A growing trend in the tech sector involves activist investors targeting companies with depressed stock prices but stable growth and free cash flow. These activists, like Elliott Investment, are launching campaigns to pressure management into making operational changes or pursuing a sale to a private equity firm, seeing an opportunity to unlock value.

Snap's valuation languishes despite a massive user base because of its extreme stock-based compensation ($2.5B in 12 months). This financial tactic inflates adjusted profits while massively diluting shareholders, revealing a fundamental disconnect between user growth and actual investor value creation.

The true ROI of AI lies in reallocating the time and resources saved from automation towards accelerating growth and innovation. Instead of simply cutting staff, companies should use the efficiency gains to pursue new initiatives that increase demand for their products or services.

Meta's acquisition of AI agent company Manus may be focused on serving advertisers, not end-users. The goal is to let businesses state a high-level objective, like acquiring a customer, and have AI agents automate the entire funnel from ad creation to final sale, streamlining operations for Meta's true customers.

When Block's stock soared 25% after announcing 40% staff cuts attributed to AI, it sent a clear signal to Wall Street. This creates a powerful incentive for other companies to execute long-desired headcount reductions, blame AI for efficiency gains, and get rewarded by the market with a massive stock pump.

Meta benefits from a "do nothing, win" position in consumer-facing AI. The company can avoid costly R&D for new social features, knowing that any successful AI-driven application developed by a competitor can be quickly replicated and scaled across its massive user base, similar to how it handled Stories.

Snap's $400M deal with Perplexity, paid largely in stock, pioneers a new strategy for consumer platforms. They can leverage their massive user bases as a capital asset, trading distribution for significant equity stakes in capital-rich AI startups that desperately need user growth.

Square's recent 40% reduction-in-force is not an anomaly but a leading indicator. As AI delivers 30%+ annual productivity boosts, most public companies will be compelled to make similar large-scale cuts over the next 18 months. Companies that don't will face questions about their leadership and efficiency.

While consumer-facing AI grabs headlines, Snap's CEO is more excited about the potential for agentic AI to transform internal business operations. He sees the biggest near-term impact in driving massive efficiencies for small and medium-sized businesses across functions like sales, bug reporting, and client management.