I wrote about Meta’s (META) Muse on Monday and how impressed I am with the artificial intelligence (AI) agent’s capabilities. I gave it a trial run last weekend, and it did a great job with my calendar and social media accounts.
However, I also noted that I wasn’t sure I wanted to give it access to my credit cards and bank account – even though that would simplify my life further. Naturally, the more you allow these AI agents to see into your life, the more they’re able to do for you.
Yet Meta has a very long history of being dishonest. I won’t go into the whole list here. (That’s what my Monday article detailed.) But suffice it to say that Mark Zuckerberg and his company don’t have the paying public’s trust.
Truth be told, nor does social media in general, as evidenced by TikTok’s settlement with the state of Alabama this month. To quote that state’s official page:
Under the settlement, Alabama will receive a minimum of $100 million, due to the state within 45 days, with the potential to receive up to $300 million if certain conditions are met.
In addition to the payment, TikTok must implement a host of safety features designed to protect children using its platform. The agreement resolves Alabama’s claims that TikTok designed its platform with addictive features, knowingly exposed young users to serious mental harms, and intentionally misled the public about the safety of its platforms, among other things.
Obviously, every company wants to make money. And obviously, that money is most easily made via consistent customers. But there should be ethical restraints involved in maintaining that traffic, which is why we’re seeing the lawsuit pushbacks we have this decade.
Something tells me they’re not over yet. Probably not by far.
A somewhat unwanted payoff
We all know that public sentiment about data centers isn’t favorable. People are concerned about their water usage, their effect on local power grids, the noise they make, and the fact that they don’t ultimately create many full-time jobs.
Newer data centers are able to recycle their water, so that’s taking care of that problem. But this is only going so far in relieving fears, as evidenced by NorthPoint Development’s proposed 1,300-acre facility in a little town near Hazle Township, Pennsylvania.
You’ve probably never heard of that location before. Being several states removed, I certainly hadn’t. So let me just say it’s in the Poconos, a beautiful mountainous area known for its scenic trails, luxurious resorts, and family-friendly activities.
It’s therefore no surprise that residents wouldn’t want to mar their simpler way of living.
However, NorthPoint really wants to build there – so much so that it’s offered $10,000 each to 4,500 local households if the data center is approved.
That would be a big deal for most Americans. But it’s especially large for this area, which has a median household income of just $60,000.
Sleepy little town though it is, it’s gaining national attention ever since The Wall Street Journal broke the story. That publication reported that some residents appear “eager to welcome the data center for the payout.”
Not so much for others though.
They didn’t like the notion when it was first proposed last year, and they’re still against it even with the enormous incentive. They’re also against it with added promises for up to $120 million for the community and local services over the next 15 years.
In which case, I don’t think they’re budging no matter what. If there are enough of these holdouts at the next meeting, NorthPoint is just going to have to find another place to build.
Pepsi-Cola is driving industrial demand
Last week, I wrote about Coca-Cola (KO) and how it’s “driving industrial demand.”
Like many other companies under Trump’s second term, Coca-Cola (KO) is betting on America. For its part, that means a $10 billion infrastructure buildout planned through 2030 that includes manufacturing, distribution, processing facilities, and offices.
It has that kind of money to spend (with some borrowing involved, of course) considering its balance sheet and yearly performance so far. For instance, net revenue grew 7% in Q2 to $13.4 billion and earnings per share (EPS) grew 16%. Plus, Coca-Cola is confident enough in its future that it raised its full-year EPS guidance from 8%–9% to 9%–10%.
Rival PepsiCo (PEP), however, isn’t doing so well. Or at least JP Morgan analyst Andrea Teixeria doesn’t think so. She just dropped the company’s rating from Overweight to Neutral on Tuesday. And she marked down her profit estimates for the next two years as well, writing:
The upcoming quarter may still show a decent top- and bottom-line, especially with international [business] likely performing well on favorable weather tailwinds and a strong FIFA World Cup. However, excluding these non-recurring tailwinds, judging from the tracked channel and recent price increase announcements, we believe trends in North America have likely continued to underperform management expectations.
In particular, Teixeria called out the company’s “salty snacks” selection, which has shown lackluster sales “in our view.”
In all fairness to the company, PepsiCo reported much better than expected revenue of $24.2 billion in the second quarter, up 6.4% from Q2-25. However, North Americans were notably pulling back on products thanks to high gas prices.
Will that weakness go away once the Iran War is finally settled? Quite possibly, making the harsh analysis unwarranted.
Then again, Teixeria is very well-connected with access to a whole lot of information. So let’s just say we’re hoping for the best for Pepsi – and leave it at that for the time being.
Happy SWAN investing,
Brad Thomas
Editor, The Wide Moat Daily
