FCF

ConfidentTapwater

For those asking about a stock tmrw, I present the $CHTR bull case in short: Stock is around $150, down \~80% from ATHs, trading at roughly 4x earnings with about $4.7B LTM FCF vs an \~$18B market cap. Q2 share count was down 13.1% YoY, so buybacks are doing a ton of work for EPS. Bear case is obvious: \~$94B debt, broadband subs still declining, EBITDA down, and Cox adds more leverage. If broadband is in permanent secular decline, this is a value trap. What I think is interesting is the catalyst setup. Tomorrow, Aug. 13, CPUC votes on the Cox merger, one of the last major regulatory steps. Combined CHTR/Cox would become the largest U.S. broadband provider. Then there’s the wildcard: on June 26 Bloomberg reported executive-level talks between SpaceX and Charter about a mobile partnership. Charter declined comment and SpaceX didn’t respond. Since then SpaceX has talked publicly about building out a true mobile service with terrestrial infrastructure. My speculation: it would make sense to wait until Cox closes before announcing a strategic partnership involving the enlarged network. I’m not buying it purely for SpaceX. I just think \~4x earnings + huge FCF + aggressive buybacks + Cox scale + possible SpaceX optionality is an interesting setup despite the ugly debt. WSB is blocking my post. Figure ill put it in here. Think its auto banning and here is a lower threshold. Ill put up a full post should they review and allow it.

Specialist-Union-298

Margins pressure, flat FCF and services growth, FY FCF also flat and massive increase in inventory

StuartMcNight

Is there though? Is there a precedent of hugely profitable companies continuing to be hugely profitable spending their FCF building up an alternative business?

Hypnot1se

Totally depends why. If it's because "We aren't seeing the return" it'll fuck him, If it's because "We want our FCF to recover" then it won't.

hseeman_sf

The unit economics work because they aren't buying GPUs like a hyperscaler. Most of the fleet is financed through SPVs collateralized by the customer contracts themselves, so the debt sits off balance sheet and gets serviced by contracted revenue, not FCF. Hyperscalers self-fund capex from operating cash. CoreWeave is renting a balance sheet from lenders who underwrote the contracts, not the company.

QuatroCisco

None of the above… …NVIDIA is becoming the central bank of the AI infrastructure layer with more and more outside financing and backstops needed because contrary to Jensens belief, lenders don‘t take GPUs as collateral. To much risk involved for me. …AVGO took/takes on loads of debt to do their deals with a lot of the recent deals directly linked to either OpenAI and Anthropic, which makes me uncertain whether they will be able to pay, since they‘ve already commited so much to other especially Hyperscalers. …MU is (in my opinion) near a cyclical peak when it comes to RAM prices, since a lot of their recent revenue growth and margin expansion is directly linked to massive price increases and not volume. Meaning once the capacity that MU, Sk hynix and Samsung are building comes online, revenues might still grow but margins will normalize, leading to lower profits. So once again, too much risk for me. …TSM and also ASML are in my opinion the least risky infrastructure stocks out there, fundamentally speaking, when it comes to their current valuation, wouldn‘t consider them a buy at the moment. …AMZN also too much uncertainty for me right now. They‘ve taken on the most debt, the bond market is skeptical with their last offering only being 1,6x oversubscribed vs. normal investment grade sales at 4x. They are the largest cloud provider with AWS, however Like the other hyperscalers, they don‘t disclose their AI-revenues or their margins. They only use run-rates which is just any month times twelve, so as transparent as a phone screen in my opinion. Also not a fan of management recently. They talk so much about the insatiable demand for their services (cloud, renting chips etc.), take in huge amounts of debt, send FCF into the negative, but then simply wire 35 billion to OpenAI for nothing. That was money contingent on IPO or AGI, OpenAI achieved neither but got the money anyway. If you have real outside demand, you don‘t issue debt to fund your own customers. So like I said, too much uncertainty and shady management, in my opinion.

miata_only

Some people are saying investor concerns over FCF have been assuaged, you guys

crankthehandle

Their retail business is pretty much flat, FCF is shrinking, new businesses (incl. cloud) showed good growth last year but was pretty meh last quarter. I directionally agree with you but it also has dropped already for the last few days. So not sure how violent the earnings reaction will be.

Twt85519

> How does a company this small survive with -$5.7 Billion in free cash flow. It's FCF is -2x it's revenue. That is an insane number for a company with a B+ rating. Because they are backed by a 5.3 Trillion company. 5.7B is a pocket change for them. And if you wondering "why they backing?" it's because Coreweave's 104B backlog ties to them.

tryexceptifnot1try

How does a company this small survive with -$5.7 Billion in free cash flow. It's FCF is -2x it's revenue. That is an insane number for a company with a B+ rating. Companies with those financials typically go bankrupt relatively soon. They don't seem to be monetizing their backlog fast enough. If this pops a lot it looks like a huge short opportunity.

itsnotshade

Just a general rotation out of tech into other sectors looks like. Google getting extra hate for taking on more debt after they posted negative FCF

XOM_2daMooN

Soft used car market is crushing their profitability and FCF

Loose-Dream7901

Actually, a lot changes now from a balance sheet perspective for GTII with their ownership now over 49.99%, RYM can be consolidated on the balance sheet. This means the 16M licensing fee which GTII “pays” RYM was captured COGS trailing into FCF, OI and NI. Now, GTII is able to classify this as a instra company transfer and use RYM as a vehicle for their non-plant touching division (beverages etc)

Disastrous_Rent_6500

Intel has NO FCF so their hands are tied 🤣

Disastrous_Rent_6500

Intels FCF is horrible, so they have to dilute shareholders to raise cash 🤣

Disastrous_Rent_6500

They don’t have FCF so they have no other option 😅

Helmdacil

Revenue =/= earnings or more importantly FCF. Fcf was negative. Earnings print was not actually from operating earnings. PE is not always a good metric.  There is a reason why Warren buffett suggests operating earnings and fcf to value Berkshire rather than raw eps. Because eps can swing wildly based on the change in valuation of various stocks in Berkshires asset portfolio irrespective of the true increase in cash flow of the business as a whole. Fcf can increase 50% yoy and the eps could be negative if the market takes a dump for example.

Prestigious-Tear-768

Not sure why my post got removed, but I’m also bullish on Grinder. Revenues growing at 19% YOY , with paid users growing 16% Almost 100% cash conversion on free cash flow due to minimal capex required. Defendable moat (big dating apps all seem to be staying in there lane, tinder the hookup app, hinge the relationship app, Grinder… well you know grinder). The stock repurchase program is also something to be excited as this will put more money back into the pockets of investors. There are really two main risks I’d be concerned about and that’s the leverage and governance risk. Both are actually subdued IMO as the company generates 6x income to coverage its interest expense and the governance is also subdued since insider ownership has actually been buying back shares since the attempted buyout (I believe you also mentioned this in your post). Unless revenues significantly drop off (which I don’t see happening ) due to some black swan event like severe app technical failure, I don’t see how this app doesn’t do well in the foreseeable future. Combine that with the current 18x price to FCF multiple, I am a strong buy on GRND.

aronnax512

You got a raise, why not buy a house in cash? They need more capital for reinvestment than the current bump in FCF. Stock issuance at current valuations is cheaper than interest on corporate bonds, so they issue more stock.

ravepeacefully

How I feel arguing with 11 year olds that have $43 in their trading account that daddy gave them for taking their medicine every day. Like if you can’t see a difference in 100x sales for companies with no earnings and 20x earnings with a company making 50b in quarterly FCF, idk what to tell you.

creemeeseason

Using your high end....it's currently trading at 20x 2028 FCF, assuming no more dilution. Actually not that bad, if they keep growth going like they are now. Not cheap by any means, but of your correct there is a chance of reasonable returns.

Xalksahsax

It's not too late to get into PLTR. $15-20 B of FCF by 2028.  My TP is $1150 per share (x6.5).

SuccessfulSir9611

These are historically Capex light tech businesses. Now they are turning into capex heavy businesses with debt and negative FCF. There is too much to lose. And they don’t even declare all the hidden debt in their earnings report

LackToesToddlerAnts

What did people miss? Please tell us or are you going to try to point to FCF without understanding revenue,profit and spending?

LarryStink

They have the largest market share of RPA and they are converting that customer base to their new orchestration platform. The new deals are coming and they are paying a premium for the agentic and orchestration. Their growth strategy is solid. Natural, and steady. They are maintaining FCF and a light balance sheet which allows them to be nimble. 

Affectionate-Ad-6945

stock based compensation takes half of their FCF

Full_Pear449

Ok genius the tax liabilty is either now or later the only question is long or short term. The greater question is- short term Cap Gain now and reinvest in whatever you want or wait for MAYBE? Bird in the hand is worth 2 in the Bush. 10yr Tresuries are now trading at a 5% YTM. month's are 3.92% and roll for atleat 3 times since rates are not going lower. Mush himself SAID- SpacerX will not be profitable for 5yrs. Even with generous segment valuations, intrinsic value is \~33% below market; only dramatic FCF improvement or a stock price drop would justify holding.Are you valuing it as a rapidly growing aerospace company providing satellite communications services.  As of the August 5 close, the company had an equity value of approximately $1.43 trillion, hence investors are currently paying for the realization of several business plans that may take years to be fully realized. The Space segment had $962 million in revenue and an operating loss of $542 million. The Connectivity segment brought in $4.29 billion in revenue and had operating income of $1.66 billion. The AI segment delivered $2.56 billion in revenue but operated at a loss of $1.26 billion. Of the 38 launches performed by SpaceX during the quarter, 28 were classified as internal. According to the company, these launches did not generate Space-segment revenue. Lastly , Class B shares have a voting power of 10votes for every share. Essentially. Musk owns 90% of the Class B Shares and on the dominance alone he can and will cast those votes as he sees fit, regardless of the consequnce to the Company. If you are that rich and don't need the csah Immediatley why not go the Privaye Equity Route. Private Equity Funds on a 5yr basis typically are in the 15% annual return

librariancap

>if we project a realistic 8% annual growth rate in fcf per share over the next 5 years  "Realistic" 8% FCF growth rate - another example of how DCF is just brain rot. PayPal FCF \* went backwards (down 3%) in 2025 and may well go backwards again in 2026 (guided to be $6bn+, potentially lower than 2025 FCF of $6.41bn).

bsplondon

everything has been said, but the only thing I want to add is if you think GOOGL will be >$400 (your breakeven) in 18 months time. If so, you wont lose a penny. If it ends at $399.99 you have lost the call. Personally, I think doing your homework and deep dive what is going to drive the price in the next 18 months is the key to your thesis. My view is that GOOGL (and most mega caps) are currently in the peak of CAPEX cycle, they are spending more on CAPEX than bringing in from the ongoing operations - This means FCF is negative. When (not if) those circumstances switch place (i.e. more income than CAPEX) you will see this and all other big AI tech take off. With a Breakeven of $400 - Chill and watch the market do its thing.

buckhuntress

Nice breakdown. What helped me was moving from weight percent to conviction buckets. I run three. FCF machine compounder, moonshot with network effect, and ballast dividend. Then I check each name against market cap. If one position is creeping to 60 percent of book just because it ran, that is market leading not conviction leading. I use a soft cap of 5 names, hard cap of 10, contract when market is down, fan out when up. Might help you spot overlap in your large caps. What is your highest conviction name right now if you had to hold just two?

thri54

Their bookings are higher than their realized revenue. FCF is a lot better than earnings per share.

Snoo29444

PANW’s valuation is high for **two different reasons**: its quoted GAAP P/E is partly distorted by acquisition accounting, but the company also carries a genuinely enormous strategic premium. At the latest close, PANW was about **$364 per share**, with a **$291 billion market cap** and roughly a **347× trailing GAAP P/E**. In Q3, PANW reported a **$183 million GAAP operating loss** but **$814 million of non-GAAP operating income** because non-GAAP results excluded $517 million of stock compensation, $198 million of acquisition costs, and $280 million of acquired-intangible amortization. So the 347× GAAP P/E makes it look especially absurd. But even after normalizing, it is still extremely expensive. **What the market is actually paying** Using PANW’s current market cap, its April balance sheet, and FY2026 guidance: Approximate enterprise value: **$286 billion** EV/FY2026 revenue: **about 25×** EV/FY2026 adjusted free cash flow: **about 67×** Price/FY2026 non-GAAP EPS: **about 96×** EV/trailing unadjusted free cash flow: **about 75×** PANW is guiding to approximately $11.42 billion of FY2026 revenue, a 37.5% adjusted free-cash-flow margin, and $3.77–$3.79 of non-GAAP EPS. That is not merely an accounting illusion. **The stock really is priced at a rarefied valuation.** **Why investors are willing to pay it** **1. PANW is being treated as the cybersecurity “operating system”** The old PANW thesis was that it sold excellent firewalls. The current thesis is that enterprises will consolidate much of their security stack onto PANW: Network security and firewalls SASE Cloud security Security operations through Cortex/XSIAM AI application and agent security through Prisma AIRS Identity security through CyberArk Observability through Chronosphere The important idea is that cybersecurity is moving from dozens of disconnected point products toward a few integrated platforms. PANW may be the company with the broadest credible enterprise platform and the installed base to cross-sell it. About **65% of NGS ARR now comes from “platformized” customers**, with roughly **120% net revenue retention** among those customers. Management is targeting more than 4,000 platformizations and **$20 billion of NGS ARR by FY2030**. That combination—large installed base, integrated data, distribution, and cross-selling—is what causes investors to think of PANW less like an ordinary software vendor and more like the potential **Microsoft of cybersecurity**. **2. AI may expand every part of PANW’s addressable market** AI creates more software, more network traffic, more machine identities, more autonomous agents, and faster attacks. PANW can potentially monetize all of those: More AI traffic creates more demand for network inspection. AI agents create an identity-security problem, supporting CyberArk. Machine-speed attacks require automated SOC products such as XSIAM. Companies deploying models and agents need dedicated AI-security products such as AIRS. AI infrastructure generates massive telemetry and observability demand. There is already tangible growth beneath the narrative: SASE ARR was about **$1.6 billion and growing around 40%**, XSIAM ARR exceeded **$600 million and was growing around 100%**, and Prisma AIRS had surpassed 300 customers, with management expecting more than $100 million of ARR within two quarters. Reuters also attributed PANW’s recent guidance increase and rerating to stronger AI-related cybersecurity demand. **3. The cash-generation profile is unusually strong** PANW reported a trailing adjusted free-cash-flow margin of **38.5%**, up 430 basis points, and is targeting **40% by FY2028**. Investors are therefore not valuing it as a 14%-growth hardware company. They are valuing it as a company that could sustain: high-teens or 20%-plus recurring growth + approximately 40% cash margins That combination normally deserves a major premium. **4. Recent results encouraged investors to believe the bull case** The latest quarter showed: Organic NGS ARR growth: **28%** Organic RPO growth: **22%** Organic revenue growth: **14%** Adjusted FCF growth: **34%** Those recurring and forward-looking measures are considerably stronger than the organic revenue number. Investors appear to believe ARR growth will eventually pull recognized revenue growth higher as newer products scale. **What is already priced in** A rough reverse DCF illustrates the problem. Starting with approximately **$4.28 billion of guided adjusted FCF**, a roughly $286 billion enterprise value, a 3.5% terminal-growth assumption, and a 9%–10% discount rate, PANW needs approximately: **20%–23% annual free-cash-flow growth for ten years** to justify the present valuation. Management’s $20 billion FY2030 NGS ARR target implies roughly **22% annual ARR growth through FY2030**, so the valuation is effectively giving PANW substantial credit for hitting that ambitious target—and then continuing to compound strongly after 2030. That is possible. It is not a conservative base case. **The parts of the story the valuation overlooks** The headline Q3 numbers were heavily acquisition-assisted. Revenue grew 31%, but only **14% organically**; NGS ARR grew 60%, but **28% organically**; RPO grew 36%, but **22% organically**. There are also meaningful quality-of-earnings issues: Q3 stock compensation was **$517 million**, or roughly **17% of revenue**. Basic weighted-average shares rose from 665 million to 801 million year over year, approximately **20% dilution**. The company’s balance sheet now contains around **$29 billion of goodwill and acquired intangibles**, versus roughly $5.3 billion before the major acquisitions. “Adjusted” FCF adds back acquisition-related payments and certain capital expenditures, so it is more generous than plain free cash flow. Stock compensation is particularly important: it raises reported cash flow while transferring part of the business to employees. It is not equivalent to an ordinary cash expense, but it is not free either. **My assessment** **PANW deserves a premium. The present magnitude of that premium is much harder to defend.** The market is pricing PANW as: The winner in enterprise security consolidation. A major beneficiary of AI-driven attack-surface growth. A durable 20%-plus recurring-growth company. A future 40%-FCF-margin company. A highly successful integrator of CyberArk, Chronosphere, and future acquisitions. If all five happen, the stock can eventually grow into the valuation. But there is little allowance for merely “good” execution. Organic growth falling into the mid-teens, weaker CyberArk integration, continued heavy dilution, or a modest decline in software multiples could produce a severe de-rating even while the underlying business remains healthy. **My characterization: elite company, euphoric price.** The valuation is understandable, but at roughly 67× generous adjusted FCF, investors are paying for something close to the bull case rather than receiving much upside optionality. Yw for the meat proxy

Hypnot1se

I'm very bullish on companies with scale + distribution moats. Google, Amazon, Meta, (regretfully) Microsoft. The thesis revolves around AGI becoming commoditized over the next few years. That said, near term I actually don't think that these companies are likely to see much life at all. The amount of money they're burning right now in the compute landgrab is eye watering and is going to impact near term earnings and FCF negatively. The stocks have already been under pressure due to this, and I don't see it suddenly getting better this year.

Lootoholic

They beat on eps at -0.11 versus -0.24. Still negative though. They problem is that they have tons of debt and negative FCF and therefore the bankruptcy is a real concern. The good thing is that they still have a meaningful revenue and they are a well recognized brand which means that someone might come to their rescue at some point.

Weird_Confidence0214

Spot on, it’s going to be accelerating top, bottom line, FCF and cash balance growth story with expanding margins and new product intros. It’s a multi year cycle. This thing won’t be extended for the first time till -$30.

Seatown1253

FCF is dropping due to stock compensation 🥴…and the DD loses all credibility immediately lol

Jerikolol

Escaped and hacked a random company: OpenAI, Anthropic, META, KIMI ✅ Big loser whose model is so bad it cant even hack a weeeny rando website: Gemini ☠️ Fire Sundar Pichai, GOOG dead no FCF spent it all on overpriced 93% margin RAM.

SupermarketOrnery179

Interesting thesis. The growth numbers and FCF generation look strong on paper. That said, the daily chart is still in a clear corrective phase after the big run. Price is below the declining trendline and momentum hasn’t turned yet. The valuation case might be there longer-term, but short-term the chart suggests it could still need some time to stabilize before a sustained move higher.

l0gicgate

Considering negative FCF they just reported, and the entire AI team leaving the company except management, I think puts. Inverse me tho, so calls.

Lazy--Expression

Agree. It definitely had heavy bear pressure after the prior guidance reset and the short interest is meaningful, but this isn’t some balance-sheet death spiral or bankruptcy setup like a lot of the names WSB has seen before. DOCS looked distressed on the chart, not in the business: ~53% 6-month drawdown FY27 growth guide only ~3–5% bearish analyst revisions + AI margin fears But fundamentally: ~$645M revenue, +13% ~55% adj. EBITDA margin ~$317M FCF ~$749M cash/securities basically no debt problem Those numbers were before earnings. Was it mispriced then?

yourgirl696969

The lag from their capex spending to profit is like 2 years. Feels like they’ll be hitting ATH starting next year more often once their FCF gets more positive

No_Cell6708

What's that? You weren't paying attention to Cronos cooking up an order of Spinach in the north? Too bad. But there's still hope. "But it's an LP" The LPs have been to war. Leaders have emerged. You really think GTII is experiencing price compression? MSOS have not seen real price compression yet. As regulation in the US develops, interstate commerce + real competition will be a very rude awakening for many current players. The risk is real. The LPs, on the other hand, know how to compete at mass scale. The big players are all rocking million+ sq ft, purpose built facilities that are highly automated and highly efficient. This is how cannabis will be produced at scale in the US eventually and certain LPs are writing the playbook for how to design and run these facilities. There is a ton of value in the lessons they've learned and it's become clear that some LPs are significantly more well run than others. That's right. It's time to learn more about Auxly Cannabis again and why you want to get in before Q2 earnings next Thursday. (Igbgmn) Growing revenue at 20%+ 55-56% Gross Margins (all domestic sales so no international tax advantage - best in the business - most others are very happy if they can hit 42-45%) 28% FCF margin (the highlight imo) I'm expecting $40-$50m FCF (at least $50m+ in operating cash flow - planned expansion capex of $10m that will increase production capacity) in 2026 against a $285m market cap. ($290 EV). That is a juicy FCF yield. Best selling brand in Back Forty, while showing the ability to continue to grow others (all their own) Fantastic CEO in Hugo Alves. The man is on point and does not mess around. Very restrained and focused. Can easily expand capacity by 50% plus on current footprint. Also has a lot more space on their owned land to continue to expand. It would cost more to build their facility now, than the market cap of the entire company. The value and growth propositions are both there. Auxly is writing the playbook for how to build the most efficient adult rec mega-facility in the world.

One-Fun-4901

SpaceX's quarterly report on August 4, 2026 and the subsequent analyst conference call clearly confirmed market concerns: Elon Musk has transformed the company into a neocloud provider, whose brutal capital expenditure (CapEx) requirements and the risk of deferred revenue triggered an immediate sell-off on the stock market.  The deeper financial and strategic background of the announcements can be broken down into the following structural points: 1. Billions on Paper: Google and the Anthropic Contract Trap CFO Bret Johnsen confirmed that the growth story is centered on fixed leases, but the timing of the cash flow realized is causing serious liquidity stress: Anthropic contract: $1.25 billion monthly commitment for compute capacity. Google contract: $920 million monthly lease for more than 110,000 Nvidia chips located in the xAl Colossus data centers. The liquidity gap: Since actual drawdowns and major cash movements will not begin until October 2026, a significant portion of the current growth is on-balance sheet, unearned revenue. The market sees this slippage as a serious risk given the current stretched valuation. 2. Brutal CapEx: Free Cash Flow (FCF) Destruction The analyst’s most shocking data was the capex drop, which highlighted the unsustainably high entry barrier for Al-Infrastructure: The New York Times Soaring Investments: SpaceX’s quarterly CapEx shot up to $18.37 billion from $2.8 billion last year. Targeted spending: $15.83 billion of this was spent solely on Al-infrastructure (buying Nvidia chips and building data centers). The result: Although the operating loss on paper was reduced to $143 million due to depreciation and capitalization rules, the gigantic wave of investments completely consumed free cash flow, projecting a constant need to raise capital. 3. Merger Rumors: Tesla-SpaceX Merger Reorganization plans leaked by the Wall Street Journal and Investopedia suggest Musk may be trying to reallocate resources to sustain the stock market bubble: Tesla Breakup: Musk has ordered Tesla’s top management to prepare to spin off Tesla’s China business from its US parent company. Synergy or Lifeline?: This move could be a stepping stone to a potential Tesla-SpaceX merger. With Tesla having previously invested $2 billion in xAl – which has since been converted into SpaceX shares – the financial and ownership structures of the two companies are becoming increasingly opaque. 4. Market Reaction: Stocks in Freefall Although quarterly revenue topped analysts’ consensus estimates by $7.81 billion, SpaceX (SPCX) immediately plunged more than 8% in after-hours trading. Investors were alarmed by: Unsustainable valuation: Wall Street previously valued the company at a multiple of more than 110 on pure promises with no real cash flow. Starlink slows: Average revenue per subscriber (ARPU) in its satellite internet business fell 22%, indicating that the company’s only real money-making segment is facing growth constraints. Stocks at rock bottom: Shares are now 50% below their previous highs. The response to this AI data center bubble on Wall Street, in the AI ​​industry, and in the global press has shifted from initial admiration to deep skepticism and even panic. The market is now beginning to understand the risks involved in transforming a rocket company into a neocloud provider. The repercussions are reverberating through the economy through four main channels: 1. Wall Street: “The bubble hasn’t burst, but it’s letting air in.” The reaction of analysts and big investors after yesterday’s quick report was a clear wave of selling: Questioned returns: Russ Mould, chief investment officer at AJ Bell, stated that there is a deep healthy skepticism in the markets about whether these gigantic infrastructure investments will ever be able to generate a proportional return. Overselling accusations: According to Fortune magazine, investors increasingly feel that Musk “oversold” (overpromised) SpaceX’s growth potential during its June IPO, masking the brutal cash burn. Short-sellers’ onslaught: Elon Musk angrily messaged SpaceX (SPCX) short-sellers on the X platform for lending 34% of the company’s free float in anticipation of the stock’s decline. 2. Ripple effect: Shock in the AI ​​sectorSpaceX's stock market run and amazing CapEx numbers shook the entire tech sector:OpenAI puts on the handbrake: According to a Medium analysis, in the face of SpaceX's plummet, OpenAI has reportedly decided to postpone its own IPO until 2027. They realized that in the current market mood, they would be unable to achieve the coveted $1 trillion valuation.Sector-level correction: Google, Meta, Microsoft and Amazon stocks also came under pressure. The Nasdaq index fell nearly 9% from its previous peak as investors realized that building data centers is a bottomless pit.3. Tesla-SpaceX merger fallout: National security and legal concernsThe Wall Street Journal report that Musk would spin off Tesla's China business in order to merge with SpaceX has caused a huge storm:Musk's denial: Musk immediately called the report "absurd fake news" on X, but the market knows that he has previously denied the Twitter acquisition several times.National security red line: Analysts have pointed out that the merger would encounter unprecedented regulatory obstacles in the US. SpaceX is a key military supplier to the US Department of Defense (Pentagon) (secret military satellites, Starshield). Merging a company that has factories and significant exposure in China (Tesla Gigafactory Shanghai) would pose a national security risk for Washington.

Ordinary_Repeat7637

In all fairness, you can't really look at META's forward PE and call it cheap. On paper it might seem cheap, but now META is a heavy capital intensive business burning through all of its FCF. The PE is extremely deceiving. This is not a cheap company.

gamersEmpire

CELH; 460m of FCF from a 6b company and they dump 20%. Make it make sense 🤡🤡🤡 they have 10% of their market cap in cash btw

Jerikolol

Sundar motherfokcing Pichai. If you wanna spend 25b on fucking RAM, then USE YOUR OWN MONEY U COCKSLUT. I bet your fishhead management team doesnt have FCF like I do. Bitch.

care_dont

Why do you just constrain yourself to forward PE in isolation. First test what revenue growth assumption does it undergo. Then assess if this growth is viable. Then assess their marketcap + addressable marketcap. Test what part of addressable marketcap will be taken by NVDIA at this YoY growth. Test against peers share. Then confirm that this split makes sense. Finally if you are feeling brave, assess what would happen if growth were to stall or to slowdown. Take a look at ISRG as an example. Its revenue and FCF is growing annually, while stock price is dropping. Why? Because growth within its market is slowing down and competition enters.

Few_Lecture6615

FCF is still awful

GoldenPresidio

their FCF will absolutely be negative if they're in an investing super cycle

HAL-_-9001

\>Take Zoom for an example. Covid obviously wasn’t going to last forever and Zoom wasn’t going to be a big deal for long.  Not really the best example. Zoom had no real moat. Memory plays on the other hand do. Building a new fab takes years. \>MU, SNDK, etc have a much better case for longevity but some day margins and profitability will come down No company can sustain these levels of margins or FCF for eternity but they have a vastly longer roadmap than most assume. While they now have 5yr contracts as well.

_hiddenscout

CW **Second Quarter 2026 Highlights:** * Reported sales of $924 million, up 5%, operating income of $179 million, operating margin of 19.3%, and diluted earnings per share (EPS) of $4.07; * Adjusted operating income of $179 million, up 12%; * Adjusted operating margin of 19.4%, up 110 basis points; * Adjusted diluted EPS of $3.72, up 15%; * New orders of $1.1 billion, up 8%, reflecting a 1.16x book-to-bill; and * Free cash flow (FCF) of $160 million, generating 116% FCF conversion. **Raised Full-Year** **2026 Adjusted Financial Outlook:** * Sales increased to new range of 8% to 9% growth (previously 7% to 8%), reflecting growth in the majority of Curtiss-Wright's end markets; * Operating income increased to new range of 11% to 13% growth (previously 9% to 12%); * Operating margin increased to new range of 19.1% to 19.3% (previously 19.0% to 19.2%), representing an increase of 50 to 70 basis points compared with the prior year; * Diluted EPS increased to new range of $15.10 to $15.40, now up 14% to 16% (previously $14.90 to $15.30, up 13% to 16%); and * FCF increased by $5 million to new range of $585 to $605 million, which continues to reflect greater than 105% FCF conversion. "Based on our strong first-half execution and our outlook for the remainder of the year, we are confidently raising our full-year outlook for sales, operating income, operating margin, diluted EPS and free cash flow. Curtiss-Wright remains strategically aligned with many favorable secular trends and embedded growth vectors across our A&D and Commercial markets. Overall, the team is successfully executing on our Pivot to Growth strategy, which will enable us to continue to deliver significant long-term profitable growth for Curtiss-Wright stakeholders."

expatcoder

Meanwhile before the announced departure of said dude GOOGL hit $384, this with negative FCF, spiraling costs, questions around search revenue cash cow longevity, legal concerns, blah, blah, blah. The departure is a big deal, sort of, but mostly because it's a fresh new headline for the algos to dump on. In the next week or so it will be back up in the $370s and everyone will forget about the departure.

Safrel

By inference, you think they manipulated their EPS to look better or worse? Because to me it looks like their FCF is negative.

GoldenPresidio

I’d say net income is easily manipulated with accounting practices The only way to really say youve made money is to look at historical FCF. Whats tough is trying to forecast what the FCF will be on all of this future revenue

qp0n

Gold is moving again. Up 3% in the last 12 hours. And gold miner FCF is at all time highs. Just sayin.

Trick_Job3956

The useful version of this question isn't "is it expensive," it's "what growth is the price already paying for." Run the DCF backwards: take the current market cap, pick a discount rate and terminal multiple you'd actually accept, and solve for the FCF path that gets you there — then ask whether you can defend that path for ten straight years. At high multiples the thing that usually breaks first isn't growth or margins, it's the multiple, and that can compress while the company keeps executing fine. Most bears aren't betting on a blowup, they're betting on three great years and a flat stock.

Soggy-Level-3492

Based on a strict, conservative Free Cash Flow (FCF) fundamental model, SpaceX's fair value drops to **$34.00 to $45.00 per share**.  This pure valuation strips away all speculative growth multiples. It judges the company solely on the actual cash it generates versus the massive capital it consumes. At this fundamental baseline, the intrinsic corporate value is **$450 billion to $600 billion**, meaning the current market price of $125.33 is overvalued by roughly 65%. 

RogueJello

I guess I wonder what you think they're going to acquire here. Right now they appear to think that GTBIF is the best thing to invest in, which is why their buy backs at $6.11 is where a lot of FCF is going, and it exceeds their SBC package requirements, which is the level they were spending at when it was closer to $12-15. They've definitely got the capacity to do some M&A, but they might have better opportunities if they wait.

RogueJello

I guess I wonder what you think they're going to acquire here. Right now they appear to think that GTBIF is the best thing to invest in, which is why their buy backs at $6.11 is where a lot of FCF is going, and it exceeds their SBC package requirements, which is the level they were spending at when it was closer to $12-15. They've definitely got the capacity to do some M&A, but they might have better opportunities if they wait.

ZucchiniConstant

I think one thing this post is missing though, valuations of these stocks currently. a lot of them don't make or barely net profit mostly due to accounting tricks. We judge from FCF which seems nice until you look sbc that can be written off in FCF, throw in buybacks to keep the stock from not dropping so much due to sbc and still a lot of these stocks get diluted. There is no doubt that these stocks aren't going anywhere and AI will only help them in efficiency and larger need for security. even at 25% growth levels these alot of these stocks are worth several years worth of revenue to make them remotely near their current market cap, this doesn't mean they don't run more but realize you're buying hype and not the value. Far too many people look at top and bottom lines, growth, and FCF without actually looking under the hood to really see what is going on. Good luck, i do think that there will be better buying opportunities down the road on a lot of these names, but long term everything will work out.

super_them

do be careful - AMD has does have earnings but P/FCF is 95:1 It has a very high market cap for its current ability to print money, b/c so much CAPEX. Extreme growth expectations are already priced in.

SteakEater137

Oh sorry are you talking about FCF?

SteakEater137

AMD is currently way overpriced to the point it needs to not just beat but destroy across the board. Also CapEx is high so lower FCF

NebulousManifest

They were great, but they came from companies that are already producing cash from retail, cloud services, and advertising. Not from companies monetizing AI The market didnt shit the bed on google for going negative FCF for nothing And overall, the FCF of the combined MAG7 is trending down. It loved MSFT, dont get me wrong, but its giving euphoria to run into ATHs on nothing insane

Mariox

The bear case remains that growth plummets in 2027. Though I have not seen analyst 2027 revisions of estimates. Revenue growth will top out this quarter at around 96-100% growth. Margins will grow as revenue grows because revenue is going a lot faster then costs. FCF is growing just as fast as revenue which is the big reason the valuation looks so expensive, but isn't. People ignore FCF for most companies because almost all companies are investing cash into growth. PLTR does not need to spend cash to grow as a pure SaaS business. PLTR has a unique business model. Customers pay based on value created. This means the more the customer grows, the more they pay PLTR, and the customer grows faster because they use PLTR. The valuation for PLTR will look expensive for the next 5 years while the stock continues to go up. Companies will need the best AIP to compete and governments will need PLTR to protect democracy and freedom. Even the countries who want to get rid of PLTR will not be able to because NATO is staring to use PLTR. PLTR will end the year around $200 and end of 2027 around $325.

finscoio

ROIC of GOOG's 2026H1 is stably around 20%, althoug FCF is negative but a negative FCF cannot last long.

ga643953

Even so, it would still be higher then $120. I tried to put the 15B FCF by 2028 into my model using 51% FCF margin (from last quarter) and that was the implied growth. But this quarter, their FCF margin is now over 60% for some reason. Factoring that in and the fact that PLTR's top 20 customers contribute over 40% of their revenue because they keep scaling up their spending with PLTR, I think 15B is actually quite likely now.

ga643953

CEO unofficially guided for 15-18B FCF in 2028, which implies a 100% growth +another 100+% growth on top of the insane 82% growth we are already seeing this year. If they do manage to grow into that, I believe it's undervalued.

_hiddenscout

With bigger companies, how they handle their cash can be weird too. A few years ago, MSFT had some issues with FX trading with their cash. I could only imagine what you do when you're a company like Apple and have billions of dollars in FCF.

Weak_Alternative_168

APP's a fair answer to your actual question, the AI genuinely shows up in the P&L now. AXON is the product itself, not capex waiting on a payoff, and 52-59% growth at 84-85% EBITDA margins with real FCF is hard to argue with. What I'd push on is "allegations, no wrongdoing established." That undersells it. The SEC has an open investigation into their data-collection practices (Bloomberg broke it, the stock dropped \~14% that day). The fraud and laundering claims are short-seller stuff, unproven, and APP denies them. But Morningstar's read is the probe lends the data angle some legitimacy, and the credible piece is whether AXON's edge came from breaking Apple/Google/Meta's terms. Which is why "reliant on Apple & Google" is the real thing to underwrite. The margins run on those platforms, so an adverse finding hits the input, not just earnings. The current numbers aren't the debate. Whether the data engine stays clean and the June e-commerce launch scales, is.

FidelityHelpMePlease

GOOGL posted record earnings, only dipped because of -$5b FCF which is nothing to them

LockApprehensive2227

TIL: markets do not follow FCF, earnings or anything real. It’s all based on vibes. Full porting into virgin galactic and Wendy’s if that’s the case…. “Nasdaq took 16 years to recover” - straight up FUD. I guess if you invested every single penny the day before the 2000 crash o then it took 16 years to recover. So yea guys according to this guy just put your money in cash don’t invest it according to OP

FidelityHelpMePlease

Google's FCF was a meager -$5b which is nothing to them btw

borkdpasito

MSFT had positive FCF

visionarymind

Just recapping: Just a coupla weeks ago, Investors were selling tech because elevated capex was a major concern Alphabet reported negative FCF for the first time in nearly two decades & died, -10% post ER Meanwhile, Yen got carried away & into very Big Trouble in Little Tokyo IRGC said fuk off until next POTUS MSFT reported negative FCF & mooned Yen intervention Negative FCF now doesn’t matter, every mag7 +2% What’d I miss❓

visionarymind

Imagine selling GOOGL🚀 because some nerd said negative FCF is a bad thing 🫵🤣

visionarymind

Same thing that happened to negative FCF being bad

visionarymind

I remember two weeks ago after GOOGL tanked, negative FCF was really bad Now it’s causing rallies 🎭

Maakus

You buy SNAP @ $4.69 on Friday - what are they doing with their money? FCF is $0.36 per share over the ttm. Sounds good right? Stock based comp is -0.60 per share. Paying their employees in stock is eating 2x their free cash flow and sending them negative FCF. Looking back in the companies history and they've always done this. SNAP is negligent to shareholders. Great for employees, though. If you want to invest in social media just buy Meta/Google/Reddit. This company is not unique and only burns capital.

Pin-Last

basically every company deals with depreciation, \*yawn\*. Amazon didn’t need FCF when it was becoming one of the biggest companies on earth, & it doesn’t now. When Andy Jassy says the buildout is guaranteed money, I believe him over you. Seems to be working for MSFT

Virtual_Secretary_98

Equities are so risky right now with bonds pying close to 5% and major tech companies having almost negative FCF + macro isn't looking good either. Hands off for me.

123789dftr

1. They don't remove posts for Ai I believe ( oiod be wrong) 2. Even if the post was removed because of AI, doesn't mean you were right. Are the mods suddenly experts at identifying Ai vs not Ai? 3. Once again, just because something is written long doesn't mean it's AI. The voice of the post did not match AI, as well as multiple grammatical and spelling errors that LLM wouldn't make. But you didn't read it you just saw paragraphs and immediately called it AI. 4. There were financial figures. and this is such a silly point. Every DD doesn't need to have all these numbers shared. Meta is one of the most discussed stocks on reddit. Everyone already knows the valuation is extremely cheap by every metric outside FCF... Why can't someone give textual due diligence about why they think that isn't a problem?

visionarymind

Just received a targeted ad: “FCF is the new EPS, here’s what you need to know” 🙄 Probably 🅱️lulish

OwlZealousideal4779

The negative FCF definitely caught my attention too. I checked the cash flow statement on moomoo after the report, and I’m less concerned about whether Google can fund the spending. They still have a very strong balance sheet. The real question is whether this capex earns a good return. If AI spending continues to drive Cloud growth and create new revenue streams, the investment could prove worthwhile. If not, investors will start questioning whether they’re overbuilding.

Fit_Opinion2465

Uh massive FCF growth and buybacks

jebryant101

The Google thing will only be a problem for a minute. And yes RDDT is FCF machine. The DAU data was the only real concern. Unfortunately my spreads will be long gone before we are proven right. I sat out RDDT earnings last Q and got smoked this Q. I might do a couple leap spreads when IV drops. I believe you.

PyloPower

I just asked Gemini to be an elite management consultant and to tell Sundar what 10 priorities to focus on upon learning Oracle will default in 10 days. Honestly it was pretty solid. So I'm officially candidating to takeover from Sundar, I will do it for 10% of his pay, which should help Alphabet to return to positive FCF.

alloutofchewingum

Look I own a few hundred shares. But you're missing the key issue which is the potential CAPEX overhang they face. People have been screaming for a decade that HFC is competitive with GPON due to DOCSIS 3.O, 3.1 etc etc. And GPON keeps taking share from HFC globally. This issue basically caused Vodafone to be broken up and sold for parts. So the question is what FCF looks like if they need to sink tens of billions into GPON upgrades just to keep the share they have today.

EmbarrassedPart1256

Thanks for following up, taking my post seriously, & responding in a kind way! I'm glad I'm not the only one who sees some interesting details here. How long have you been watching it? Do you have a target entry price or do you want to see a more concrete catalyst? Running the FCF detail through Google (as I was more focused on buying shares than listening to the ER conference call), $WU leadership detailed that the dividend is covered & that the second half of the year is typically seasonally stronger. It's like you said, there are definitely a lot of speculative situations that have to play put for a clearer picture, but I wanted to dip my toes in just in case this dip doesn't last & the yield goes down. I'm glad you see the Reddit angle too, although the "save Wendy's" movement & the "squeeze $XRX" movement were both a bit misguided IMO; the difference with $WU is that I believe the value pro\[position is a lot higher than with $WEN, $XRX, or even $GME; between buying shares & earning a dividend, potential capital appreciation, & running an options strategy as well, there's money to be made here off of the institutions that're clearly hedging their bets. Somehow my posts never seem to make a difference on here; I always get called out for "shilling." I'm now banned on various email addresses from posting on ST, even though my approach was never "pumping" a stock while P&Ds run rampant on there. Perhaps my ideas just don't have an army of people mirroring my posts with their own just to keep the idea in people's minds...

dustinut

Watching this one. The near 15% dividend has a \~98% FCF payout ratio, so not sustainable. Their turnaround narrative hinges on the Intermex acquisition getting approved (NY is the last holdout; if it goes through it'll likely be with concessions), digitalization improvements, and cost reductions. WU's "Branded Digital" ecosystem is gaining traction; up 25% YOY in Q2, accounting for 43% of all corporate transfers. BUT, digitalization is less expensive and less profitable than face-to-face retail transfers, so even with digital transaction volumes going up, total revenue and margins are shrinking because digital users pay much lower fees (due to intense competition from fintech apps like Wise and Remitly). I can see this getting squeezed with a positive catalyst and sufficient retail hype like when Reddit was like "Let's save Wendy's!" lol.

Successful_Car1670

FCF? And bond issuances? ORCL bonds are almost junk status. How everyone gonna pay coupon when demand dries up out of fear. Used to only be a few clouds now everyone getting in the game prob start undercutting each other on price

Truck-Conscious

I don’t think you understand what FCF negative means. They have literal piles of billions in reserve cash just sitting around. 

imacyco

How are they supposed to buy them when they're FCF negative?

wafflepiezz

Yeah it was a massive overreaction imo. FCF of -$5b, first time ever in Google’s history, but $5b is pennies to Google

PMmeuroneweirdtrick

Yes in that you know the lingo like EBITDA, FCF etc which can be helpful but it's not difficult to learn. I invest off vibes anyway. I spend my week in financial statements at work I havr no interest in applying that shit to investing.

hseeman_sf

Net income isn't the right yardstick for a dividend payout call though. D&A is real cash that gets added back for FCF purposes, and a restaurant business like this carries a lot of it. Worth checking FCF for the period before calling $2.1B against $1.85B in earnings unsustainable, that gap could close a lot once you account for D&A alone.

WorkSucks135

My point is that a key ingredient of every bubble ever is reckless use of leverage. The AI buildout in its current form is not highly levered. And FCF didn't "disappear". They *used* it. FCF isn't a one time windfall. The minute they stop using it, there it is.

visionarymind

I made $7.30 selling GOOGL @ $346.50 after bagHODLing thru ER Now it’s $358 because issues with FCF no longer matter Got it

spectacular_coitus

As a daily user I see the ads increasing, but across the different social media platforms, Reddit ads have been the least intrusive by far. Growing ad revenue is great to see. Hitting 1B in FCF for the first time was good news too. Advertisers are seeing good returns too. This drop has pushed the price below my buy in by a bit but I'm adding more shares today. The calls I've been selling have had a great return so far. I've had the shares called away a couple of times, but the volatility has meant I could get them back at the same price within 48 hours.

Ethraelus

Negative FCF is just investing in committed demand. In 3 years we’ll see where demand is and whether the sector as a whole has overbuilt (I think the answer will be no), but the current negative FCF seems like just good business. As an investor that’s what I want them to do to compound growth.