Goldman Sachs analysts assert that President Trump's tariffs will predominantly affect companies' operational expenses, such as headcount and marketing, rather than artificial intelligence (AI) investments. Eric Sheridan from Goldman Sachs highlights that competition in AI among various stakeholders will help sustain spending in this area despite rising costs from tariffs. Meta, as an example, has raised its capex guidance while signaling that AI remains a top priority. However, the company has also reduced overall expense forecasts, suggesting a focus on efficiency while safeguarding significant investments in AI initiatives.
I think the macro will end up with more volatility on operating expenses - that's head count, that's marketing spend, that's very, very long duration projects.
I think given the sheer number of players investing both offensively and defensively at AI, I think this spend will get protected for a little longer than the macro environment might influence it.
The messaging coming out of the company was, 'We continue to find ways to find efficiencies inside the organization, but we are not at a point where we want to sacrifice long-duration investments, mostly articulated through capex, just because the macro environment could look a certain way for three, six, or nine months.'
AI is the major theme for Meta right now.
Collection
[
|
...
]