Prof G Markets: Productive Congress, Social Media Earnings, Crypto Floor, and Cloud

This week on Prof G Markets, Scott discusses the market implications of a surprisingly productive week in Congress, parses the deeper meaning of social media’s mixed earnings season (hint: it’s TikTok), and ponders whether we’ve hit bottom in certain volatile equity sectors. Plus a deep dive on the most potent value creation engine of the era: cloud. Productive Congress https://www.cnbc.com/2022/07/28/china-competitiveness-and-chip-bill-passes-house-goes-to-biden.html https://www.bloomberg.com/news/articles/2022-07-27/what-s-in-the-manchin-schumer-tax-climate-and-energy-agreement?utm_source=google&utm_medium=bd&cmpId=google Social Media Earnings https://www.reuters.com/technology/google-parent-alphabet-posts-higher-quarterly-revenue-2022-07-26/ Crypto Floor? https://www.bloomberg.com/news/articles/2022-07-30/crypto-wallet-maker-ledger-seeks-new-funding-at-higher-valuation#xj4y7vzkg Cloud https://www.pcmag.com/how-to/what-is-cloud-computing Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Scott Galloway?

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• 0:49Speaker 01

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:18Scott Galloway?

  This week's number, 17%. Chipotle's Q2 revenues increase year-on-year was 17% driven not by volume, but by price increases. Although I think I took volume up 3% just individually. People make fun of my cargo pants until they want a Phillips screwdriver or a pulled pork burrito bowl. Then the dogs' cargo pants come in handy. Chipotle is inflation-proof. Why? Because it's an essential, bitches.

• 1:56Scott Galloway?

  Welcome to Prof G Markets. Today, after a quick look at the headlines, we'll be discussing our take on Q2 earnings, what the numbers in streaming and crypto might be telling us, and we'll take a deep dive into the cloud business. Caroline, what's in the news? Another young person rolling through Prof G Media. Caroline, give us the insight from the Gen Z millennial entitled "Work From Home" generation.

• 2:21Speaker 02

  I am, in fact, the last millennial, 1996.

• 2:25Scott Galloway?

  Nice.

• 2:25Speaker 02

  Okay, so the headline news is the Fed raised interest rates, and it's the second month in a row that it has increased rates by three quarters of a percentage point. As we know, this is an attempt to rein in inflation. We also got the official word that the economy did, in fact, contract in Q2. GDP fell at an annual rate of 0.9%. That's the second quarter in a row that the economy shrank, which is a common indicator of a recession. Jerome Powell does not believe that the US is in a recession. Here's a clip of what he said during the press conference last week.

• 3:00Speaker 03

  I do not think the US is currently in a recession. And the reason is there are just too many areas of the economy that are performing, you know, too well. And of course, I would point to the labor market.

• 3:15Speaker 02

  Scott, any takeaways?

• 3:17Scott Galloway?

  Technically, the definition of a recession is two consecutive quarters of GDP contractions. Most economists say that we are technically in a recession. The thing that makes me believe we might not go into a full-fledged recession is, and this is anecdotal evidence, I am just blown away. My kids are staying with me right now in New York City. You know, the terrible thing about that is I have to do things with them, Caroline. Just by the way, never have kids. Just don't, don't have kids. Anyways, everything I do with them. There was a line, there's a line around the block to get in the Museum of Ice Cream, the Nike Adidas stores, lines, on running, lines, Stussy. It's amazing. If you walk around a city right now, and I think that's true of almost any city, it's just very hard to imagine we're going into a recession. Unemployment is at a 50-year low at 3.6%.

• 4:02Scott Galloway?

  There are supposedly three job openings for every one person looking for a job. And wage growth was up 5.2% in the second quarter. Now, keep in mind, and this is why we hate inflation, when inflation clocks in at 8.1% and wage growth goes up 5.2%, that roughly means that your life's getting 3% worse because you're not making as much money as shit is costing. This will go down as one of the great unknowns at this point, and that is, are we going into a real full-blown recession or not? Because there's a ton of indicators in each direction. This is definitely going to be a random walk here.

• 4:37Speaker 02

  We'll definitely be keeping tabs on this. Let's move on. Russia cut its natural gas supply to 20% capacity in Europe, and that's on top of surging demand for energy due to recent heat waves. This has driven natural gas prices in Europe to five times what they were this time last year.

• 4:56Speaker 02

  Obviously, a lot of this flows from Europe's response to Putin's invasion of Ukraine. Do you think Europe will hold the line on sanctions and support Ukraine? Or are these energy prices going to be too much to handle?

• 5:09Scott Galloway?

  Well, first off, the EU deserves a lot of applause, commendation, praise, because for the first time, Europe is a union. This invasion of Ukraine, and I think this was a huge miscalculation on Putin's part, has unified Europe. Now, unfortunately, it's hitting them the hardest because they've developed a crack-like addiction and interdependence on Russian energy. Historically, about half of EU-imported gas is from Russia, or I think it's about 40%. If Germany has to totally wean itself off of Russian energy, you're talking about a guaranteed recession there. Europe's already fragile. June inflation was 9.6% year-over-year. The Kremlin said they're trying their best, which is total bullshit. They will leverage their position.

• 5:53Scott Galloway?

  Russia's core competence, as it always has been, is the willingness of the populace to endure suffering. And Putin knows this. We thought for sure that their integration economically into Europe would make them less bellicose, and we were wrong. And who is hurting the most is Europe, and specifically, Germany. But again, let me finish where we started. Europe has shown that they are a unified continent. There is a European Union.

• 6:21Speaker 02

  Well, heading over to where it's not so unified, the US, the Biden administration has seen some big wins over the past week. Two major pieces of legislation look like they're going to pass before Congress goes on vacation in August. We mentioned one of them on the show last week, the $280 billion Chips in Science Act of 2022. The other big bill focuses on climate change. It's a $360 billion climate and tax package that's expected to raise hundreds of billions of dollars in tax revenue to help fight climate change and reduce the deficit. What's your take when Congress passes these big, multi-billion dollar bills? Will these spur economic growth, or will we just see more cronyism?

• 7:05Scott Galloway?

  I love this bill, and climate change is important. This elimination of inversions should create about $300 billion in additional revenue that we can apply towards the deficit or towards the cost of these climate change initiatives. Especially the bill is going to cut greenhouse gas emissions by 40% and get to below 2005 levels. I still think one of the misconceptions in our society is that two kids in a dorm at MIT are going to come up with some new, new technology, that we can all buy the stock and get rich and solve climate change. No, we have made trillions of dollars pulling shit and liquid out of the earth, and 90% of the buildings and things that have been constructed around you or the things delivered to you are a function of fossil fuels.

• 7:47Scott Galloway?

  Nothing has been the gift that keeps on giving economically as fossil fuels. And what do you know, when you have that sort of economic prosperity, you're going to have externalities. And we are seeing the mother of all externalities, based on a century of prosperity from fossil fuels in the form of climate change. I think this is great legislation. There's always cronyism. There's always shit put in there that you'd rather not see in there, but the key to governance is compromise. And I think this is great, and I'm very excited about this.

• 8:18Speaker 02

  All right, that's a wrap on headlines. Let's bust into it. Earning season is well underway and I'd like to get your thoughts on a few Q2 results. Companies that we've been keeping tabs on, including Snap, Twitter, Meta and Google have all reported and the results go from pretty terrible to, well, okay. So let's take a look. Alphabet's second quarter profits were 16 billion, down from 18 and a half billion last year. The core Google search business remained strong, but YouTube revenue was up just 5%, which is below analysts' expectations of 7% growth. Over at Twitter, advertising revenue increased just 2% year-over-year, below analysts' expectations, even though

• 8:59Speaker 02

  its monthly active users increased 17%. Meta posted its third consecutive quarter of declining profits. And finally, Snap, which seems to be the platform that can't catch a break, even though their revenue increased 13% year-over-year, it still managed to lose more than $400 million.

• 9:19Scott Galloway?

  The Meta one, what really stood out, or what was the kind of the seminal moment in this earnings season, was that Meta, for the first time in its history, made less money in this quarter than it did in the same quarter last year. We've never seen that. And it marks sort of a mature company and arguably a company in decline. Now, if you're the CEO of a company and you have a business that's maturing and you recognize that it's maturing, the right strategy is you take the profits from that mature business and you start plowing them into another business that will become your growth engine. Essentially, every company does this, or every smart company does this. Amazon and Google and Microsoft, I would argue that their massive investments in their cloud offering has created an entirely

• 10:00Scott Galloway?

  new business line that is driving growth. Google is still losing a lot of money on their cloud efforts, but Amazon has a growth engine that is wildly profitable and Microsoft is huge in the cloud, too. Now, what does Meta do? Okay, Facebook and maybe even Instagram are beginning to mature. We need a new growth engine. I know, let's go into the Metaverse. Clunk, thud, faceplant. This shit is not working. It's just not working.

• 10:27Scott Galloway?

  And we're seeing that they no longer have that growth engine and at the exact wrong time, it looks as if we're having a bit of an advertising recession. Specifically, the earnings and revenues for all these ad-dependent digital marketers is either kind of anemic or down. Google still grew, but Snap literally shit the bet. Snap's stock is down 80% year-to-date. Meta's 53%, Google 22%, Twitter down 8% versus the S and P down at 16%. And Twitter is really an anomaly here because of you-know-who. But if you look at Twitter's numbers, they grew their user base by 16%. But their revenues were down 1%, meaning their ARPU has taken it on the chin. What is ARPU? Average Revenue Per User.

• 11:11Scott Galloway?

  So in sum, they're not able to monetize their traffic and their users to the same extent they were this quarter last year.

• 11:18Speaker 02

  Is this a general advertising slowdown or are there other factors at play?

• 11:22Scott Galloway?

  What is really going on here? Every digital marketer, from Meta to Snap to Twitter and even Google, is having earnings calls that are meh to, oh my god, that's awful. Why? Why? Because what Netflix did to Hollywood and what Amazon did to retail, TikTok is doing to digital marketers in the United States. That is the thing sucking the oxygen out of the air here. Everyone talks about recession, but I think the thing that is really hurting this entire sector right now is TikTok. So is this a forward-looking indicator of a recession when advertising goes down? Maybe. Advertising is easier to cut than employee costs or projects or infrastructure expenditures. However, I would be interested in knowing if you included TikTok's revenue increases if we're really in an advertising recession.

• 12:09Scott Galloway?

  So speaking of TikTok, it's projected to do $12 billion this year. That's three times, 200% increase in 2021 revenue. So these guys are flat or up 16%. TikTok up 200%. So that's $8 billion that's got to come out of the ecosystem because advertisers aren't spending more. They're just taking money out of Snap, Pinterest, Twitter and Meta. What's behind those revenues? Usage. Generally speaking, attention translates to monetization over the medium and long term.

• 12:38Scott Galloway?

  Snap users spend about six hours a month on the visual platform. Instagram, eight hours. Facebook, 16 hours. Okay, now get this, get this. TikTok, Caroline, 29 hours. That's just fricking insane. We have a billion people spending on average 29 hours. That's 29 billion. Take a 40-hour work week, I'm trying to do this in my head. What is that, 700 million years? Person years of work? I mean, being spent on TikTok. This thing is staggering. And we're seeing the entire digital marketing ecosystem melt under the sun of TikTok.

• 13:15Speaker 02

  All right, let's move on to some volatile markets. Streaming and crypto. Netflix, as we know, has been hit pretty hard this year. Between January and June, the stock fell more than 70%. But its shares actually started to gain momentum after the company released better-than-expected earnings in July. Disney shares also started to pick back up again. The stock hit a low of 92 bucks a share a couple of weeks ago, but has since climbed to over $100 per share. Even crypto, which we've been pretty critical of, is finally starting to see some positive news. After several months of declining prices, Bitcoin and Ethereum have both rallied. Scott, I'm curious if you think it's possible that these volatile markets have hit the floor?

• 14:00Scott Galloway?

  The honest answer is I don't know. Although it does feel as if a floor has been set on Bitcoin. Also Netflix, I think a decent argument was that it was oversold. It's still the original gangster and still by a decent margin, the biggest streaming network. I think they have about 230 million consumers. I think they have tremendous margin power. I know I'd spend a lot more for Netflix than I think just cleaning up the password sharing. By some estimates, half the people that use Netflix aren't paying for it. But I think they're going to start tightening that up. The ad-supported product from Netflix, I think it's a bad idea. I think core to the Netflix brand is uninterrupted storytelling. Having said that, what I have seen is it appears that subscription-driven media has been over-invested. Now, what do I mean by that? And how do I come to that conclusion?

• 14:46Scott Galloway?

  Everyone has fallen in love with subscriptions. I've been preaching about it for 10 years. A dollar of subscription revenue is worth somewhere between $2 and $3 from advertising revenue. So as a result, everyone is trying to launch subscription-based services. And the amount of money, the amount of capital, both financial and creative capital that's gone into streaming, has been unprecedented. So what happens in any market when it becomes overinvested? The returns go down. So when you have $220 billion globally and $140 billion domestically being spent on original content for subscription streaming services, what you have is a suppression in returns. And we've seen that. See above, Netflix down 72%.

• 15:25Speaker 02

  Are any of these streamers worth investing in?

• 15:28Scott Galloway?

  The streamers, I would argue, have probably been oversold. Disney's way down. Netflix is way down. Netflix, for the first time, is a potential acquisition target for a Amazon, or a Microsoft, or maybe an Apple. That would raise a lot of antitrust concerns. But again, it's not whether it's a great company. It's not its growth. Well, actually, it is whether it's a great company and its growth. But this is all set against valuation. And if you like Netflix six months ago, well, guess what? It's on sale for 70% off. So I haven't looked at the numbers, but I think Disney especially feels like a good value right now. And if you look at Warner Brothers Discovery, it's been hammered pretty hard. And again, they have just unparalleled assets.

• 16:09Scott Galloway?

  HBO, the Warner Brothers franchise, even Discovery, you could argue, Shark Week. Shark Week, that's gotta be worth a couple billion dollars. To see little seals basking on the beach, and little do they know what waits for them out in the dark murky waters of death. By the way, I'm such a badass, they named a week after me. Dog Week. Dog Week. On Monday, erectile dysfunction. On Tuesday, edibles. On Wednesday, anger and depression. Okay, Caroline. Anyways, what's next? I'm lost. Where am I?

• 16:41Speaker 02

  Given how bullish you are on the podcast space, especially seeing how you host quite a number of shows, are there any investment opportunities in the audio space that you're seeing?

• 16:52Scott Galloway?

  To resist is futile. We're everywhere. We're like AOL when they started sticking those goddamn discs in its cereal boxes. Anyways, first off, I think podcasting is about to go from 1.4 billion to 4 billion in the next three years, so it's growing really fast. Podcasting is the mother of all kind of winner take all, and that is the top 200 podcasts probably account for 98% of revenue, and there's 2 million, meaning you have to be in the top, not 0.1%, you have to be in the top 0.01%. The majority of podcasts are passion projects, delusional that they're ever going to make any money. So your question, how do you make money? The only place I can really figure is a direct play is probably Spotify, who's gotten much bigger in podcasts. They do a really good job distributing podcasts.

• 17:37Scott Galloway?

  It's a very sortable platform. When we left Spotify, we overnight lost about 12% of our downloads, which really hurt. So I'd say Spotify, the company we work for or distribute through Vox, is a private company, so you don't get to invest there. So there really aren't a lot of ways to play podcasts. Let's talk about crypto. Has a floor been set? I don't know, but it definitely feels like one has been set in Bitcoin. I think it hit $18,000. It's up substantially since then. ETH has really ripped up, off 80% since its low. You're going to start seeing people talking about percentage up from its lows versus percentage down from its 52-week high. There is an optimistic sign here. Personally, the only investment I have in crypto is with a cold storage hardware wallet called Ledger.

• 18:22Scott Galloway?

  On Monday, Ledger released 10,000 Market Pass NFTs that will grant priority access to their new marketplace platform. And what happened? All 10,000 were sold out within 24 hours on OpenSea, generating $4.2 million in sales. This was the greatest volume of any NFT collection. So what does this say to me? That for all the criticism and all the rhetoric about NFTs were a scam and going to zero, that's clearly not true. There's still clearly a lot of interest. I'm a big fan of NFTs. Why? I believe that signaling is increasingly moving online. How do you signal online?

• 18:59Scott Galloway?

  With a drunk ape, or a Chanel logo, or my kids buy skins on Fortnite. There's an entire generation of people that are comfortable with spending money on digital goods. So NFTs, the rumors of their death have been greatly exaggerated.

• 19:14Speaker 02

  Do you think you're ever going to invest in a cryptocurrency?

• 19:16Scott Galloway?

  I'm a no-coiner. I love fundamentals. With tokens, there's no underlying cash flows. There's no rights to the intellectual property or assets of a company. So I have a difficult time valuing these things, other than looking at their trading history. Oh, Bitcoin hit $68,000, now it's at $20,000. I do think Bitcoin has utility, is a store of value. But I just never have the confidence to buy something without having some sort of valuation benchmark or fundamentals that I can construct and say, okay, relative to its peer group, based on its growth, its margins, its cash flows, I think it's expensive, inexpensive, fairly priced. None of that is here. So I just don't have the confidence to invest in these things.

• 19:59Speaker 02

  Yeah, I wish I had that same intel, because I've lost pretty much everything I've invested in crypto. Thanks for that, Scott. We'll be right back after this break with more of the latest markets news.

• 20:14Scott Galloway?

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• 20:59Scott Galloway?

  You can download the Bilt app and join the membership for where you live at joinbilt.com/propg. That's J-O-I-N-B-I-L-T.com/propg. Use our link so they know we sent you.

• 21:14Scott Galloway?

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• 21:57Scott Galloway?

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• 22:26Speaker 02

  Welcome back to Prof G Markets. Amazon, Microsoft, and Google all announced earnings this week, and every announcement included a comment about their cloud business units. Amazon and Microsoft are now generating $100 billion annually. At Google, cloud revenue is poised to surpass revenue from YouTube. All three are growing at 30% or more per year. So we wanted to know, what exactly is the cloud business? Why is it growing so fast? And why are these three very different companies so dominant in this space? That's the subject of this week's deep dive with our editor-in-chief, Jason Stavers.

• 23:03Speaker 05

  For a good definition of cloud computing, let's start with how Amazon itself describes the business.

• 23:10Speaker 06

  Cloud computing is the on-demand delivery of IT resources via the internet with pay-as-you-go pricing. Instead of buying, owning, and maintaining physical data centers and servers,

• 23:23Speaker 06

  You can access technology services such as computing power, storage and databases on an as-needed basis from a cloud provider like Amazon Web Services.

• 23:32Speaker 05

  That's the basic idea. Instead of owning and operating your own data center, you let the cloud company do it for you. But there's something critical in that description I want to highlight. Cloud computing is not renting computers or even space in someone else's data center. It's renting technology services. The customer simply says, "I need to store some data. I need to run some analyses." It's up to the cloud provider to provision sufficient space and computing power to deliver that service. And since customer needs vary day by day, even minute by minute, the cloud provider can efficiently deploy its hardware to whichever customer needs it at that moment. And not just its hardware. There are a number of economies of scale because the cloud provider can invest in

• 24:16Speaker 05

  security, in redundancy, and other common needs across its entire customer base. So cloud services are an obvious fit for corporate computing needs like inventory management or HR. But cloud computing is now also being used for all kinds of computing tasks. For example, NASA uses Amazon's cloud to store and analyze the data that it gets from its Perseverance Mars mission. And cloud computing powers a lot of the consumer services we are familiar with. Spotify uses Google's cloud services to host and distribute its audio streams. Fortnite runs on Amazon's cloud. And LinkedIn, not surprisingly, runs on Microsoft's.

• 24:55Speaker 02

  Is it mainly economies of scale that give cloud computing the edge over owning your own computer infrastructure?

• 25:02Speaker 05

  That has historically been true and a big part of the reason that cloud became so popular. It's an easier, more efficient way to obtain computing services. But there are also two underlying shifts in the technology ecosystem that are fast making cloud the only option for the majority of computing applications. Behind the scenes of modern computing is a huge array of tools that we don't see but are essential to the services we use. So, for example, a service like Twitter uses literally dozens of different software packages and systems for storing tweets, creating the timeline, serving ads, storing user data. And increasingly, the developers of those products are designing them to be cloud-native. So if you want to use the latest analytical algorithms, the latest security services,

• 25:47Speaker 05

  and other cutting-edge tech, you have to be in the cloud. The other thing that's happening is that more and more software is being delivered, not as a software package at all, but through a model called software as a service, which means the software runs in the cloud and users access it either through a web browser or through a simple app. So Gmail and Google Docs are really good examples of this model, but so is Slack and Zoom and all of our social media products. Dozens of companies are using the flexibility of the cloud to sell their software not as a packaged piece of software that you buy and put on your own computers, but simply as a service you access through your browser. So some of the largest players in this space, like Facebook and Salesforce, they still run their own data centers.

• 26:31Speaker 05

  Facebook has huge data centers, so does Salesforce. But new entrants increasingly don't bother to do that. They don't need the capital investment, they just rely on the big three cloud providers. And even the big giants, including Facebook and Salesforce, are starting to shift more of their own computing needs over to third-party cloud providers.

• 26:49Speaker 02

  It looks like Amazon, Microsoft, and Google dominate this business. How have they taken such a large share?

• 26:56Speaker 05

  In the US and Europe, they are nearly the only players in the market. In Asia, especially in China, Alibaba and Huawei have significant share, but otherwise, it's the big three. And the short answer to how they've done that is money. It takes billions of dollars to build and maintain these huge data centers, and there just aren't that many companies with the capital to do it. Amazon and Google have the additional advantage of being in data-intensive businesses already. Both of their cloud businesses are built on the back of internal capabilities that they've turned around and sold to customers. There are some pretty significant differences between the three, however. Amazon was the first to make a serious move into this space, and from the beginning, its service has been geared towards technically-inclined buyers, Silicon Valley startups and

• 27:41Speaker 05

  other tech companies with deep internal engineering capabilities. And also, Amazon has continued to invest in their business. They've actually gone so far as to develop their own custom chips that run its data center servers. Microsoft has come along and established itself in a strong second place to Amazon, but it's built its business differently. It's focused on corporate America, where it already has deep relationships. And it's made sure that its services are easier to use and that they integrate easily with Windows and Microsoft's other software packages. So both Amazon and Microsoft, their cloud businesses are highly profitable. Google is the odd one out here. It has the smallest cloud business of the three at only $6 billion in revenue for the

• 28:23Speaker 05

  most recent quarter, and it loses several billion dollars a year. Now, Google claims that these losses are simply the result of investing in a growing business. And internally, it's told its teams that it expects Google Cloud to be profitable by the end of the year. But the truth is that while Google pioneered a lot of the advanced technology that's used to run these massive data centers, it has failed to convert that leadership into a cloud service that has the same general purpose capabilities as its two competitors. And so it's been forced to compete on price. Its largest customers are companies that are biased towards lower margin data storage. So its largest customers are Apple, TikTok, and Spotify, which all store hundreds of

• 29:04Speaker 05

  petabytes of data on Google services, but don't use it for a lot of the same compute applications that Microsoft and Amazon customers do.

• 29:12Speaker 02

  Scott, you've been saying for a while that Amazon's cloud business could become the most valuable company in the world. What do you think the future holds for these cloud companies?

• 29:20Scott Galloway?

  Well, simply put, the future is bright, and AWS, I believe, will be the most valuable company in the world when it's spun as an independent company, or that the FTC demands that it be spun. So there's a lot of growth here. Cloud has been growing at 35% per year and is projected to continue growing at 20% to 30%. Also, as you can imagine, the margins are great. COVID was real wind in their sails, whether it's watching Netflix or work from home. All of these things require additional cloud computing. So when you think about it, the operating system for all computing is the cloud. There's also additional growth sectors within the cloud. In addition, in our economy, our creativity around applications for data, our consumption of data have always outpaced the supply. This was the gangster move.

• 30:05Scott Galloway?

  I would argue Microsoft and Amazon, absolutely, and probably over time, Google made the right call by reinvesting cash flows from their maturing businesses into the cloud. And this business is big enough to support the growth that these companies and their stock prices demand. If you think about the three businesses these big tech companies need to go into because they're so huge, it's one automobile, big business, used to be low margin, now it's a big business, it's higher margin, mostly because of Tesla. Two, healthcare, fortune, $20 billion business, we're going to see Amazon go into that, we're already seeing them go into that. And then finally, cloud, an enormous business, and all three are already in that. What is the big thud here?

• 30:47Scott Galloway?

  What is probably the biggest strategic misstep of the last five years was Meta deciding that the new growth engine would be the Metaverse. No, it's not. Doesn't matter what the name of your company is, this is not working.

• 30:59Speaker 02

  All right, let's take a look at the week ahead. From a macroeconomic perspective, it's all about the labor market this week. New job and job quits on Tuesday, jobless claims on Thursday, and labor force participation on Friday. Earnings season continues, and we'll hear from Activision, Starbucks, PayPal, Airbnb, Toyota, Moderna, and CVS. Scott, any predictions for the week?

• 31:22Scott Galloway?

  My prediction is we're going to continue to see earnings beat. So about 20% of the S&P has reported earnings so far this quarter, and on average, about two-thirds of them have beat earnings. I think recession fears appear to be so far a bit overblown. I think we're also going to see increased activity over the next several months in the online health market. With the acquisition of One Medical, Amazon is not just attacking, but breaching.

• 31:48Scott Galloway?

  I think essentially this is the starting gun that's just been fired. Amazon's acquisition of One Health. That's it for Prof G Markets. We're all meeting as a team tonight. I think it's important that you articulate a mission. Our mission is to help young people be more economically and emotionally viable. It's important in a capitalist society to be economically viable such that you can focus on the things that matter, and that is deep and meaningful relationships. We hope you are achieving that. I am off to Zero Bond where I will drink Makers and Ginger and celebrate that I've been able to aggregate a bunch of young people that are more talented than me and wallow in my douchiness with other douches at a members' club in Soho. Yay for the dog. We'll see you next week.

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