This time around, Mark Zuckerberg is happy to let someone else get in the ring with Elon Musk.

On Tuesday, Zuck’s Meta empire completed its 17th straight day of share price gains, good for the longest winning streak of any current Nasdaq 100 Index component since 1990, according to Bloomberg data. It’s a sign that Meta has emerged — perhaps surprisingly — as the big winner in the AI sweepstakes.

Insta Gratification

Meta’s metaverse pivot just a few years ago may have been a big whiff, but its pivot to massive AI investment is paying off. Why? Because it actually enhances Meta’s core business. The tech industry has poured tens of billions into developing and deploying consumer and enterprise-facing AI models, mostly in the form of chatbots. The problem, of course, is the lack of an actual, profit-generating business model. OpenAI, for instance, says it’s losing money on its $200-per-month ChatGPT Pro subscriptions. And when the open-source DeepSeek came along and proved you could get just as much juice for a lot less squeeze, well… you know the rest.

Meta, on the other hand, found its open-source approach to AI validated by DeepSeek, and the company has been integrating AI into what is already the ultimate profit-generating business model: targeted advertising. (And, sure, it has also debuted quite a few somewhat unseemly chatbots along the way). In other words, AI is helping Meta serve up even more clickable ads. So far, it’s meant a pretty quick return on investment — or at least, enough return to keep justifying copious investment:

• In its earnings report two weeks ago, Meta announced that its full-year revenue — nearly 98% of which comes from advertising — increased 22% year-over-year to $164 billion in 2024; net income increased 59% to $62 billion. 
• Revenue growth may reach 15% this year, per Bloomberg data, while net earnings growth may accelerate from 6% this year to 15% in 2026. It all makes the planned $65 billion in capital expenditures this year look digestible, especially as Meta still trades around just 27 times forward earnings — roughly on par with the Nasdaq 100 and lower than any Magnificent 7 stock other than Alphabet.

Still, not everyone will be along for the ride through what Zuckerberg has dubbed a “really big year” for AI (and, we’re assuming, a big year for “masculine energy,” too). On Tuesday, Meta began a round of deep layoffs, targeting around 4,000 employees, or around 5% of the company’s total headcount. 

Mr. Vance Goes to Paris: Across the pond, world leaders are meeting in Paris this week for an AI summit. As European Union leaders trumpet a plan to attract some €200 billion in investments in the bloc’s AI industry (not long after Trump 2.0 announced the $500 billion AI-focused Stargate fund), Vice President JD Vance on Tuesday delivered a big speech centered around a big theme: deregulation. Let’s keep the AI bubble safe for all mankind.

It’s a CEO’s worst nightmare and, numbers suggest, a shareholder’s dream come true: Elliott Investment Management is outside with a boombox, demanding attention.

The ever-persistent gadfly of Wall Street, arguably its most feared and fearsome activist investor, disclosed a $2.5 billion position in oil refining giant Phillips 66 on Tuesday, with plans to push for operational changes. Meanwhile, another oil sector giant, British supermajor BP, announced plans to “fundamentally reset” with its own threat from Elliott looming.

Boardroom Busters

For the top brass and boards at publicly traded companies, activist investors are a routine fact of life. Elliott, on the other hand, is on something of a swashbuckling hot streak, like when Steph Curry gets in rhythm and starts hitting shots from distances unfathomable to mere mortals.

In the last year alone, Elliott has played a central role in pushing out a CEO at Starbucks over declining sales and convincing industrial conglomerate Honeywell that it needed to break up to boost its valuation. It also pressured Southwest Airlines to hand it five board seats and Tinder-owner Match Group to fork over two — no “truce” without a seat at the table.

So when Elliott made its latest slick moves in the oil sector, markets took note:

• BP shares rose 7% on Monday, the first trading day after a Bloomberg report on the weekend said Elliott had acquired a stake for an undisclosed amount. Investor optimism — BP shares are down roughly 18% from a February 2023 peak, making it one of the worst performers on the Stoxx Europe 600 Oil & Gas Index — was spurred by hope that the activist would prompt changes or else threaten to cull the boardroom, revamp management or even break up the slumping oil giant.
• A day later, BP CEO Murray Auchincloss promised to “fundamentally reset” the company’s strategy after announcing a sharp deterioration in underlying annual profits to $8.9 billion last year from $14 billion in 2023, excluding interest and tax. Auchincloss hinted the “new direction” would include a “more capital-light” approach to renewables (corporate-speak translation: BP will spend less money on them) and a doubling down on fossil fuel developments — he declined to comment on the Elliott stake.

At Phillips 66, where shares are down 11% in the past 12 months, Elliott escalated a campaign that began with a $1 billion stake acquired in 2023. On Tuesday, Elliott said management “failed” to improve operations and advocated for the spin-off of Phillips 66’s midstream business. The midstream unit makes money transporting commodities, meaning it is more insulated from price fluctuations than its oil refining or production business and could command a premium price.

No Pain, No Gain: Elliott has taken stakes in 80 companies since 2020, and just under 95% of them saw their shares climb — at an average 5.5% return — on the day the stake was disclosed, according to Bloomberg data. More than two-thirds of those companies had kept their gains a year later, rising an average of 35%.

If you invest your tuppence wisely in the bank, you can spread it across three monthly payments — though your affluence may not expand.

JPMorgan Chase announced it has struck a deal with Swedish buy-now-pay-later startup Klarna to add its BNPL services to JPMorgan’s payments platform. This comes as Klarna is gearing up for a US IPO, and as regulation of the BNPL sector hangs in the balance post-Trump.

Give Them Some Credit

The BNPL industry has been a target for lawmakers and regulators, the more hawkish of whom wish to see BNPL services regulated with the same rigor as the credit card sector. In the UK, which Klarna snubbed as its IPO location, the government outlined rules in October mandating that BNPL companies undertake affordability checks before taking on customers — although Klarna and friends have some wiggle room, as the rules aren’t set to kick in until next year.

In the US, however, the future of BNPL regulation is more ambiguous. The Trump administration, with the help of its slasher-in-chief Elon Musk, just sidelined one of the agencies responsible for regulating consumer financial services, the Consumer Financial Protection Bureau. Acting CFPB chief Russell Vought, who in videos obtained by ProPublica said he wanted to put federal bureaucrats “in trauma” (did someone say “dream boss”?), shuttered the agency’s headquarters on Monday and told staffers to refrain from performing “work tasks.” For JPMorgan, the deal with Klarna also represents something of a change in direction:

• In October last year, JPMorgan Chase banned credit card customers from using their cards to repay BNPL loans from companies including Klarna and Affirm. JPMorgan Chase said in a statement at the time that BNPL services are a “form of credit,” and that the company generally doesn’t allow customers to pay for credit products via their credit cards.
• Last August, Klarna launched its own consumer bank account product to compete with the likes of JPMorgan Chase, even offering interest to EU customers. “We are a bank, so this is the natural evolution,” Klarna CEO Sebastian Siemiatkowski told Bloomberg. “We are moving into a world with increased competitive pressure with retail banking services,” he added. Siemiatkowski also said the company is toying with getting itself a US banking license.

Positive Affirmation: Klarna isn’t the only one playing while the regulators are away. In its most recent quarterly filing earlier this month, popular BNPL platform Affirm reported a 23% increase in its consumer base year-on-year. Revenue, meanwhile, was up 47% over the same period.