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Investing in an internal effort is an operational or capital expense that may do nothing if ineffective, decrease costs if effective, or create a revenue stream
by rubiquity 3y ago
Investing in an internal effort is an operational or capital expense that may do nothing if ineffective, decrease costs if effective, or create a revenue stream. These forced spending arrangements are revenue drivers. It is not the same.
- skybrian 3y agoIt could be thought of as quantifying the investment. Investors don’t value internal investment at zero. A vague idea that there is more to come is why tech companies have large P:E ratios. A stock’s valuation mostly consists of guesses about what the future will bring. Sometimes there are more numbers quantifying aspects of those guesses. Revenue is supposedly about the present, though. If some of the revenue comes indirectly from AI companies spending Amazon’s money, it’s a little odd. Maybe not materially so, though, when total revenue is above $500 billion a year?