Jerome Powell steps down from the throne (but surprisingly not from the castle)

1️⃣ Jerome Powell leaves the throne but not the castle

The Fed kept interest rates in the 3.50% - 3.75% range as expected. Powell, in his last meeting before handing over the position to Kevin Warsh, made it clear that inflation continues to be that guest who doesn't take the hint and doesn't want to leave the party.

The real gossip is that although J-Pow will step down as Fed chair on May 15, he decided to stay on as FOMC governor, a term that expires in 2028. It was a very Wolf of Wall Street moment: “I'm not f@#ing leaving 🎤”.  

It seems there won't be rate cuts anytime soon, but there will be a monitored new chair, as much or even more monitored than the inflation and unemployment rates themselves.

💡 What you should know: Generally, when a Fed chair's term ends, they decide to leave 100%. That has been the case since 1948 and was what was normally expected this time. Powell didn't want to follow that tradition, and not because he loves the Fed office so much, but because he wanted to send a direct message of his distrust regarding a possible loss of independence. Additionally, he could be the "adult in the room" offering some calm to the markets ahead of the more aggressive style expected from Warsh.

2️⃣ Musk vs. OpenAI: Depp vs. Heard 2.0

On Monday, jury selection officially kicked off in Oakland for the legal battle between Elon Musk and OpenAI. Musk alleges that the company abandoned its non-profit mission to become a "money-printing machine" for Microsoft, and OpenAI says Musk is a competitor who is using his resources to block his competition.

Musk said he created OpenAI to serve as a counterweight to Google, which according to him, did not take artificial intelligence safety seriously. Musk shared that he had a discussion about the topic with Larry Page (Google co-founder) who called him a “specieist” for defending humanity.

OpenAI's defense pretty much boils down to Elon just being jealous because his own model, Grok, still doesn't know how to tell a good joke. 

💡 What you should know: Musk wants Sam Altman (CEO of OpenAI) and Brockman (President) to be removed from their positions and for OpenAI to reverse its transformation from being a for-profit company. The outcome of the trial could delay OpenAI's IPO and change how non-profit companies are structured in the future.

3️⃣ Alphabet reaches the clouds (almost literally)

Alphabet's earnings report left analysts looking like frozen fish, more or less like this: 👁️👄👁️ 

Revenues rose by 21.8% to $109.9 billion, driven mainly by the search business and Google Cloud, which is no longer the search engine's little brother. Google Cloud is a cash-flow generating machine thanks to companies running their AI models on Google's servers.

To understand it: Google is like the owner of the largest mall in the world. Not only does it charge for every ad you see in the hallways, but now it also rents the tools to all tenants to keep their cash registers running. And this quarter, everyone paid on time and with a tip.

It increased its dividend by 5%, though it also increased capital expenditure for 2026. In this video, we tell you the details and share our opinion. 👇

4️⃣ Amazon opens a warehouse on the moon (figuratively, obviously). 

Amazon also delivered a surprising report with revenues of $181 billion, a 16.6% increase, driven mainly by AWS which grew by 28%, the highest rate in the last 15 quarters.

If Alphabet in our previous example was the owner of the largest mall in the world, then Amazon is the circulatory system of modern capitalism: if you want to buy a toothbrush at 3 AM, they bring it to you; if you want to train an AI to write poetry, they give you the server. Its operating margin improved so much that it seems they've learned to teleport packages.

And yes, we also made a video about it. Which, by the way, is fresh out of the oven👇

5️⃣ Meta and Microsoft were the losers of this season

Both reported on Wednesday, confirming a trend: AI is expensive, but it's worth it. 

Meta reported revenue growth of 33% to $56 billion, while Microsoft reported 18% to $82.9 billion. Quite impressive, honestly.

But both companies announced capital expenditure plans higher than projected last quarter, which was already historically high. And while Alphabet did the same, Meta and Microsoft had a few factors working against them.

Meta's daily user base missed expectations, and the market still has a bad taste in its mouth regarding Reality Labs' losses.

Microsoft, for its part, continues to blame physical constraints for increasing short-term sales, and also warned that Windows revenues are going to decrease by ~20% due to the slow PC market and the increase in memory component prices.

💡 What you should know: Although they make a lot of money, Wall Street is nervous about how much they are spending and whether the return will be significant; this is the case for these 4 Big Tech companies. Incredibly, it is somewhat similar to personal finances—it's as if your cousin wins the lottery but buys a private jet the next day; you're happy for him, but you wonder how long his full tank will last.

👀 Next week we will publish videos on these 2 giants. We hope to see you on the channel.