CoreWeave’s Debt Reckoning, Meta’s AI Strategy and Big Tech Earnings

Akash Pasricha (0:13)

Welcome, everyone, to The Information's TITV. My name is Akash Pasricha. It is Tuesday, October 20th, and we have won a Signal Award. Folks, we got the news this morning. We won gold for the most innovative video podcast. We are thrilled. And I want to thank you for voting for us and supporting the show. We've got so much more to come, so much more that is in store. We're excited to tell you more about it. We got to get to today's show.

Today on the show, big tech earnings are starting up. Meta reports tomorrow. Google, Microsoft and Amazon report next week. We are going to preview all of those results for you this morning. We're also going to talk to the founder of Inspired Capital about their new $450 million early stage fund. We're then going to talk with the CEO of Daytona, an AI agents infrastructure company that just reached unicorn status. To close out the show, we're going to take a look at why CoreWeave's debt has raised more questions on the financing side of the AI build-out. It's going to be a great show, so let's get right on to it.

Big tech earnings are starting up this week. Today, we've got Netflix reporting after the bell, Meta reports tomorrow, which will kick off the Hyperscaler results. Yes, I am calling Meta a Hyperscaler. We've got Google, Microsoft, and Amazon reporting next week. I want to bring on Dan Flax, Senior Research Analyst at Neuberger for a preview of what we should expect. Dan, welcome to the show. It's great to have you back.

Dan Flax (1:47)

Great to be with you, Akash, as always.

Akash Pasricha (1:49)

Okay, so I want to start with Meta, which I am calling the most interesting company in the tech sector right now. I'm going to be closely listening to Zuckerberg's comments tomorrow.

What are you going to be watching for with Meta, Dan?

Dan Flax (2:06)

What we're looking for is the health of the core digital advertising business, and I think they're executing well there. Of course, what we're trying to get a little more insight in is around their strategy with Muse and the broader agentic strategy. It's very, very early, but the engagement with Muse and really the potential, as we think about the months and the year ahead, is quite significant. The key here really is to be able to add value to the users on one side and, of course, deliver value to the advertisers and small businesses on the other side. And so we're looking for a little bit more insight into how that's progressing and, of course, ensuring that the core business remains healthy and we expect strong growth in Q3, the balance of the year, and into 2027

Akash Pasricha (2:53)

I was reflecting earlier this morning on just how crazy a quarter it's been for Meta because it was literally just last quarter that Zuckerberg was teasing the coding agent that they were about to release, they released it and then we had mused the personal agent as well. Do you think that we'll get any kind of a sense of the revenue impact from these products at all? Is it too soon for that?

Dan Flax (3:22)

I think it's a bit early for that. What we're focused on is the technology roadmap. What we're seeing is that the company has stepped up the pace of the model launches, the performance is improving with each generation.

The key from there is really to take these models and infuse them into the products. I think with Muse and what follows, the goal is really to drive engagement, to drive users to use these tools and these agents more. Over time, I think there'll be a revenue impact. But if I pull it all together, if they're able to drive the engagement and the history of the company, if I look at Core Facebook or Instagram or WhatsApp is strong, if they can continue that with the agentic era, then I think it sets up well for revenue contributions from these newer areas. But again, that will take time.

Akash Pasricha (4:19)

Right.

I wonder, Dan, have you done any modeling on your team as to when these, and I say this knowing that AI has very much helped the core advertising business accelerate, and even if they didn't do anything in the coding or the personal agent side, AI is doing wonders for them. But have you done any modeling as to when you think these personalized AI tools or enterprise tools could lift total revenue? When can we expect that?

Dan Flax (4:48)

I think what we'll see is in the core digital advertising business, you're going to see an improved experience and that will manifest itself in incremental advertising dollars over the course of 2027 In terms of the newer revenue streams, I think that will take several quarters given the size of this company at $300 billion in revenue. It will take a little bit of time for that to show up. But where I think we may see some of it is in incremental revenue streams with enterprise, with small, medium business customers. They've made a number of hires to try and build out an enterprise business. And I think we could see more signs of that and a little bit of revenue later next year and more so in 2028 For right now, the key is to really lay the foundation for the strategy. And I think if we see signs later next year of incremental dollars in newer areas, that bodes well for the company and the stock as well.