Outlier Capital

$AMZN CRUSHED THEIR Q2 EARNINGS • Revenue $200.6B vs Est. $196.2B • EPS $5.75 vs Est. $1.81 • AWS Revenue $42.2B vs Est. $40.6B • Operating Income $27.5B vs Est. $23.5B Q3 Guidance • Revenue $200B vs Est. $204B • Operating Income $24B vs Est. $25B

The market just handed us the exact AI infrastructure names at absurd discounts. These levels feel like a gift. Accumulating: • $IQE → 39.6 GBP • $SIVE → 26.9 SEK • $MU → $739 • $SNDK → $1,016 • $NBIS → $148 • $DGXX → $3.7 • $WOLF → $20.5 • $LUNR → $11.4 Temporary macro panic ≠ broken theses. Critical bottlenecks don’t disappear. I’m buying this weakness. Not financial advice. PS: My exact moves shared in Bio link.

Repeat after me, kids. If an institution is addressing retail, it most likely doesn’t have retail’s interests at heart.

Please guys, $SKHY Not a demand miss. Not a cycle break. SK Hynix simply has the highest HBM mix in the industry — and HBM is sold under multi-year LTAs. While commodity DRAM ASP rose ~30% and NAND +mid-50% QoQ, the contracted HBM pricing diluted blended ASP growth. That’s why they “missed” the ultra-aggressive consensus. 76.3% operating margin. Absolute numbers still record-breaking. Big-tech still expanding AI capacity hard. LTAs = higher visibility and less volatility going forward. This is the price of owning the real AI memory chokepoint. Still extremely bullish on the AI memory trade. Positioning now is extremely important.

BREAKING: US June PCE inflation, the Fed's preferred inflation metric, falls to 3.7%, in-line with expectations. Core PCE inflation fell to 3.3%, the second highest reading since October 2024. US inflation continues to run at nearly double the Fed's 2.0% target.

Just some interesting takeaways from $FORM earnings call on CPO: Since they attributed systems revenue nearly doubled due to: "accelerating growth in co-packaged optics or CPO". Q1 2026: "we now expect 2026 CPO revenues to come in at the high end of the $10 million to $20 million range" Q2 2026 (now): "expect to exceed that range by the end of the third quarter, and to significantly exceed the $20 million level for the year overall." Management stated "We’re seeing some significant acceleration in this [CPO] business". Q: CPO adoption outlook. Are we perhaps expecting the timeline to accelerate a little bit? A: "What I would say is there’s acceleration here in the very short term." But management stated there's not a significant pull-in on timelines. Citing production infrastructure (not just R&D) for: - The growing volumes of CPO chips planned for later this year + test insertion for scale-up and scale-out switches. - Seems like that CPO piece flows through $TSM COUPE [ likely maps to $NVDA CPO products] - "The CPO piece does flow through that 10% customer" So now, test is ramping given management cited growing volumes of CPO chips. "The rapid recent growth of our CPO business is an exciting development, which we believe represents the very early stages of widespread adoption of silicon photonics in the broader semiconductor industry" TLDR: Fundamentally, CPO as a theme is very early, and should start to go brrr soon since it's starting to show up in earnings now (equipment/test players usually appear up first before optical engines / laser volumes ramp). Personally once all the deleveraging stops, I think markets will start to care more.

Just some takeaways from $META | $MSFT earnings calls: Microsoft: - Expected to be FCF positive in 2027, despite the increase in capex (extremely positive for AI buildout that it's funded by operating income) - "Free cash flow was $19.6 billion, reflecting higher capital expenditures" - Quartely capex was $41B, roughly 2/3rds were "short lived assets, primarily CPUs and GPUs" - Expects capex spend will be over $50 billion for next quarter - Capex Guidance at ~$175 billion and 2027 capex roughly the same. Spending plans unchanged and in line. - "Extending the estimated useful life of our data centers from 15 to 25 years" - "We will be among the first cloud providers to deploy next generation rack-scale AI infrastructure based on $AMD Helios and $NVDA Vera Rubin" - "Customer demand continues to exceed available capacity" Meta: - Capex $130-$145 billion (narrowed range), from $125B-$145B. - Meta is receiving offers at a "significant premium" to what they paid for it (compute scarcity, positive for neoclouds like $IREN / $NBIS ) - Expects significant portion of compute (like the 1 GW DC in El Paso) to develop internal models. - Meta has multiple ROI-positive uses for additional compute across its core business (internally, not Meta Compute) - "Finally, we believe that overall industry capacity is going to remain tight for the foreseeable future" - "The industry has under-built historically for the wave of AI adoption, making existing capacity, including our own, extremely valuable" - Susan Li TLDR: - $MSFT and $GOOGL largely sustaining AI capex buildout while remaining FCF positive or through operating incomes. - $META flags available compute materially below demand at least through 2027. And $MSFT also flags compute demand far exceeds supply. - All three hyperscaler capex largely in line with Google hiking capex figures. AI selloff seems extremely overblown now, hyperscalers continuing capex in line (with Microsoft being FCF positive) or even hiked with $GOOGL. Compute scarcity is visible throughout every single hyperscaler ER.

BREAKING: Meta stock, $META, crashes over -9% after reporting weaker than expected earnings.