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Welcome back everyone. 
Today on the Joseph Carlson 

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Show. 
The market's in the green. 

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It's doing well today. 
In fact, it seems like almost 

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every stock is in the green. 
We have the NASDAQ up 1%, the 

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S&P 500's up 1%, and even the 
Dow Jones is up 1.3%. 

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So green across the board, 
except for maybe one company, 

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one company in particular, which
is of course Google. 

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Google has not done well 
recently. 

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I don't know if you've been 
following the stock price 

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closely of Google, but it has 
not kept up with the rest of the

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market. 
In fact, if we just take a look 

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here, we have the S&P 500 up 
around 10% this year, the same 

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with the QQQ, and then we have 
Google up 7.6%. 

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So it's underperformed the 
market year to date, which is 

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interesting in and of itself 
because Google's a big tech 

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company. 
It's supposed to be leading the 

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market. 
Not only that, Google has also 

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gone down from $192.00 per 
share. 

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So right here it was one 93192 
and it's gone all the way down 

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to the one 50s. 
So we have a price decrease of 

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22% over the past couple of 
months, 22% in Google. 

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A 22% decline in a stock is not 
just a correction. 

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This is a bear market. 
Google stock has entered into a 

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bear market as the rest of the 
stock market surging upwards. 

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So what's going on with Google? 
Why is the stock trading so 

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cheap and it's still continuing 
to trade down. 

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It's at a 17 Ford PE ratio. 
While the markets going up, this

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stock continues to go down. 
We have a note here from 

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Qualtrum saying that Alphabet 
shares are trading lower after 

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the UK's CMA raised objections 
to the ad tech practices for 

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Google. 
That's one piece of news. 

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Of course, we can dive into this
blockbuster antitrust case 

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that's just risen again. 
So they have that going on. 

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We also have is that Google may 
be losing its verb status. 

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The Gen. 
Z folk, the new kids, they're 

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now saying search instead of 
Google. 

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So we have a whole article here 
dedicated to Google losing its 

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status as a verb. 
But I don't think these are the 

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only reasons. 
I think there's more going on 

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with Google that we'll be 
looking at today. 

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So we're going to be diving in 
in this episode to the reason 

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that Google's going down in 
stock price. 

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When we look over all the data, 
this is what's causing it to go 

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down and what I believe will 
cause it to make a full 

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recovery. 
My prediction is Google will 

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eventually make a full recovery.
And in fact, within a year, I 

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see it trading above 190 once 
again. 

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I'll be going over the reasons 
why Apple, of course, has their 

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new iPhone event where they went
over all their new iPhones, all 

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the new features, everything 
that they're showing for the 

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future. 
Is this enough to cause and new 

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upgrade cycle? 
Is Apple going to be able to 

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accomplish that mission of 
causing people to once again 

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ditch their old iPhones and buy 
the new ones? 

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We'll see. 
And then finally, the Wall 

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Street Journal got its hands on 
some leaked Disney data that 

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reveals some financial metrics 
and KPIs and some strategies and

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secrets from Disney. 
So we're going to take a look at

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some of the specific numbers, 
like how much Disney Plus 

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actually makes or loses. 
This is interesting data. 

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So we'll be looking at that as 
well. 

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So we have a lot to get into in 
this episode. 

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All of this, of course, for free
if you like this type of 

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content. 
Just make sure to like the video

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and subscribe to the channel. 
Now let's go ahead and start off

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by talking about Google here. 
Google's trading down today 1.3%

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while the rest of the market 
races up. 

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And that makes a difference when
you see this going on where the 

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Dow Jones is up 1.4%, the S&P 
500 is up and the Nasdaq's up 

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and your stock going down. 
There's something specific going

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on because you can't explain 
this just by general market 

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sentiment or by money flows. 
By equity flows, this means that

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people are penalizing Google. 
The difference in performance 

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today is over 2%, meaning that 
on an average day where the 

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market's flat, this is as if 
Google's down 23%. 

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So this is a really red day for 
Google after previously, as of 

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market closed Friday, it had 
another very red day. 

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It was down 3% on Friday alone. 
So Google shares are getting 

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shredded right now. 
If we look at the biggest single

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factor impacting Google today, 
it's the antitrust lawsuits, 

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it's regulation. 
If you recall, if we refresh 

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your memory here just for a 
minute, Google just went through

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an antitrust case that they 
lost. 

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That's the one where the 
Department of Justice sued 

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Google for being an illegal 
monopoly, specifically by 

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defaulting everywhere. 
So they bought defaults on, of 

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course, Android and Mozilla and 
on Safari. 

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Apples was the big default. 
And basically when Google's 

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defaulted everywhere, they, they
insulated themselves from 

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competition. 
That was the argument from the 

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Department of Justice, and they 
won that case. 

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We don't see right now what the 
penalty could be. 

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So potentially Google could be 
broken up. 

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That's one of the the penalties 
that's on the table. 

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Well, now we have a new one. 
This is Round 2. 

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This is a completely different 
antitrust regulation or 

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antitrust lawsuit being thrown 
at Google. 

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And this time it doesn't have to
do with search being defaulted. 

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This time it has to do with 
their ad place market. 

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So Google has not only one 
monopoly in defaulting search, 

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but now they're suggesting they 
have another one with their 

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control over the ad market. 
If we read over the details of 

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this new case, they say that the
Justice Department's case is 

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alleging that Google has an 
unlawful grip on the market of 

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software being used to sell 
digital ads, known as ad tech. 

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When you go through the details 
here, they're suggesting that 

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Google is on two different sides
of this market. 

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For example, Google owns the 
market, but then they're also 

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competing in the market. 
They're buying and selling ads, 

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and the Justice Department 
doesn't like that. 

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They both own it and compete in 
it. 

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They're suggesting that it's 
unfair and in fact, illegal. 

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The Justice Department has said 
that Google, quote, has engaged 

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in a campaign to condition 
control and tax digital 

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advertisement transactions over 
15 years. 

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They say that this campaign was 
exclusionary, anti competitive 

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and mutually reinforcing. 
Google has said in response to 

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this, in preparation for this 
lawsuit, that quote, we will 

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show the ad buyers and sellers 
have many options. 

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And when they choose Google, 
they do so because our ad tech 

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is simple, affordable, 
effective, and in short, it 

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works. 
So you get the basic summary of 

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this new case. 
They're now not only a monopoly 

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for defaulting their search 
engine, they're also a monopoly 

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for having really good ad tech 
that everyone's using. 

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So now Google's trying to defend
two different monopolies or 

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so-called monopolies. 
And you can argue the nuance and

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differences between these 
monopolies and whether Google's 

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truly a monopoly or not, but 
that's an argument for a 

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different day. 
When it comes down to it, we're 

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investors. 
We're looking for where we can 

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make money. 
And the question is whether or 

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not Google's going to recover 
with all these lawsuits going 

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on. 
Can Google not only persevere 

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through all this regulation, but
ultimately prevail and become 

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even more prosperous in the 
future? 

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We need to know whether or not 
this company can make a full 

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recovery, whether or not the 
stock price will go back up to 

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$200.00. 
And my argument today is going 

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to be that they will. 
I think that ultimately, I 

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believe all the unknowns, all 
the uncertainties today will be 

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looked back on as a buying 
opportunity. 

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I believe that Google will 
eventually recover because when 

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we look at these type of 
headlines, the Department of 

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Justice launching another 
lawsuit, these big, bold, 

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glaring headlines, that creates 
an emotional reaction in Google 

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shareholders. 
It causes people to want to sell

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the stock and ultimately a lot 
of investors look at these 

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headlines over focusing on the 
fundamentals. 

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And I've seen this time and time
again with Google, If we look at

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the actual company and the 
actual fundamentals, we get a 

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much better idea of what's going
on with this company and most of

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the fundamentals. 
The actual cold hard data shows 

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that Google's in a much better 
situation and a much better 

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position than what the headlines
would lead you to believe. 

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For example, we can look at the 
fares surrounding Google search.

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If we cross out all other forms 
of revenue except for just 

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Google search, we see the growth
trajectory over time. 

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You've been told to be scared 
about Google search, that there 

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is GPT search, there's 
perplexity, there's Bing AI, 

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there's no articles from 
Business Insider that Google's 

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not even a a verb anymore. 
People are just saying to search

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things instead of to Google 
them. 

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But during all of that, all 
those scary headlines, Google 

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search has grown 14% year over 
year. 

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The revenue continues to grow. 
People are still using Google 

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Search despite all the headlines
you see. 

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The data shows continued growth 
as of this most recent quarter. 

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It's not even slowing down in 
the most recent quarter. 

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We can take a look at YouTube, 
for example. 

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YouTube continues to grow and of
course it does. 

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Everyone you know uses YouTube. 
You look at Google Network. 

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This is the part of the business
that they're suggesting is a 

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monopoly for Google. 
And ironically, this is the only

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part that's actually shrinking 
year over year. 

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So the Department of Justice is 
late to the game. 

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They're targeting a portion of 
the company that is not even 

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growing. 
We look at the subscription 

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business. 
This is a YouTube subscription, 

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YouTube Premium, This grew 14%. 
So we see good growth there as 

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well. 
We look at Google Cloud, which 

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I'll go into as the most 
interesting, important and 

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intrinsic growth path for 
Google. 

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And this is growing like crazy. 
It grew 28% year over year as of

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the most recent quarter. 
So the most important part of 

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Google's business is growing 
nearly 30% year over year. 

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When I look over the revenue by 
segment, I don't see anything to

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suggest panic. 
So in the revenue line items, I 

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don't see a problem with Google.
Now there is some concerns about

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different financial metrics of 
Google, specifically the free 

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cash flow of the company. 
If we look at my investment 

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philosophy and the biggest 
drivers of intrinsic value, 

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intrinsic value meaning the 
value of the stock, what the 

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stock price will trade up to. 
I define the biggest drivers of 

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intrinsic value as three 
separate things, one of them 

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being organic revenue growth. 
This is revenue growth just 

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through price increases or more 
customers, more volume, not 

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revenue growth through doing 
dilutive acquisitions or buying 

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things with debt. 
So organic revenue growth is a 

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main driver of intrinsic value. 
Another one is free cash flow 

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per share growth. 
When free cash flow per share 

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starts to grow, typically the 
intrinsic value of a company's 

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going up. 
And then the last one is the 

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predictability improving. 
Predictability improving means 

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that the company's becoming more
predictable. 

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The the Moat is expanding, the 
durability and predictability of

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the company is improving. 
When we look at Google, they're 

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missing a couple of these. 
First of all, as we've already 

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outlined, the predictability is 
not really improving. 

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If anything, the predictability 
is getting a little worse as we 

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have all these recent lawsuits 
now. 

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The predictability will improve 
once these lawsuits are 

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unsettled, once we know whether 
or not Google's being broken up,

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once we can get all these big 
question marks behind us, 

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predictability improves and so 
does the intrinsic value. 

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But the other one that we could 
look at is the free cash flow 

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per share. 
Now we have the free cash flow 

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here on a trailing 12 month 
basis. 

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This shows you it not on a per 
share basis, but just on a total

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nominal basis. 
Google over the last 12 months 

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generated $60.7 billion in free 
cash flow. 

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When we look at this with a 
stock based comp view, we know 

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that they have a lot of dilution
here, so they're diluting a lot 

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to pay all of this talent, all 
of these engineers at their 

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company. 
When we break this down further 

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on a free cash flow per share 
basis, you can see the issue 

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here. 
When I zoom into the past 10 

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years, you can see it clear. 
Google stock price goes up when 

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the free cash flow per share 
goes up. 

230
00:11:30,360 --> 00:11:35,120
From 2019 to 2021, the free cash
flow per share went from $2.00 

231
00:11:35,520 --> 00:11:37,480
to $5. 
Let's go ahead and take a look 

232
00:11:37,600 --> 00:11:40,520
at the stock price. 
We can go back 10 years here. 

233
00:11:40,760 --> 00:11:46,680
From 2019 to 2021, the stock 
price went from 62 dollars, $65 

234
00:11:46,680 --> 00:11:48,800
to 140. 
The free cash flow per share 

235
00:11:48,800 --> 00:11:51,640
doubled over this time period. 
The stock price doubled. 

236
00:11:51,960 --> 00:11:54,240
Very simple. 
We go back to the free cash flow

237
00:11:54,240 --> 00:11:57,240
per share and we take a look at 
what's happened since 2021. 

238
00:11:57,520 --> 00:11:58,960
You can see it very clearly 
here. 

239
00:11:58,960 --> 00:12:01,800
I can draw a line. 
The free cash flow per share has

240
00:12:01,800 --> 00:12:07,160
been entirely flat since 20/21. 
It was $5 and 19 cents the most 

241
00:12:07,160 --> 00:12:10,440
recent quarter on a trailing 
basis, it was $4.87. 

242
00:12:10,840 --> 00:12:14,560
So it's about the same. 
It's around $5 per share in free

243
00:12:14,560 --> 00:12:16,600
cash flow. 
Then we go back to the price 

244
00:12:16,600 --> 00:12:18,440
chart. 
Here we can take a look again 

245
00:12:18,760 --> 00:12:23,440
where is the price since 2021? 
The price is completely flat. 

246
00:12:23,800 --> 00:12:25,600
The free cash flow per share is 
flat. 

247
00:12:25,920 --> 00:12:28,160
The price is flat. 
Very simple math. 

248
00:12:28,200 --> 00:12:30,960
Remember, a company needs to 
have these three things to have 

249
00:12:30,960 --> 00:12:34,280
the stock price increase in any 
meaningful or sustainable 

250
00:12:34,280 --> 00:12:36,600
amount. 
We have organic revenue growth. 

251
00:12:36,600 --> 00:12:39,520
So we have one ingredient here, 
but we do not have the 

252
00:12:39,520 --> 00:12:42,680
predictability improving. 
Google's predictability has been

253
00:12:42,760 --> 00:12:44,840
ebbing and flowing. 
I would say it's been going down

254
00:12:44,840 --> 00:12:47,120
a little bit. 
And we also have free cash flow 

255
00:12:47,120 --> 00:12:50,080
per share not growing, but it's 
just staying the same. 

256
00:12:50,080 --> 00:12:53,080
So the stock price ultimately is
staying around the same. 

257
00:12:53,080 --> 00:12:55,000
So the formula here is very 
simple. 

258
00:12:55,000 --> 00:12:58,840
For Google stock price to go 
back up to 190 or above $200 per

259
00:12:58,840 --> 00:13:02,160
share, the free cash flow per 
share needs to go back up and 

260
00:13:02,160 --> 00:13:04,120
the predictability needs to 
improve a little. 

261
00:13:04,360 --> 00:13:07,000
We need the lawsuits and the 
uncertainty to get further 

262
00:13:07,000 --> 00:13:09,240
behind us. 
Once we get a little bit more 

263
00:13:09,240 --> 00:13:12,240
clarity, predictability improves
and that helps the stock price 

264
00:13:12,240 --> 00:13:13,960
out. 
And then ultimately, the free 

265
00:13:13,960 --> 00:13:17,600
cash flow needs to go back up. 
Now, how does Google's free cash

266
00:13:17,600 --> 00:13:20,560
flow go back up? 
Well, the formula here is very 

267
00:13:20,560 --> 00:13:23,040
simple again. 
So you take the operating income

268
00:13:23,040 --> 00:13:26,520
of the company and you subtract 
out the CapEx expenditure. 

269
00:13:26,960 --> 00:13:30,280
Now, the problem is, as Google 
has been earning more and more 

270
00:13:30,280 --> 00:13:33,200
in operating income, they've 
also been increasing the amount 

271
00:13:33,200 --> 00:13:35,760
of CapEx. 
So the free cash flow is not 

272
00:13:35,760 --> 00:13:38,200
growing in line with their 
operating income. 

273
00:13:38,600 --> 00:13:41,120
To illustrate this, we can take 
a look at their expenses. 

274
00:13:41,200 --> 00:13:44,440
We go down to expenses here. 
We filter by the CapEx. 

275
00:13:44,480 --> 00:13:47,200
You can see the enormous 
expansion of CapEx. 

276
00:13:47,240 --> 00:13:50,360
It's going up like crazy. 
The most recent quarter, Google 

277
00:13:50,360 --> 00:13:54,760
has spent $44 billion in CapEx 
over the trailing 12 months. 

278
00:13:55,160 --> 00:13:59,160
So in the full trailing gear, 
they've spent $45 billion in 

279
00:13:59,160 --> 00:14:01,360
CapEx. 
That is incredible. 

280
00:14:01,640 --> 00:14:05,000
That's a company that's no 
longer capital light or highly 

281
00:14:05,000 --> 00:14:07,000
efficient. 
This is a company that takes 

282
00:14:07,000 --> 00:14:10,080
significant, significant 
investments to run. 

283
00:14:10,240 --> 00:14:13,280
So even though they're growing 
in their operating income, 

284
00:14:13,280 --> 00:14:15,320
they're earning more money 
organically. 

285
00:14:15,520 --> 00:14:18,960
They're throwing a huge portion 
of that money back into CapEx. 

286
00:14:19,120 --> 00:14:21,960
So the reason the free cash flow
per share has been trending down

287
00:14:21,960 --> 00:14:25,040
for Google for the past four 
quarters is because the CapEx 

288
00:14:25,040 --> 00:14:28,120
has been trending dramatically 
up for the past four quarters. 

289
00:14:28,560 --> 00:14:30,200
And that leaves me with a couple
questions. 

290
00:14:30,520 --> 00:14:32,640
First of all, the biggest 
question is what is all this 

291
00:14:32,640 --> 00:14:36,240
CapEx for and are they going to 
get really high returns on it? 

292
00:14:36,560 --> 00:14:39,320
Because I don't mind Google 
sending an enormous amount on 

293
00:14:39,320 --> 00:14:42,480
CapEx if they're going to get 
really good returns. 

294
00:14:42,880 --> 00:14:45,240
They get a high return on 
capital employed and all these 

295
00:14:45,240 --> 00:14:47,760
investments pay off. 
This money's well spent. 

296
00:14:47,840 --> 00:14:50,160
So what is all this CapEx being 
used for? 

297
00:14:50,240 --> 00:14:52,920
The biggest hint that Google 
gave us was in their earnings 

298
00:14:52,920 --> 00:14:55,360
call, they spoke directly about 
the CapEx. 

299
00:14:55,640 --> 00:14:58,000
If we bring up their recent 
earnings reports here, their 

300
00:14:58,000 --> 00:15:00,120
earnings transcripts, we bring 
up Q2. 

301
00:15:00,120 --> 00:15:02,680
This is most recent one. 
We can search this page and just

302
00:15:02,680 --> 00:15:05,200
search CapEx. 
And this brings us right to it. 

303
00:15:05,560 --> 00:15:09,240
With respect to CapEx, our 
reported CapEx in the second 

304
00:15:09,240 --> 00:15:13,800
quarter was 1313 billion, once 
again driven overwhelmingly by 

305
00:15:13,800 --> 00:15:17,080
investment in our technical 
infrastructure with the largest 

306
00:15:17,080 --> 00:15:19,640
component for servers followed 
by data centers. 

307
00:15:19,960 --> 00:15:23,280
Looking ahead, we continue to 
expect quarterly CapEx 

308
00:15:23,480 --> 00:15:27,680
throughout the year to be 
roughly at or above Q1 CapEx of 

309
00:15:27,680 --> 00:15:30,800
12 billion, keeping in mind that
the timing of cash payments can 

310
00:15:30,800 --> 00:15:34,480
cause variability in quarter 
reported CapEx, Google spending,

311
00:15:34,480 --> 00:15:36,960
all of this increase in CapEx on
Google Cloud. 

312
00:15:37,000 --> 00:15:40,000
And again, I believe that Google
Cloud is the most meaningful, 

313
00:15:40,280 --> 00:15:42,560
best part of Google as a 
business. 

314
00:15:42,560 --> 00:15:44,680
Google Search is supporting the 
stock right now. 

315
00:15:44,720 --> 00:15:46,360
It's the profit Center for the 
company. 

316
00:15:46,640 --> 00:15:49,640
But Google Cloud is the new 
growth path for this company. 

317
00:15:50,120 --> 00:15:53,720
Google's in 3rd place behind 
Azure and behind AWS, but it 

318
00:15:53,720 --> 00:15:55,440
still has a very meaningful 
business. 

319
00:15:55,720 --> 00:15:58,160
In the most recent quarter, it 
did $10 billion. 

320
00:15:58,320 --> 00:16:02,320
So this is above a $40 billion 
run rate, growing 30%. 

321
00:16:02,720 --> 00:16:06,040
On top of that growth, if we 
look at the ROI they're getting,

322
00:16:06,160 --> 00:16:09,040
the actual profits they're 
getting, it's now moved firmly 

323
00:16:09,040 --> 00:16:12,000
into profit mode as well. 
For a long period of time, 

324
00:16:12,000 --> 00:16:15,120
Google Cloud was losing money. 
This is the operating margins 

325
00:16:15,120 --> 00:16:17,480
over time. 
So any chart going down means 

326
00:16:17,480 --> 00:16:19,960
they're losing money. 
Now that they're going up means 

327
00:16:19,960 --> 00:16:22,680
they're making money. 
This is now at 11 percent. 

328
00:16:23,000 --> 00:16:26,120
I think these operating margins 
will continue to climb up to 

329
00:16:26,120 --> 00:16:28,400
30%. 
And this is happening while 

330
00:16:28,400 --> 00:16:31,200
Google's making significant 
investments in their cloud 

331
00:16:31,200 --> 00:16:33,880
infrastructure. 
And ultimately, when we look at 

332
00:16:33,880 --> 00:16:37,280
the free cash flow and we hash 
out these questions of how much 

333
00:16:37,280 --> 00:16:39,840
Google needs to spend or how 
much they're spending right now,

334
00:16:40,360 --> 00:16:43,360
I think ultimately the amount 
that they need to spend on 

335
00:16:43,360 --> 00:16:46,080
technical infrastructure will 
slow down. 

336
00:16:46,400 --> 00:16:49,320
The amount of CapEx needed to 
run this business will normalize

337
00:16:49,320 --> 00:16:51,480
over a period of time. 
You can see that throughout 

338
00:16:51,480 --> 00:16:54,960
history, the CapEx requirements 
of Google go through these huge 

339
00:16:54,960 --> 00:16:57,720
growth modes where they spend a 
lot more money and then they 

340
00:16:57,720 --> 00:17:00,800
stabilize, they normalize and in
some cases, they even go down a 

341
00:17:00,800 --> 00:17:02,680
little bit. 
And if that happens again in the

342
00:17:02,680 --> 00:17:06,800
future, if we get through this 
huge CapEx investment cycle into

343
00:17:06,800 --> 00:17:10,560
cloud and eventually it 
normalizes, it slows down and it

344
00:17:10,560 --> 00:17:14,000
stabilizes and Google continues 
to grow their revenue, then the 

345
00:17:14,000 --> 00:17:17,240
free cash flow per share growth 
will follow instead of going 

346
00:17:17,240 --> 00:17:20,520
down, it'll trend right back up.
If we have that free cash flow 

347
00:17:20,520 --> 00:17:23,280
per share growth, that'll be 
another intrinsic value driver 

348
00:17:23,319 --> 00:17:25,720
for the company. 
The final one will be the 

349
00:17:25,720 --> 00:17:29,160
predictability improving, which 
I believe will happen around the

350
00:17:29,160 --> 00:17:31,560
same time. 
I think over the next year or 

351
00:17:31,560 --> 00:17:33,160
so. 
Predictability is going to 

352
00:17:33,160 --> 00:17:36,080
improve as we get ahead of these
lawsuits, and the free cash flow

353
00:17:36,080 --> 00:17:39,640
per share growth will improve as
the CapEx spend normalizes. 

354
00:17:39,960 --> 00:17:43,280
So looking over Google and my 
position in the company, I'm 

355
00:17:43,280 --> 00:17:45,720
still bullish on it. 
And in fact, if it continues to 

356
00:17:45,720 --> 00:17:48,520
trade down like it is, I'll be 
adding to my position for the 

357
00:17:48,520 --> 00:17:52,280
first time in well over a year. 
So this is a company that I'm 

358
00:17:52,280 --> 00:17:55,200
making a bet on. 
I have around $32,000 invested 

359
00:17:55,200 --> 00:17:57,960
in this one, so a significant 
portion in Google. 

360
00:17:58,240 --> 00:18:00,240
But I wanted to share these 
thoughts because I think this 

361
00:18:00,240 --> 00:18:03,600
company right now is a buy. 
Now moving on, we get to Apple's

362
00:18:03,600 --> 00:18:06,560
highly anticipated Apple event, 
and this is where they're 

363
00:18:06,560 --> 00:18:09,680
supposed to reveal all new 
iPhones and other devices. 

364
00:18:09,960 --> 00:18:12,080
And this one in particular, they
said they're going to be talking

365
00:18:12,080 --> 00:18:15,280
about the Apple Watch, the 
Airpod, and the iPhone. 

366
00:18:15,520 --> 00:18:18,440
Let me give a brief update of 
everything they went over in 

367
00:18:18,440 --> 00:18:20,560
this event. 
First of all, they came out with

368
00:18:20,560 --> 00:18:24,200
a new Apple Watch Series 10 with
a bigger screen and thinner 

369
00:18:24,200 --> 00:18:26,280
design. 
They made it so that the Apple 

370
00:18:26,280 --> 00:18:29,760
Watch Ultra 2 now comes in 
black, and they talked a lot 

371
00:18:29,760 --> 00:18:32,320
about the Apple Band. 
So they have a brand new band, 

372
00:18:32,520 --> 00:18:34,320
looks really stylish. 
It's all black. 

373
00:18:34,880 --> 00:18:37,880
These are little iterative 
updates, but I guess if you're 

374
00:18:37,920 --> 00:18:40,040
looking to get one, this might 
convince you. 

375
00:18:40,640 --> 00:18:43,280
Another thing they talked about 
is that the Apple Watch can now 

376
00:18:43,280 --> 00:18:47,400
detect sleep apnea, and this is 
the first thing they spoke about

377
00:18:47,560 --> 00:18:51,480
in terms of healthcare. 
I've said years and years now 

378
00:18:51,680 --> 00:18:54,680
that Apple is a healthcare 
company and they're going to 

379
00:18:54,680 --> 00:18:57,400
become a bigger and bigger 
healthcare company. 

380
00:18:57,720 --> 00:18:59,200
When you think of healthcare, 
you might think of 

381
00:18:59,200 --> 00:19:02,000
pharmaceuticals. 
That's not the only part of 

382
00:19:02,000 --> 00:19:04,120
healthcare companies. 
There's many companies like 

383
00:19:04,120 --> 00:19:06,200
Medtronic that make medical 
devices. 

384
00:19:06,560 --> 00:19:09,480
Apple is now a medical device 
company. 

385
00:19:09,760 --> 00:19:12,000
The Apple Watch is just another 
example of that. 

386
00:19:12,240 --> 00:19:15,360
It literally can diagnose you 
with heart issues and now it can

387
00:19:15,560 --> 00:19:19,160
diagnosis you with sleep apnea. 
So these are good additions to 

388
00:19:19,160 --> 00:19:21,800
Apple and I think they're going 
to continue going down this 

389
00:19:21,800 --> 00:19:24,520
route of healthcare. 
They also announced the Apple 

390
00:19:24,520 --> 00:19:28,680
Airpod Max with USBC charging 
and it comes in all different 

391
00:19:28,680 --> 00:19:31,680
color ways. 
I think that Apple, they do the 

392
00:19:31,680 --> 00:19:34,760
strategy where if they don't 
have a lot of real changes to 

393
00:19:34,760 --> 00:19:38,200
the product, if it's just like a
difference in charging it, then 

394
00:19:38,200 --> 00:19:41,040
they they open up new colors. 
It's kind of their go to. 

395
00:19:41,040 --> 00:19:44,000
If we don't have some big ground
breaking change, let's offer a 

396
00:19:44,000 --> 00:19:46,560
bunch of different colors 
because colors are really 

397
00:19:46,560 --> 00:19:48,320
important. 
Apple's a great marketing 

398
00:19:48,320 --> 00:19:50,680
company. 
Apple also announced new 

399
00:19:50,680 --> 00:19:54,200
Airpods, the Airpod Fours that 
have noise cancellation and 

400
00:19:54,200 --> 00:19:56,360
better sound. 
Now of course, we know that 

401
00:19:56,360 --> 00:19:59,000
Apple's going to be coming out 
with incremental updates in 

402
00:19:59,000 --> 00:20:01,840
their Airpods because it's one 
of their most profitable, best 

403
00:20:01,840 --> 00:20:04,760
selling devices ever. 
But in this case, they also came

404
00:20:04,760 --> 00:20:07,400
out with a software upgrade for 
the Airpods. 

405
00:20:07,760 --> 00:20:10,800
That is a huge step. 
They have now a clinical grade 

406
00:20:10,920 --> 00:20:14,600
hearing test that you can 
perform with the Airpods on your

407
00:20:14,600 --> 00:20:16,920
iPhone. 
So you can Simply put the 

408
00:20:16,920 --> 00:20:20,120
Airpods in, do the hearing test.
You tap if you hear a sound, you

409
00:20:20,120 --> 00:20:22,960
don't tap if you don't. 
And they can judge what you're 

410
00:20:22,960 --> 00:20:25,920
hearing is if you have any 
hearing loss based on the 

411
00:20:25,920 --> 00:20:28,200
hearing loss. 
They can also work as hearing 

412
00:20:28,200 --> 00:20:30,840
aids. 
Now, the Apple Airpods are like 

413
00:20:30,840 --> 00:20:33,160
hearing aids to people that have
hearing loss. 

414
00:20:33,280 --> 00:20:35,400
And I think this is more 
meaningful than it looks. 

415
00:20:35,640 --> 00:20:37,800
We know that hearing tests are 
easy to do. 

416
00:20:37,800 --> 00:20:40,200
You can go to a local hearing 
clinic and get a hearing test. 

417
00:20:40,520 --> 00:20:42,840
And you can also get hearing 
aids, although they're very 

418
00:20:42,840 --> 00:20:46,440
expensive, you can in most cases
get those covered by insurance. 

419
00:20:46,800 --> 00:20:49,760
So people don't have a lack of 
access to hearing aids or 

420
00:20:49,760 --> 00:20:52,640
hearing tests. 
But yet they highlight that 80% 

421
00:20:52,640 --> 00:20:55,480
of Americans have not gotten a 
hearing test in the past five 

422
00:20:55,480 --> 00:20:57,720
years. 
Because most people don't want 

423
00:20:57,720 --> 00:20:59,600
to deal with it. 
They don't want to deal with 

424
00:20:59,600 --> 00:21:02,000
hearing aids. 
They have a stigma attached to 

425
00:21:02,000 --> 00:21:03,920
them. 
So if you're wearing hearing 

426
00:21:03,920 --> 00:21:06,320
aids and they wrap around your 
ear, people are going to be 

427
00:21:06,320 --> 00:21:09,000
looking at that. 
And there's a social stigma with

428
00:21:09,000 --> 00:21:12,960
the Apple Airpods now acting as 
a clinical grade hearing aid. 

429
00:21:13,320 --> 00:21:16,320
People that have some hearing 
loss could put them in act as 

430
00:21:16,320 --> 00:21:18,720
though they're just using their 
Airpods, but now they have 

431
00:21:18,720 --> 00:21:21,360
better hearing. 
So it's a way of treating a 

432
00:21:21,360 --> 00:21:24,320
hearing condition without 
dealing with the stigma 

433
00:21:24,320 --> 00:21:27,840
associated with hearing loss. 
This is another big way that 

434
00:21:27,840 --> 00:21:30,960
Apple's getting into healthcare.
It's not just with the Watch 

435
00:21:31,200 --> 00:21:33,880
now, it's with the Airs. 
Now when we get to the iPhone, 

436
00:21:33,880 --> 00:21:36,600
of course, they announced the 
iPhone 16 with a faster 

437
00:21:36,600 --> 00:21:38,920
processor. 
They went over the specs and 

438
00:21:38,920 --> 00:21:42,040
like Apple always does, it's so 
much faster than the previous 

439
00:21:42,040 --> 00:21:45,120
version every single time. 
Most of us know about that. 

440
00:21:45,120 --> 00:21:47,160
We know that every phone's going
to be faster. 

441
00:21:47,480 --> 00:21:49,000
So that's not the biggest take 
away. 

442
00:21:49,360 --> 00:21:53,400
Apple needs to put in some other
goodie, some other thing besides

443
00:21:53,400 --> 00:21:57,120
just a processor update in each 
of their phones, Some reason to 

444
00:21:57,120 --> 00:21:59,800
justify mentally buying the new 
phone. 

445
00:22:00,120 --> 00:22:02,080
In this case, they went with a 
new button. 

446
00:22:02,400 --> 00:22:05,000
They slapped a new button onto 
the right side of the phone, 

447
00:22:05,200 --> 00:22:07,600
which is called the camera 
control button. 

448
00:22:08,000 --> 00:22:11,560
Now they really talked this up 
like it's this big deal, like a 

449
00:22:11,560 --> 00:22:14,800
massive new innovation. 
The button has two different 

450
00:22:14,800 --> 00:22:16,600
pads. 
It's easier to press. 

451
00:22:16,800 --> 00:22:20,480
It has haptic feedback. 
It can be pressed halfway or all

452
00:22:20,480 --> 00:22:22,240
the way. 
It can be held down or double 

453
00:22:22,240 --> 00:22:24,640
tapped. 
It's a really versatile button. 

454
00:22:24,880 --> 00:22:27,440
So they didn't put a lot of 
energy into this button. 

455
00:22:27,480 --> 00:22:30,320
I just don't think that this is 
enough to make the jump. 

456
00:22:30,640 --> 00:22:32,840
I think it's a good addition. 
I actually think people really 

457
00:22:32,840 --> 00:22:36,360
like having a dedicated camera 
control button, but it doesn't 

458
00:22:36,360 --> 00:22:39,360
seem like this in and of itself 
is going to make a lot of people

459
00:22:39,360 --> 00:22:41,720
move from the iPhone 15 to the 
16. 

460
00:22:42,120 --> 00:22:44,280
It might be another goodie if 
you're all the way back on the 

461
00:22:44,280 --> 00:22:46,840
12 or 13. 
The biggest features that Apple 

462
00:22:46,840 --> 00:22:49,520
released that will promote 
upgrades from 1 device to the 

463
00:22:49,520 --> 00:22:52,640
next is not the hardware, but 
it's the software. 

464
00:22:52,640 --> 00:22:54,360
It's the artificial 
intelligence. 

465
00:22:54,720 --> 00:22:57,480
Apple has new visual 
intelligence that can actually 

466
00:22:57,480 --> 00:22:59,760
look at the screen. 
It can look at what you're 

467
00:22:59,760 --> 00:23:02,880
doing, and you can tell Siri to 
do certain things with what 

468
00:23:02,880 --> 00:23:05,240
you're currently viewing. 
Not only can it look at the 

469
00:23:05,240 --> 00:23:08,880
screen, but it can look through 
the camera, like the lens, the 

470
00:23:08,880 --> 00:23:11,480
outdoors. 
And you can ask Siri questions 

471
00:23:11,720 --> 00:23:14,240
based on that, or you can ask 
ChatGPT. 

472
00:23:14,680 --> 00:23:18,600
So Apple is leveraging its 
massive platform to default all 

473
00:23:18,600 --> 00:23:22,480
these different options of 
ChatGPT or Google to enhance 

474
00:23:22,480 --> 00:23:24,520
Apple's platform. 
And this is what they spent a 

475
00:23:24,520 --> 00:23:27,120
lot of time on. 
All the new hardware upgrades 

476
00:23:27,120 --> 00:23:30,840
for Apple's new iPhones are 
specifically to allow for all 

477
00:23:30,840 --> 00:23:34,080
the new AI capabilities, 
specifically the contextual 

478
00:23:34,080 --> 00:23:38,480
awareness of Siri Siri's not 
just like a random ChatGPT. 

479
00:23:38,720 --> 00:23:42,200
Siri's going to know the context
of everything on your device. 

480
00:23:42,520 --> 00:23:45,920
And Apple emphasized over and 
over again that all of that 

481
00:23:45,920 --> 00:23:50,360
context is private. 
It's on device, it's local, it's

482
00:23:50,360 --> 00:23:53,280
not stored anywhere where 
someone else can be peeking at 

483
00:23:53,280 --> 00:23:54,640
your iPhone and what you're 
doing. 

484
00:23:55,000 --> 00:23:58,200
So Siri has all the context of 
your text messages, your 

485
00:23:58,200 --> 00:24:01,760
history, your journal entries, 
your notepad, your voice memos, 

486
00:24:01,920 --> 00:24:05,280
your photos, and everything. 
Siri can filter through all 

487
00:24:05,280 --> 00:24:08,200
sorts of historical data, can 
retrieve information. 

488
00:24:08,520 --> 00:24:11,080
It's like having a personal 
executive assistant where you 

489
00:24:11,080 --> 00:24:14,480
can say, hey, find me all those 
photos from this different trip 

490
00:24:14,760 --> 00:24:17,960
and send it to this person and 
Siri will do that for you. 

491
00:24:18,080 --> 00:24:21,160
The contextual awareness of this
new AI is a single biggest 

492
00:24:21,160 --> 00:24:23,000
selling point of these new 
phones. 

493
00:24:23,080 --> 00:24:26,000
So overall, the iPhone gets the 
most attention with these 

494
00:24:26,000 --> 00:24:28,520
events. 
And I think it's true the AI and

495
00:24:28,520 --> 00:24:31,480
contextual awareness is a really
big deal, but that was somewhat 

496
00:24:31,480 --> 00:24:34,120
expected. 
The storyline that I think needs

497
00:24:34,120 --> 00:24:37,440
to get highlighted more with 
Apple is that this is becoming 

498
00:24:37,440 --> 00:24:39,880
the biggest healthcare company 
in the world. 

499
00:24:40,200 --> 00:24:43,560
They are now a medical device 
company with the Apple Watch and

500
00:24:43,560 --> 00:24:45,440
the Airpods. 
They're becoming more medically 

501
00:24:45,440 --> 00:24:47,360
enhanced. 
The Apple Watch is a fitness 

502
00:24:47,360 --> 00:24:51,320
device, a heart rate monitor, a 
sleep apnea detector, and soon I

503
00:24:51,320 --> 00:24:53,160
think it will be a glucose 
monitor. 

504
00:24:53,440 --> 00:24:56,680
The Apple Airpods are now 
hearing aids that are clinically

505
00:24:56,680 --> 00:25:00,440
proven to detect hearing loss. 
So all of their devices and 

506
00:25:00,440 --> 00:25:02,480
peripherals are now becoming 
healthcare. 

507
00:25:02,960 --> 00:25:05,840
So I think overall when I look 
at this, I like the changes 

508
00:25:05,840 --> 00:25:07,720
Apple's doing. 
I like the progress they're 

509
00:25:07,720 --> 00:25:09,480
making. 
I don't think anything here was 

510
00:25:09,480 --> 00:25:12,240
too ground breaking. 
Overall, this was a solid event.

511
00:25:12,320 --> 00:25:15,880
I don't know if it's enough to 
spark a massive upgrade cycle, 

512
00:25:16,160 --> 00:25:18,920
but I think it's enough to keep 
the stock where it currently is.

513
00:25:18,920 --> 00:25:22,640
Now moving on, we get to the 
news that Disney recently had a 

514
00:25:22,640 --> 00:25:25,240
massive data leak. 
And in most cases, when a 

515
00:25:25,240 --> 00:25:28,080
company has a big data leak, I 
don't think there's anything too

516
00:25:28,080 --> 00:25:30,920
interesting. 
Usually companies do share the 

517
00:25:30,920 --> 00:25:33,400
best information publicly about 
the companies. 

518
00:25:33,640 --> 00:25:36,480
They track them in public 
disclosures and KPIs. 

519
00:25:36,840 --> 00:25:39,240
But in this case, Disney did 
leak a couple things that I 

520
00:25:39,240 --> 00:25:42,800
thought were were noteworthy. 
Disney Genie has become a 

521
00:25:42,800 --> 00:25:45,440
massive profit Center for the 
Disney park. 

522
00:25:45,760 --> 00:25:48,520
If you recall back in the day, 
Disney would allow you to get 

523
00:25:48,520 --> 00:25:50,720
fast passes. 
That's what they were called. 

524
00:25:50,960 --> 00:25:54,400
Then Disney decided to make an 
app and monetize the fast pass. 

525
00:25:54,640 --> 00:25:56,200
They turned it into Disney 
Genie. 

526
00:25:56,200 --> 00:25:59,040
The leaked files indicate that 
the passes generated more than 

527
00:25:59,120 --> 00:26:04,760
$724 million in pretax revenue 
between October 2021 and June 

528
00:26:04,760 --> 00:26:06,960
2024. 
So this is the reason that they 

529
00:26:06,960 --> 00:26:10,360
push Disney Genie so hard. 
They're making hundreds of 

530
00:26:10,360 --> 00:26:12,920
millions of dollars from this 
one incremental change. 

531
00:26:13,440 --> 00:26:16,240
I think that this is another way
that Disney has nickel and dime 

532
00:26:16,240 --> 00:26:18,560
people in the park, but it seems
to be working. 

533
00:26:18,640 --> 00:26:22,200
The other big revelation in this
leaked report was the specific 

534
00:26:22,200 --> 00:26:25,600
profitability of Disney Plus. 
Now, Disney releases their 

535
00:26:25,600 --> 00:26:29,240
direct to consumer product line 
and you see how much they make 

536
00:26:29,240 --> 00:26:32,080
from direct to consumer, but 
they do not break it down from 

537
00:26:32,080 --> 00:26:34,880
Disney Plus specifically in this
leaked report. 

538
00:26:34,880 --> 00:26:38,800
We know that Disney Plus 
generated more than 2.4 billion 

539
00:26:38,800 --> 00:26:42,960
in revenue in the March quarter.
That amounts to around 43% of 

540
00:26:42,960 --> 00:26:45,640
the revenue the company reports 
and its direct to consumer 

541
00:26:45,840 --> 00:26:48,000
entertainment business. 
If we look at that and compare 

542
00:26:48,000 --> 00:26:51,440
it to Netflix, we can see that 
Netflix in the last quarter 

543
00:26:51,800 --> 00:26:55,560
generated 9.53 billion. 
So the Disney Plus streaming 

544
00:26:55,560 --> 00:26:58,800
service is around 1/4 of the 
size of Netflix currently. 

545
00:26:58,960 --> 00:27:01,600
This shows us how far ahead 
Netflix actually is in the 

546
00:27:01,600 --> 00:27:03,640
streaming business. 
Now, of course, there's more to 

547
00:27:03,640 --> 00:27:05,720
this leaked document. 
There's how they handle 

548
00:27:05,720 --> 00:27:08,640
different political events as 
well as how they promote and 

549
00:27:08,640 --> 00:27:10,640
compete against companies like 
Netflix. 

550
00:27:11,080 --> 00:27:13,920
I looked through it and there's 
not anything I thought was too 

551
00:27:13,920 --> 00:27:15,520
interesting. 
So that's going to be it for 

552
00:27:15,520 --> 00:27:17,360
this episode. 
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553
00:27:17,360 --> 00:27:19,880
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554
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555
00:27:22,080 --> 00:27:24,680
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That's all for now. 

556
00:27:24,880 --> 00:27:25,680
See you in the next one.