. I feel like sometimes I have like a bunch of things in front of me and I'm trying to figure out where to do and what to do. And you actually pointed out recently that people are using Muse to try to take the most advantage. Of course, that's Meta's new chatbot. So, how are people using that? >> Yeah, it's it's a great question. So, the the thing with Muse is that if you if you qualify to use your HSA funds on something like a Pelaton or a supplement or red light therapy or whatever that >> red light therapy even, >> yeah, red light therapy you can use HSA. It's hot right now. It's very very hot right now. Uh, but it it is literally the cheapest way that you can buy any number of these products using pre-tax funds that give you a 30 to 40% effective discount. And so Muse and other like chat bots like this are aware and they're like, "Okay, if you tell me to get the lowest price on this product, I'm going to be using your HSA or FSA funds." And so we're starting to see an increasing amount of like AI traffic coming to our website as people are like, "Hey, you know, Muse, buy me this thing in the cheapest way possible." >> And now you have done a lot in the past decade. We were talking a little bit before, but you're also the founder of Kettle and Fire, the bone broth company. You're chairman of that company as well. I mean, how much of an opportunity is this health and wellness market? And how do you go from organic bone broth to a marketplace for healthcare spending? >> It's it's a tremendous opportunity. Like I think if you look just at the numbers, healthcare is the number one. It's the largest category of spend in the country, almost 20% of GDP. Uh a lot of that is because again, as I said, Americans are sick. And so if you can do anything to put Americans back on a path towards being healthy, uh to get them to invest in prevention to drive better health outcomes, that is like there are good businesses to be built in this space around making Americans healthy. >> I think it might be inspiring a lot of people to think about how how they can build out a business behind this. Justin, thanks so much for joining us on set. I appreciate it. Wishing you the best luck. Excited to follow along on the journey. Appreciate it. And coming up, we dive into a bit of the retail industry history next on Market Domination Overtime. Heat. Heat. Heat. Heat. Heat. Heat. On the latest episode of Power Players, Yahoo Finance Executive Editor Brian Sazy sat with Concello partner and vice chair Mindy Gman. They discussed her storied career in retail and fashion. Let's listen. I'd been working for Tommy Hilfiger, who I adore is still a close friend. And it was when he was a rocket ship, when Silas and Lawrence came in with Tommy and Joel and acquired the company and I kept getting a phone call, would I go and be the president of Chaps Ralph Lauren? And I go, I'm in this great place. I'm not. Finally they called and said would you just meet with Ralph and his partner Peter Stro at the time and I said you know yes I will and I went and I met with them and Ralph is very convincing and inspiring and I said you know what there's not a single woman who has run a men's wear company not one and I know how to turn this business around. I want to be a CEO. I know I could do this. So, I decided to take the role. I knew that, you know, it was a division of Warico and Linda was a very unique boss, but I said, I know I can do this. And when I took over the company, it was doing about $20 million losing money. And in three years, it was doing $200 million, making a lot of IBITA. >> And I had gotten promoted to not only being the president of CHAPS, but I was running the entire men's wear portfolio at the company. But after 3 years, my contract was up. I came home one night. I said to my husband, "I'm resigning tomorrow. I don't have another job, but I know I'm doing the right thing because the values of the company do not align with my values. And if I stay, I'm basically complicit. And this is not who I am and what I want. And I went in the next morning and I went to resign and she said to me, "Uh, are you resigning?" I said, "Yes." And she said, "You either have another job, you're independently wealthy, or you're stupid." And I said, "Or D, none of the above." And I was escorted out by security that afternoon. And there I was standing on Park Avenue between 37 38th. I said, 'I know I made the right decision for me.' And the next day, Ralph and Peter called me, said, 'Look, we're devastated you were leaving. Look at what you did to the business, but if you're going to work anywhere, we want you to come work for us. We're not even sure of the role. We're going to make you the head of new business development for Ralph Lauren, and we want you to work on potential new business opportunities. And so I made the decision to go and I spent a year looking at a lot of different things and ended up writing the business plan for Polo Jeans Company. Found the license and then they asked if I would go be the CEO and start it up which I did. And I like to say I now have such respect for entrepreneurs because I know how hard it is to do a startup and I didn't have to worry about raising capital, right? >> Yeah. >> And we went from zero to almost what $500 million in a period of less than five years. We were potentially planning to take the company public. And >> how do you do that? How do you go from like nothing to $500 million in sales? Like what's what's the tactic? >> Well, look, the good news is this is a loved and beloved brand, right? So, the key was really how to focus on significant differentiation within the denim category and sportsware category as a whole. And how did we literally go to the roots of the brand? If you think about it, it's what Michelle Gas is doing at Levis's today. What really makes it Ralph Lauren, but is going to differentiate itself? How can it be accessibly aspirational, right? How could it be marketed in a way that people want to be part of it? And that's what we were able to do. And we assembled an incredible team, most of which I'm still have a relationship with to this day, and who've gone on and done a lot of great things. We built unbelievable instore experiences. You know, I even remember one thing. We were the first people. We actually did a polo jeans like vending machine in the shops for all our caps. Like things that were not being done and it was incredibly exciting. >> I'm going to work backwards. So Michael Rubin at Fanatics founder Oprah Ralph Lauren, Tommy Hilfiger, Barry Diller. I'm sure I'm missing a few folks. how these are like iconic iconic leaders. How have you how do you gain the trust of folks like this? >> So, I think it's a couple of things because I've always worked for visionary founders. I've I've learned so much about what truly makes them unique and as you know, they're all very different. But the part that's real and true and why they've been successful is the part that's authentic and real and true and they're able to block out the noise of another shiny penny and they've stayed true to what they stand for and what their brands and businesses have stood for. And I've taken so much of that and I like to say that it's made me what I call an entrepreneur. >> Um even though I wasn't the founder, right? That's my philosophy in business when I've gone in whether it's to transform a business or turn around a business or start a business. I've taken those learnings which have given me the bravery or you would sometimes to do the things to take the risks to be able to move forward but it's the been the focus. >> Coming up we break down the top headlines to watch on Wall Street. That's next. Stay tuned. time now for what to watch on Thursday, October 22nd. It is another busy day of earnings, believe it or not. We're going to start with Proctor and Gamble, the consumer goods giant reporting quarterly earnings. Analysts expecting organic sales to rise up to 2% with beauty and home care leading the way, but higher supply chain costs will they're expected to weigh on profits. The company has warned those costs could take a billion dollar bite out of its profits this fiscal year. Next up, Spotify, the streaming app, reporting third quarter results. Analysts expecting the music streaming giant to deliver steady growth with Outlook calling for 5 million new premium subscribers and 11 million additional monthly active users. Just have to watch out for that one. Turning now to Comcast where competition in the broadband business remains a major challenge. Pricing from fiber and wireless rivals is putting pressure on customers revenue. Analysts anticipating broadband subscriber losses to approach 167,000 similar to last quarter. And finally, we'll get a bit of a pulse on the labor force with weekly initial jobless claims. Economists forecasting claims to tick up slightly to 200,000, giving us more insight into the health of the job market, especially ahead of that key Fed meeting. And that is a wrap on today's show. We'll see you guys again tomorrow. Thanks so much for watching. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Down. Heat. Heat. Down.