WBGB?

@P_Remarks The market is smarter than you no matter how many times you’ve taken my mom down

@P_Remarks Step 1) the market reprices stocks based on what new info says about the future Step 2) p remarks cries about it because his value traps trade down again

@DanteTheDon You’re not very smart Dante

HAPPY MONDAY EVERYBODY!!!!

@negligible_cap Such an incredibly bland take. Would like to hear his view on why #1 could happen, if he has one

Hyperscaler FCF is expected to more than double in the coming years. What are the consequences if AI capex’s payoff takes longer than consensus expectations? Apollo’s Torsten Slok lays out the consequences / if token prices continue their declines and Chinese models keep gaining ground: “What are the consequences if the AI payoff comes slower than expected in the first chart? 1) Cash flows and earnings disappoint: the projected free cash flow surge slips later while committed capex and heavy depreciation hit on schedule, squeezing margins and marking down the forecast in the first chart. 2) A Mag 7 sell-off that takes the market with it: equity prices built on a fast payoff re-rate, and because the Magnificent 7 now account for so much of the indices, the pain can't stay contained, it spreads to chips, power, data centers and the S&P 500 as a whole. 3) Balance sheets stretch and credit risk rises: with internal cash unable to cover spending, hyperscalers lean further on debt, raising leverage and inviting possible ratings downgrades if profits lag. The bottom line is that AI has been the one thing holding up both the economy and markets, and with so much riding on so few names, a slower payoff wouldn't just be a sector problem, it would risk tipping the economy into recession and the S&P 500 into a correction.” Nothing really new here but nice chart on FCF consensus from Torsten:

@zerohedge That’s awesome. That’s called capitalism

Zuck: “The pricing from some of the other labs is very extreme and has very high margins. We think that there’s a real ability to be able to offer frontier or very high-level intelligence at a much more affordable cost.” Epic pricing war breaking out among agentic models.

@negligible_cap @P_Remarks

$SBUX is vibecoding software like inventory systems from $MSFT and maintenance trackers from $IBM SAAS bears foaming at the mouth.

@negligible_cap These initiations are laying bare what the true incentives of sell side are

These $SPCX initiations are wild. In 2031, JPM sees 5000 starship launches (almost 14 launches / day) and sees 75GW of orbital compute put in place. “SpaceX’s ambitions—and potential impact on humanity—are bigger than any company’s we’ve ever seen. Launch capabilities and rapid reusability of Starship are at the core, and we project Starship launches will ramp from a handful in 2026 to ~5,000 in 2031, enabling SpaceX to build out massive orbital compute—75GW in 2031—as the company targets a $28T+ TAM. We project a 91% 5-year revenue CAGR from 2025-2030, along with significant margin expansion as the composition of the business shifts from Connectivity to AI, first terrestrial, and then orbital. While SpaceX has already reached a $2T+ market cap post its IPO, we believe significant upside potential remains as the company quite literally builds out the next frontier.” -- JPM

@P_Remarks How much bigger has the market grown from the first to the second?

@DratchCap Well they are already trading at super depressed multiples aren’t they?

If people really believed we were moving to a period of “excess compute”, $googl $msft $Amzn would be down big on account of their 2nd new multi trillion dollar cloud competitor in <1mo. Inconsistency like that is a good indicator of signal vs noise, imho

@negligible_cap It’s 1000% the latter

It’s going to be a fun day to watch $META investors META bulls will say they’re actually monetizing their infrastructure in a concrete way now, boosting rev, margins, cash flow etc META bears are going to shit on how Zuck transitioning to a CSP means an admission of guilt that they overbuilt capacity and that their internal AI initiatives are failing, despite spending billions on AI researchers and infrastructure. Either way, excess compute supply for $META is going to smoke neoclouds, whether justified or not. $CRWV and $NBIS both off around 10%

@negligible_cap The enitrery of the markets eps growth is coming from balance sheet of the hyperscalers. Why it’s always so funny that ppl cite earnings growth as a bullet proof reason why the market will continue going up

"AI infrastructure stocks are expected to contribute nearly 60% of S&P 500 EPS growth this quarter. The top 10 contributing stocks are expected to account for nearly 75% of aggregate S&P 500 earnings growth in Q2" - GS

@P_Remarks Supply will come

@zerohedge ZH turning into the inverse Cramer

*S&P 500 TURNS NEGATIVE *NASDAQ 100 TURNS NEGATIVE

@P_Remarks @FundamentEdge Bruh

@HatCeltics @FundamentEdge There was non stop crying coming from your moms room last night

It is easy as a stock picker to blame the external environment. "My portfolio sucks because the market is all about AI and retail flows". I had an experience with this early in my career that stuck with me. The investment team was bemoaning the macro driven market (this was '08/'09), citing high correlations as a challenge to L/S spread generation. The head of the fund responded with a table of realized stock price dispersion, "our job is to, ex-ante, identify the winners and the losers...and I don't know about you, but I see a lot of spread potential in this analysis". The message was clear: winners don't complain, they figure it out. This was a clear pattern I saw in the best PMs I worked with over my career. They didn't complain, they just figured it out. The job of a L/S PM is to find spread between longs & shorts, wherever it is. They adapted to the market environment when necessary. I saw this in real time when I was a PM at a large multi-manager. Sure, great PMs would have drawdowns as market conditions would change, but they were flexible when needed, flowing with the market regime to make money in new ways. Sort of the antithesis of the calcified value investor "I have one way of making money, buying cheap assets, and I'll go to my grave doing so". And even in this AI & retail driven tape, there is plenty of evidence of dispersion. In my healthcare coverage of 152 names, 75 of them have of them have hit threshold returns this year (longs up over 25% and shorts down over 15%), only halfway through the year. A few of these are AI-influenced, but the vast majority are idiosyncratic and business/industry driven moves that could have been identified with the right research (of course, it's always clear in hindsight). There is plenty of spread potential in this tape, you just have to find it. (Caveat: it's insanely hard. But it should be, as the rewards to consistently generating 5%+ long/short spread in equities are immense. And I fully grasp that I am shouting this message from the sidelines, not "in the arena", so evaluate this message as such)

@DratchCap His takes are 100% emotionally driven

ZeroEdge reposting his 5/25 bear takes after memory stocks mooned since is just LOL. Bad follows, like bad research, can be v expensive…

@DratchCap Agreed. Then you have to admit OpenAI delaying its ipo because of ipo volatility is a cover up for some other reason

Why can’t the answer be that they are earning fine ROIs (whether they match or exceed historical levels TBD) but they are the only Ai stocks with (structural) sellers? They are selling their own stock, indexes are selling to rebalance, and some funds have concentration limits. Add in the opportunity cost of capital (there’s lower mkt cap companies with more exciting ‘art of the possible’ cases in a tech paradigm shift), and you have some meh 7 action. Plus they are on the other side of the IPO trade (more selling to fund etc) The HF brain stuff about how they will pull back on capex bc their stocks are having their first meh year in 4 (and 2nd in like 10-15, generally) is just wild. CEOs (and boards) are not tracking their decisions to the 6mo action of the stock.

@tuckerweather Big loss for boston 25 and the weather industry. You were the only one that understood the impact big grocery is having on snow reports. Excited for what you do next. 🤝

After a spectacular 3 years, my time at Boston 25 has come to an end. Many of you already know, but my last day on air was earlier this month. I’ll keep this brief, but I have to say what an honor it has been to do what I love right here at home. I was able to work with an incredible group of people, many of whom I looked up to growing up! These years have been a dream come true. There will be more to come from me soon. In the meantime, I’ll still be right here talking weather with you!

@jimcramer I think your insights are genuinely terrible

The market is telling the hyperscalers no more money for you. You are reckless. These companies think they are paragons and fabulous stewards of our capital. If that's the case why are they spending more money on the lowest part of the tech food chain?

@ContrarianCurse Then why do you think they are doing it?