The AI Debate Gets More Complicated: Microsoft Has a Win, Meta Stumbles | The Weekly Wrap

**SPEAKER_1** (0:01)
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**Steve Eisman** (0:26)
Investors have displayed their nervousness by selling tech stocks and all AI related plays. That is why Nasdaq is down 7 percent from its all-time high. So many companies reported this week. PayPal, company reported numbers that once again show the problems plaguing the payment sector. Microsoft had a good quarter. I would not characterize Meta's quarter as a good one. It was quite bad. Starbucks has been a turnaround story that finally looks like it's working. Apple was disappointing. Amazon was strong. Migrating from thinking that AI is all positive to AI is all negative is a pretty short emotional road to take. The story is moving too quickly. But here is where I think we are now.
Hi, this is Steve Eisman and this is another episode of The Weekly Wrap. This is for the week ending Friday, July 31st, but recorded Thursday night, July 30th. By the way, I have a cold. The best way to support The Real Eisman Playbook is to subscribe to Substack and to YouTube. Subscriptions are free and we appreciate your support. The link to join for free is in the description. I just want to flag something that's coming up on Premium. On Wednesday, August 5th, we will release an interview with filmmaker and producer Peter Hoffman. Peter has been involved in the making of iconic films like Terminator 2 and Basic Instinct. We discussed the arc of his career and how the business has changed from old school film production to the current world of streaming. The link for Premium is in the description. On this week's wrap, we will cover number one, Charter, number two, The War in Iran, number three, The Fed Meeting, number four, The AI Debate in more detail, number five, a huge week of earnings, and six, One Mail Pack. Before we get started, let me discuss Charter. The company reported last week, and bottom line, I give up.
Simply put, I made a mistake. I recommended the stock in January on a thesis that the stock was insanely cheap and fundamentals would get better. When the company reported fourth quarter numbers, it looked like fundamentals would get better as the pace of broadband losses improved. Unfortunately, when the company reported one Q26, the pace of broadband losses deteriorated and the second quarter saw more deterioration again with 172,000 broadband losses, which was unfortunately much worse than expected. Management stated that the worst is over and the company paid down some debt, which is important. However, at this point, I'm skeptical. Despite its cheap valuation, this stock is problematic until the broadband story gets better. Two really bad quarters in a row is enough for me. I'm selling. If the fundamentals ever turn, I could come back to this stock, but I hate thesis creep, and continuing to own the stock just because it's cheap, and it is cheap, would be thesis creep. Ironically, the stock is higher than when the company reported. On Friday of last week, the stock closed at $123, a 52-week low. By this Thursday night, the stock had climbed 15% to 142
However, the rally in the stock in my view has nothing to do with Charter. At least for this week, investors are reallocating out of AI-related plays, and that is benefiting Charter's stock price. I want to emphasize that I have not yet sold my position. I recommended the stock to my viewers, and I strongly believe that I should not sell until I inform my viewers of my opinion change. I will be selling the stock next week. With respect to Iran, there was a lull over the weekend, but that seems to be over. Iran struck US bases, and the US retaliated. Oil prices climbed above $90.
The Fed met this week, and kept rates unchanged. However, partially because of the recent jump in oil prices, some investors are afraid that the Fed is behind the curve. So on Wednesday, the market experienced something of a correction, and the 10-year is hovering dangerously close to 4.7%.
Also, before we get to this week's news and earnings reports, I want to re-examine something I said last week about AI, that the terms of debate have changed. I strongly believe that this is so.