At Deepwater, we own shares of META, and we believe the company is well-positioned to leverage AI at scale to drive ad-revenue growth. That said, I’m disappointed in one of the company’s most recent AI products. We tested Meta AI running on the new Meta Display in a side-by-side comparison against ChatGPT’s video conversation tool running on an iPhone. Meta AI understood about 90% of prompts and delivered satisfactory answers roughly half the time, while ChatGPT understood 100% of prompts and provided satisfactory responses 98% of the time.

The market appears to be looking past the facts about how quickly AI is advancing, evidenced by NVDA shares being down 3% following better than expected earnings and guidance and the Nasdaq falling 2% over the past five trading days.…

The 2% decline in NVDA shares following October results and January guidance, both of which were above whisper expectations, reflects investor concerns that, when it comes to AI, it can’t get any better. While the concern is understandable, most signs suggest that growth for Nvidia and the broader AI infrastructure buildout is still in its infancy.

It's becoming more clear that demand for the new iPhone Air is soft. Recent third party estimates suggest the new form factor accounts for around 5% of iPhone sales. Before it went on sale, I and the Street had estimated it would account for 15% of sales. Despite that headwind, the iPhone is growing at its fastest rate in four years, largely thanks to a massive upgrade pool showing up, albeit nine months late.

Meta is putting a lot of effort into wearables, but based on our recent testing of the new Meta Display, they have a long way to go before they get the right formula. We ordered our Meta Display as soon as it was announced and got it 26 days later. Our bottom line is that while the tech is impressive, we find it hard to recommend the product based on its limited use cases. However, we continue to believe Meta is making the right move by investing around $18B annually into Reality Labs, but the return on that investment will take years.

I remain positive on shares of NVDA and believe over the next two years growth will be higher for longer. That said, the cross currents around next week’s earnings set up a Catch-22 for the AI complex, because stronger guidance can amplify worries about overspending, while a modest raise can be read as the first sign that growth is normalizing faster than expected. As for changes to Street estimates, Jensen’s comments on October 28 suggest the consensus CY26 growth estimates will increase from the current 39% y/y growth to 45%.

The shareholder meeting was a good day for Elon. Investors overwhelmingly approved his $1T pay package with more than 75% in favor. That's a win for TSLA investors for two reasons. First, it gives Elon the control and financial carrot he wanted, which means he will stay engaged at Tesla. Second, the high level of support likely means investors will continue to look past near-term challenges and stay the course with hope for the long term. Elon made it clear that the long term is anchored in the success of Optimus. Separately, during Musk's presentation and Q&A, he floated the idea of building a fab, an outcome I put in the unlikely category over the next five years.