Tim Beyers: To that point, Jason, let's talk about two that are on the radar this morning as we are taping. This is on Monday late morning Mountain Time. Both Monday.com, ticker MNDY, and Kyndryl, ticker KD, are getting absolutely slaughtered. Monday has been down more than 20% through various parts of the day. Kyndryl down more than 50%. These two are a little different, though. We'll talk about Monday in a second, but just the story on Kyndryl as the CFO and the General Counsel both appear to have been d ...

Core Viewpoint - Meta Platforms, Inc. has experienced significant stock volatility, with declines exceeding 30% multiple times in recent years, resulting in substantial market value loss [2] Group 1: Risks - Uncontrolled AI capital expenditure is projected to exceed $100 billion in 2026, impacting free cash flow and leading to a potential devaluation as investors assess ROI on AI infrastructure spending [11] - Ad revenue is expected to slow down due to competition from TikTok, with TikTok's global ad revenue projected to reach $33 billion in 2025, marking a 40% year-over-year increase [11] - Significant legal liabilities may arise from lawsuits related to youth harm, with potential multi-billion dollar fines and mandated product design changes affecting user engagement and advertising revenue [11] Group 2: Historical Performance - Meta's stock has historically faced severe downturns, falling approximately 43% during the 2018 correction, 35% during the COVID crash, and 77% during the inflation shock [7] - Despite robust fundamentals, major sell-offs can occur suddenly, even when the overall market is performing well [8] Group 3: Financial Metrics - Revenue growth has been reported at 21.3% LTM and an average of 17.3% over the past three years [12] - The company has a free cash flow margin of nearly 23.7% and an operating margin of 43.2% LTM [12] - META stock is currently trading at a P/E multiple of 26.7 [12]

Summary of Key Points from the Conference Call Industry Overview - The report discusses the dynamics of global interest rates, particularly focusing on the impact of AI-related capital expenditures (capex) on yield sensitivity to public debt supply [2][3][12]. Core Insights and Arguments - Over the past three decades, long-term interest rates have become less sensitive to public debt supply due to rising global savings relative to private investment [2][3]. - The AI capex cycle is expected to reverse the trend of declining sensitivity, with a potential increase in investment-to-GDP to around 2%, which could double the sensitivity of yields from 2 basis points (bp) to 3-4 bp per 1 percentage point (pp) of debt-to-GDP [2][12]. - A projected rise in US debt-to-GDP by approximately 25 pp over the next decade could increase cumulative upward pressure on 5-year forward yields from a baseline of 50 bp to as much as 80-100 bp [2][12]. - Historical trends indicate that global savings typically adjust to rising investment demand, with a significant expansion of China's current account surplus expected to improve the global savings-investment balance [2][14][21]. - The sensitivity of yields to changes in public debt-to-GDP has started to reverse, with a recent estimate suggesting a 1 pp rise in debt-to-GDP pushes yields higher by around 2 bp [5][12]. Important but Potentially Overlooked Content - The recycling of China's current account surplus is anticipated to offset half of the rise in global investment demand, which could stabilize the savings-investment balance around 0-0.5 pp over the next few years, down from the pre-pandemic range of 1-1.5 pp [21][22]. - The decline in China's ownership of US Treasuries over the past 15 years suggests that the recycling of savings may occur in a different form, potentially leading to more intermediation frictions and a more price-sensitive investor base [23][24]. - The report emphasizes that while fiscal pressures will influence yield trajectories, other factors such as financial deregulation and productivity-led disinflation will also play significant roles [21][22]. Conclusion - The dynamics of global interest rates are shifting due to the interplay between AI capex, public debt supply, and global savings. The anticipated changes in these areas could lead to sustained upward pressure on long-term yields, necessitating careful monitoring by investors [2][21][22].