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Comment by paxys | Hacker News Reader

Square/Block stock peaked at $273 in Feb 2021 and is currently at $54. Taking away the Covid bubble the stock has been completely flat since 2018, almost 8 years, while the S&P 500 returned nearly 200% in that same period. So I'm not buying the whole "the company is doing great! The layoff is just because of AI."

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We know they're not...

> In its fiscal fourth quarter, Block reported revenue of almost $6.3bn, in line with Wall Street expectations. Its earnings tumbled to 19 cents a share, owing to a $234mn hit — or 38 cents a share — on its bitcoin holdings.

Yea, look over there!!! AI.

(Don’t mention the bitcoin investment that’s in the shitter)

The bitcoin investment had 2/3/4x'd at that point - so the negative 75% means the business is the shitter.

If AI makes people twice as productive and you're a mature software company chasing marginal value, if the marginal value people added was worth it before AI, surely more marginal value at the same cost is better. It's also the wrong side of the AI curve to be on. Maybe AI will replace dev jobs, but why not wait to find out? And if it does, prompt-coding is a different skill than traditional coding, and it's not what you interviewed people for, so you don't even have a guess as to if you're keeping the right people.

> It's already the wrong side of the AI curve to be on. Maybe AI will replace dev jobs, but why not wait to find out?

Have you considered their internal use has already proven AI's capability to them?

The sense was that it got a lot better late last year. There hasn't been enough time to make this call holistically, from development to market reaction to turndown. It also doesn't address the Jevons paradox take that with more people and AI, they can get even more done. Every place I've worked has had an idea and tech debt backlog far deeper than the companies' capacity.

AI is the logical, counter proof reason, I feel it serves as a scapegoat so perfectly they pretend it replaces people.

Exactly this. Seriously, look at a 10 year graph of SQ/XYZ. How a board of directors puts up with this is beyond me, seems like a massive governance failure.

If AI were that impactful, they’d re-organize and double their output of quality products instead of laying people off.

Feb 2021 was peak covid tech bubble stemming from ZIRP. There are a number of companies that hit highs during that period that they'll likely never see again (or for quite some time) despite being profitable.

There are, but there are also a number of companies (including not-particularly-AI ones like Netflix and Oracle) that are above their ZIRP peak. I think it's hard to definitively say that this story is inconsistent with one explanation or the other.

Oracle is definitely an AI stock, as much as that's silly. Between being a cloud provider with GPUs, and investments in OpenAI, it's certainly part of the AI meme in the stock market, and possibly even a reasonable way to get some AI exposure if that's what you want to invest in.

Owning SP500 gives me too much AI exposure by default

2021 was when Square pivoted to Block in the great Blockchain pivotting

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