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Prof G Markets: Project Stargate & The Rise of Oracle + Scott’s Stake in La Equidad Football Club

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January 27, 2025

TLDR: Scott and Ed discuss Netflix's Q4 earnings, Johnson & Johnson's latest earnings call, potential TikTok bidders, the new Stargate initiative as a strategic branding victory for the Trump administration benefitting Oracle in tech industry, thoughts on AI evolution, Scott's stake in a Colombian soccer team and its relation to his investment strategy.

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In this episode of Prof G Markets, Scott Galloway and Ed offer a deep dive into significant developments in various industries, featuring a conversation about Netflix's impressive growth, Johnson & Johnson's earnings, the potential sale of TikTok, and the launch of Oracle's fascinating new venture, Project Stargate, along with Scott's personal investment in a Colombian football club.

Key Takeaways

Netflix's Impressive Earnings Report

  • Subscriber Growth: Netflix added a record 19 million new subscribers in Q4, indicating a remarkable 44% growth year-over-year.
  • Financial Performance: The company beat expectations with a 60% increase in net profits, and its operating margins improved significantly.
  • Pricing Strategy: Netflix raised prices on all its subscription plans, with the premium subscription now costing $25/month—a stark contrast to the $5 difference seen ten years ago. This has raised concerns about "inequality pricing", where premium offerings cater primarily to wealthier customers.

Johnson & Johnson's Earnings Call Insights

  • Financial Performance: Johnson & Johnson reported $22.5 billion in sales for Q4, a 5% year-over-year increase. However, the stock fell due to lower-than-expected guidance.
  • Lack of Accountability: Scott and Ed noted the company's failure to address the rising costs of healthcare in America during its earnings call, sparking discussion about the pharmaceutical industry's role in these costs and the lack of regulatory action.

The Potential Sale of TikTok

  • Bidding War: High-profile figures, including MrBeast and Kevin O'Leary, are entering the fray to bid for TikTok, igniting interest in the competitive landscape.
  • Experts’ Predictions: Scott emphasized the importance of capital, compute capabilities, and potential influence from the Chinese Communist Party (CCP) as critical factors determining the future owner of TikTok.

Project Stargate: Oracle's Bold Move

  • Venture Overview: Launched with the support of major players like OpenAI and SoftBank, Project Stargate aims to invest up to $500 billion in creating data centers focused on AI.
  • Strategic Branding: Scott believes that the Trump administration smartly branded existing initiatives as part of this project, asserting influence over tech developments.
  • Impact on Oracle: Scott posits that this initiative could elevate Oracle’s profile significantly in the AI space, suggesting it may become a key player in a future tech oligopoly.

Scott's Stake in La Equidad Football Club

  • Investment Background: Scott shares his excitement about joining a group of celebrity investors, including Ryan Reynolds and Eva Longoria, to acquire La Equidad, a Colombian football club.
  • Personal Motivation: His passion for football and the opportunity to create meaningful community engagement through sports ownership drove his decision to invest.
  • Investment Strategy: Scott articulates a broader strategy of diversifying away from U.S. assets to invest in international markets, highlighting Columbia's growing economy as a favorable backdrop for his investment.

Conclusion

The Prof G Markets podcast covers substantial financial and corporate topics while weaving in personal insights and anecdotes from Scott and Ed. From Netflix's growth strategies to the emergence of Project Stargate, listeners gain a multifaceted view of ongoing market shifts and investment opportunities, all while enjoying engaging banter from the hosts. This episode not only informs listeners about market trends but also invites them to reflect on the implications of changing dynamics in tech and investment landscapes.

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