Supports Google's equity raise; views the dilution as positive because investors believe in its returns on capital.

We heard this story before, but it was with Google just a week ago. And I'll be going over why I support Google's equity raise and I do not support Meta's equity raise.

One of them from the repeated AI skeptic and AI bear which is Gary Marcus tearing apart Google in a viral tweet saying that Google is building out a commodity which is AI.

When I look at my portfolio, I'm heavily invested in artificial intelligence through four hyperscalers. We have Meta, Google, and Microsoft, all spending hundreds of billions of dollars in capex.

Between those companies, Meta, Microsoft, Amazon, and Google, we have the majority of AI spend, the companies funding this big capex buildout.

But as he highlights here, Google, Meta, Microsoft, and Amazon are becoming more capex heavy. One, everybody, even Google, seems to be treating AI as though it's some kind of winner take all competition like web search was in which Google was taking over 95%.

the next month it might be Google's Gemini

Again, before AI even took place, before we had the first Gemini model publicly released, Google Cloud was growing quickly. It was growing year-over-year at a fast pace, mostly selling the same thing that Amazon Web Services was selling, mostly storage and IT infrastructure.

Now, on this note, we have the news that Meta is weighing a big equity raise. This is similar to what we heard with Google. In fact, it looks a little bit like Meta is just copying Google.

They've seen that Google is going to get a lot of money by diluting shareholders by like 1.8%. And Meta is saying maybe we can do the same thing.

Now, I hold both of these companies, Meta and Google. And I believe in the case of Google, this delusion is a good thing. But I do not like it for Meta. And I hope that they don't end up doing this for a couple of reasons.

When we look at the Ford PE of Google, it's currently sitting right around 30. So Google's at a 30 Ford PE.

The next thing is that I just believe that Meta investors will react far more poorly to this news than Google. Not only because the dilution would be far more expensive, but because right now investors in Meta are a little bit more concerned about the return on capital than Google.

Google has somewhat proven that they're going to have decent returns on capital, or at least investors believe that. But with Meta, that's still a big question mark. So, I think this could actually hit the stock price in a far more negative way for Meta than it did for Google.

So, even though this is just rumored news, I'm hoping that Meta finds a different way of raising capital than diluting shareholders.