Meta and Tesla Earnings Unpacked | Pivot
Kara Swisher (host), Scott Galloway (host)
In this episode of Pivot, featuring Kara Swisher and Scott Galloway, Meta and Tesla Earnings Unpacked | Pivot explores meta Surges, Tesla Stumbles: AI Bets, Hype, And Hard Numbers The discussion contrasts Meta’s strong Q1 financial performance and aggressive pivot into AI with Tesla’s sharp profit decline and narrative pivot to AI and robotics. Kara Swisher and Scott Galloway argue that Meta, like Microsoft, is wisely reallocating resources from the metaverse to AI despite unclear monetization, while its core ad and video business continues to dominate. They highlight Meta’s successful shift into video, the likely boost from a potential TikTok ban, and the broader trend of big tech’s outsized returns on AI investment. In contrast, Tesla is portrayed as an auto company facing intensifying competition, overvaluation, service issues, and an overreliance on Elon Musk’s futuristic promises about autonomy and robotics.
Meta Surges, Tesla Stumbles: AI Bets, Hype, And Hard Numbers
The discussion contrasts Meta’s strong Q1 financial performance and aggressive pivot into AI with Tesla’s sharp profit decline and narrative pivot to AI and robotics. Kara Swisher and Scott Galloway argue that Meta, like Microsoft, is wisely reallocating resources from the metaverse to AI despite unclear monetization, while its core ad and video business continues to dominate. They highlight Meta’s successful shift into video, the likely boost from a potential TikTok ban, and the broader trend of big tech’s outsized returns on AI investment. In contrast, Tesla is portrayed as an auto company facing intensifying competition, overvaluation, service issues, and an overreliance on Elon Musk’s futuristic promises about autonomy and robotics.
Key Takeaways
Meta must invest heavily in AI despite unclear near-term revenue.
Swisher and Galloway contend that, like Microsoft’s early AI bets, Meta’s massive AI spending is strategically unavoidable if it wants to own the next computing platform, even though concrete business models are still emerging.
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Meta’s core ad and video business is thriving and funding its bets.
With revenue up 27% and net income more than doubling, plus over 60% of time on Facebook and Instagram now spent on video, Meta’s current businesses provide the cash flow and market dominance needed to bankroll AI infrastructure.
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Meta’s pivot from VR/metaverse to AI is seen as course correction, not retreat.
The hosts, who previously mocked the metaverse push, now view Zuckerberg’s reallocation of resources toward AI as a rational response to where value and investor expectations are clearly moving.
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Tesla’s fundamentals resemble a pressured auto company more than a tech leader.
With profits down 55% and revenue down 9%, plus increasing competition—especially from China—Tesla’s core car business is weakening, and its multiple looks stretched compared to both big tech and traditional automakers.
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Elon Musk’s AI and robotics narrative may be more distraction than delivery.
The show frames Musk’s emphasis on GPUs, autonomy, robotaxis, and energy storage as “jazz hands” meant to distract from deteriorating auto metrics and a lack of recent successful innovation or new mass-market products.
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Tesla’s valuation is vulnerable if markets treat it like an automaker, not a tech firm.
Galloway argues that if Tesla is valued like other big tech, its stock could be cut in half, and if it’s valued like a normal auto company, downside could reach 50–80% as its multiple converges toward peers like Ford, GM, and BYD.
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Big tech’s scale makes it the natural winner in the AI race.
Using Microsoft’s AI investments and Google’s search monopoly as examples, they suggest that incumbents with massive capital, distribution, and data—like Microsoft, Alphabet, and Meta—are structurally advantaged in monetizing AI.
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Notable Quotes
“Unfortunately for our children, this is one of the best run companies in the world.”
— Scott Galloway (on Meta)
“Microsoft has spent more money on AI than every other company and venture capitalist, I believe, combined.”
— Scott Galloway
“I think Mark Zuckerberg taking his forward-leaning investments, which he can afford, out of virtual reality into AI, that just feels right as rain to me.”
— Scott Galloway
“He said, 'We should be thought of as an AI robotics company. If you value Tesla as just an auto company, just the wrong framework.'”
— Kara Swisher (quoting Elon Musk)
“It is a fantastic car. It should be the highest multiple on EBITDA of any auto company, which means it's gonna go down 60 to 70%.”
— Scott Galloway (on Tesla)
Questions Answered in This Episode
How sustainable is Meta’s strategy of prioritizing AI user adoption before having a clear monetization plan?
The discussion contrasts Meta’s strong Q1 financial performance and aggressive pivot into AI with Tesla’s sharp profit decline and narrative pivot to AI and robotics. ...
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To what extent can Meta’s video dominance and a potential TikTok ban entrench its power in social media and advertising?
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What concrete milestones would Tesla need to hit in autonomy and robotics to justify its current valuation premium over other automakers?
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Are investors underestimating the competitive threat from Chinese EV makers like BYD in the race for affordable electric vehicles?
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Does the concentration of AI investment in a few big tech firms pose long-term risks for competition, innovation, or regulation in the tech sector?
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Transcript Preview
There's a lot of earnings news out there this week. Let's start with Meta's Q1. The company saw revenue increase 27%, uh, from $28.65, uh, billion in the same period last year. Net income more than doubled to $12.37 billion. This c- this company is making some money. But Meta's forecast of rising costs related to AI, they've replaced a, uh, you know, their, um, virtual reality stuff with AI (laughs) sent... which is very expensive, sent its share price down 15% in extended trading. It's gonna cost some money for them to get into this business. Mark Zuckerberg said on the earnings call that his immediate goal is getting millions or billions of people using Meta AI, with revenue coming down the line. They do not have revenue plans. M- m- that's one thing we need to stress. A lot of this AI doesn't have a business plan yet. Um, and, or there's a, there's a, it's a small business plan, um, and there's anticipation of huge profits in the future. So, he's doubling down on doing this, um, and i- i- at the same time, his current business is killing it, right? I mean, thoughts?
I think it's arguably... Unfortunately for our children, this is one of the best run companies in the world. It's just, uh, the amount of money here they're printing and he's... the m- what, what was... d- I thought the most interesting thing about their earnings call relative to Tesla, was Tesla's massive, uh, investment in AI. You know, uh, Musk was bragging about how many GPUs they'd order, ordered-
Yeah.
... because he's trying to create a distraction from the fact (laughs) his core business is in decline.
Well, let me get... let me put those earnings. You can... let, let's talk about the Met- let's talk about Meta first, though.
Sure.
Should lotta p- should he be focusing on the other parts of the business? No, 'cause that's... he's gonna have... this is something... we were both making fun of his, uh, investments in virtual reality and, uh, Oculus. You know, all the Metaverse stuff.
Yeah.
You know, and changing the name. We thought that was ridiculous and a waste of money.
Yeah.
And throwing money down a sh- down a toilet essentially.
Mm-hmm.
In this case, do you think this spending, which is gonna be massive, is... he's gotta be in here, right? This is not a-
I, I-
... choice.
So, I can't... I, I can't predict if these investments are gonna pay off, but I think-
Yeah.
... they have to make them. I, I just-
Yeah.
When you have... when you have the premier technology eating the world and the market, the market seems to offer you a return on investment on that, the perception that you're investing here. I mean, to a certain extent, even des- st- despite the fact... let me back up. Microsoft has spent more money on AI than every other company and venture capitalist, I believe, combined. If you look at Microsoft and its affiliates and its proxies, it is inv-... Satya Nadella is now considered, in my opinion, the, probably the brightest mind in business. And, I mean, there's a lot of them, but his forward lean, his forward-leaning investments in AI have increased the market cap of that company probably one or... one to $1.4 trillion off of a huge investment, but relative to $1.4 trillion. It's the best corporate investment... it's probably arguably the best venture investment in history. And so everyone says, "We can't beat the company they got behind." I mean, quite frankly, Mark... uh, the, supposedly the brightest man in technology, Musk? He's way behind in AI. He talks about it a lot. He doesn't have a single real victory in AI. It's not... his, his known in AI for walking away from the most successful AI company ever-
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