4 ms·
I like that the invisible hand of market is slapping the Mag-7 for capex which is the only way to discipline them. Investors are waking up to say: hey, you are
by bwfan123 4mo ago
I like that the invisible hand of market is slapping the Mag-7 for capex which is the only way to discipline them. Investors are waking up to say: hey, you are spending all your profits on data-centers, where is the return for me ? But, it surprises me that there are vast pools of capital which we collectively call the "market" that makes these calculations, or maybe a simpler causal explanation is the missing stock repurchase bid. At some point, one of the hyperscalers (msft ?) will break from the pack and announce reductions to capex and increase stock repurchases to stem the decline.
- ares623 4mo agoWhy is Apple included though?
- tomrod 4mo agoShare repurchases also aren't great I guess?
- TravisJamison 4mo agoMarkets generally love buybacks. The market is both happy that Apple didn’t spend all its cash on AI build-out, but also at the same time angry that Apple is “missing AI”. Not to mention the grumblings that Apple has peaked.
- symfoniq 4mo agoAnd did you see Apple’s recent price increases?
- eitally 4mo agoMy perception is that the market lumps companies together into sectors whether they have similar business models or not. When one is punished, other associated firms tend to be, too. You see this in any industry (not as a guaranteed rule, but in general).
- DaedalusII 4mo agobecause $100bn annual revenue, high FCF, high margin. Its a monster.
- twoodfin 4mo agoYou can simultaneously believe that the hyperscalers are becoming capital-intensive long-term in a way that’s bad for their profits and that as a result will be raising the COGS of Apple’s business in a way that also hurts profits.
- ambicapter 4mo ago> increase stock repurchases buy high, sell...whenever?
- ctoth 4mo ago> increase stock repurchases I just can't wait to get back to when innovation meant financialization, can you? Building things? Real Jobs for real electricians? Real buildings? Real compute? Why would anybody want that!