Weekly Notes #8
Salesforce, the transformation of a human lizard, keeping secrets and finding inspiration
I hope you are having a fantastic week and you are looking forward to learning something!
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In case you want to re-read the previous weekly notes, here is the link
Without further ado, let’s start:
First things first
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Salesforce Q2 earnings release
My take on the latest earnings release from Salesforce: encouraging
Revenue +9%, RPO 26.5bn (+10%); 4.3bn in share repurchases in the quarter, YoY the number of outstanding shares declined by 1.3%. CFO Amy Weaver will leave the position after 3 years. Gross margin increased to 76%, operating margin to 20%. Workday is the first Agentforce Partner.
Here are some interesting quotes from the earnings call:
It's going to turn this into these incredible margin and revenue machines...we're making it easy to build these powerful autonomous agents for sales, for service, for marketing, for commerce, automating the entire workflow on their own, embedding agents in the flow of work and getting our customers to the agent future first. And this is our primary goal of our company right now. This is my singular focus.
delivering 25 trillion Einstein transactions across all of the clouds during the quarter, that's 25 trillion and more than 1 trillion workflows are now managing 250 petabytes of data for our customers.
This is not Copilots. So many customers are so disappointed in what they bought from Microsoft Copilots because they're not getting the accuracy and the response that they want. Microsoft has disappointed so many customers with AI. Listen, these agents are autonomous. They're able to act with accuracy. They're able to come right out of the box.
One of the reasons that our agents are so accurate is because of the huge amount of data and metadata that we had. And data is the foundation for every AI transformation. And with Data Cloud, we're providing a high-performance data lake that brings together all our customer and business data, federating data from external repositories through this credible zero-copy alliance.
nearly 80% of our new business in the quarter was driven by multi-cloud deals
The last point is this, these customers, they're still going to build models, but it's in our platform. They're still going to fine-tune those models in our platform. They're going to still use our AI studios and build their own prompts in our platform.
In my last earnings release post I shared this chart screenshot with a price of 218$ per share. I believe that at 288$ Salesforce is still very fairly attractive. I personally initiated a large trading position on top of my long-term investment position in July and I am very happy with how it is playing out so far.
Mark Zuckerberg’s transformation
I am fascinated by how Mark Zuckerberg (the CEO of Meta, former Facebook) turned his public image around. He used to look like a human lizard and now has the image of a hip-tech guy. I love having him as the CEO of one of my largest holdings and he has a long runway ahead.
These two people look totally different, yet they are the same person, just 2 years apart.
Apart from the change in his public image, Zuck has always been a visionary. Facebook shared this road map for the next 10 years back in 2016:
It is amazing how many things became a reality. Instagram is dominating the social media presence and AR/VR is currently a major driver of Meta’s R&D spend. Meta’s AI tools are getting more and more powerful by the day. I would love to see what Meta’s road map for the next 10 years looks like.
How to keep your secret
Apple is known to have great product release events. Steve Jobs showing the world the first iPhone was one of these events: A fantastic presentation for a device that would go on to change the world as we know it.
The amazing thing about Apple (and to some extent other companies) is that most major releases are not being fully leaked before the planned presentation. Considering the sheer amount of people working on these topics it is an incredible feat. Of course, this is no coincidence. Teams work on separate tasks and sometimes don’t even know of the existence of another team.
Apple uses a handful of tricks to track down the source of a leak:
The following quotes are from this article: https://9to5mac.com/2023/05/11/how-apple-catches-leakers/
In fact, one section of it is #0D0D0D instead of #000000. By making changes as subtle as this to different pixels, you can create a near-infinite number of variations, each of which would be impossible to distinguish by eye.
Only if you zoom in really close on this black square, you will see how a small portion is not as black as the rest of it
Document serial numbers is another variation. For example, when Apple shares videos with employees, each is watermarked with an ID number which is likely cross-referenced with the Apple Connect ID of the member of staff.
Tesla used a similar strategy when they sent a critical email to some employees and each email had a different double space between the sentences. This made each email unique and the employee who leaked the critical information was identified.
Invest in companies under antitrust scrutiny
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