FCF

InquisitorCOC

Based on WS estimates, they don't believe themselves OpenAI can come up with that kind money For example, they expect hyperscaler capex $381, $471, $543 billion from 2025-2027, which implies only 23.6% and 15.3% growth for the next 2 years But already in this year, the combined TTM operating cash flow of Amazon, Google, Meta, and Microsoft grew 29% over the previous period. In Q3 2025, their OCF growth is definitely accelerating: - Amazon 37% - Google 58% - Microsoft 32% - Meta is the only laggard at 21%, and sees its stock punished Despite their rapid capex increase this year, these 4 still field $205 billion in TTM FCF. If their future capex growth only matches their OCF growth for the past 12 months, then WS estimates are crazily **conservative** It's possible that they **can't spend** as much as they want, because the current bottleneck is in power generation, not GPUs Finally, their capex mostly goes into semiconductors, and Nvidia especially. The money is still out there and investable. Nvidia has already shown great willingness to **reinvest** much of its FCF back into the infrastructure

MutaliskGluon

The headline numbers mean nothing. We need to see the filings, thats where the fun begins :) I cant wait to see the balance sheet and FCF calculations

MutaliskGluon

you listed 1 stock. FCF growth is not robust overall when comparing to EPS growth across the market.

RamCockUpMyAss

NVDA FCF is skyrocketing right now, $72B for 2025. These companies are literally printing money and you are concerned

MutaliskGluon

and because of accounting magic. If we reported on FCF instead of EPS people would not be so bullish

MagnesiumKitten

Keep talking about the one metric like your life depended on it then. Fine, let's discuss the Gross Margin It's mediocre when you compare it to other defense and aerospace companies, but as for the history of Rolls-Rotice it's in okay territory the margins on Net, Operating, FCF, EBITDA are all peachy but overall it's still mediocre with Profitability Rolls-Royce revenue per share has been sliding for the past 5 years to me that's way more important than you obsessing over Gross Margins which as I've said perform well in one way, and do not perform well in another way rant all you want about how the sky is fucking blue, it doesn't change any of my comments. And as for the analyst targets, I guess you can take it or leave it, as well And sure you can make money October 2023 to July 2025 with Rolls Royce that's how high risk stocks go, you get lucky But you got this wildly optimistic view for the future of the stock something the analysts aren't exactly in agreement over If you want to live in a bubble about Rolls-Royce, great but you're hardly the mainstream view on it

Hambone6991

Hence why FCF is king

Ok-Day-8425

The rationale is because depreciation and amortization, while “real” are non-cash in nature. They approximate overtime usage of capital investments (capex) but there is a timing difference between capex and depreciation. The metric commonality used in my profession is cash EBITDA or FCF, which removes D&A but then layers in capex. The rationale why income taxes and interest are removed is because they are entirely dependent on tax and capital structure, which differs greatly across companies, industry, etc. EBITDA is commonly used as a comparison metric (so makes sense to remove items that will are not driven by operations, like tax structure) and also valuations (e.g. if I’m going to buy your company, I will have a different capital structure than you, I don’t care about the PL effects of your capital structure). And when a company presents adjusted EBITDA, you better believe those adjustments get heavily scrutinized before anyone takes action. In fact, there’s entire professions that revolve around diligencing those adjustments.

Pretend-Mark7377

Meta isn’t running off-books bonds, and majors haven’t stopped buybacks. Meta issued \~$10B debt in 2022 on-balance-sheet; Apple’s $110B and Alphabet’s $70B show buybacks are alive. AI capex is up but FCF is still solid-check the 10-Q. I track with Koyfin and YCharts; for idle cash, Fidelity T-bills or gainbridge.io. Bottom line: heavy AI spend alongside active buybacks, not Enron-style stuff.Meta isn’t running off-books bonds, and majors haven’t stopped buybacks. Meta issued \~$10B debt in 2022 on-balance-sheet; Apple’s $110B and Alphabet’s $70B show buybacks are alive. AI capex is up but FCF is still solid-check the 10-Q. I track with Koyfin and YCharts; for idle cash, Fidelity T-bills or gainbridge.io. Bottom line: heavy AI spend alongside active buybacks, not Enron-style stuff.

cakeandale

> The Dot-Com bubble was driven by speculation on a concept. The "Web" Hype: Investors were so hyped about the potential of the internet that they threw money at anything with ".com" in its name. That sounds similar to me. > The "Companies": The vast majority of these companies were burning cash, had zero (or negligible) revenue, and were years away from any profitability. Which of the AI leaders are profitable now? How many of them are also years away from any profitability? > The Metrics: No one cared about free cash flow (FCF), revenue growth, or balance sheets. It was 100% hype. When the money ran out, they collapsed. I have never heard anyone care about any of those things, just how much money is being invested by the market or other AI companies. Which parts of these elements of the last crash are you saying are supposed to be different this time?

M000lie

Meta earnings crippled because of the one time non cash tax charge. Did we read the same report? It doesn’t affect their FCF or operational efficiency. They will continue to make tens of billions in the coming quarters especially now that they will face lower effective tax rates after deducting the tax credits this quarter

rpat2550

Correct, apart from Tesla, the companies with the deepest pockets and highest FCF have the ability and are investing into building out AI in a race of computing power to obtain the most superior models.

Desmater

Gotta use that FCF.

Punchmeinmyface25

They cure cancer. They make ton of FCF. Pay 7% dividend. I love Pfe

hil_ton

only thing that should matter is FCF and net profits.

yobabbymomsdaddy

I started taking a position in TOST on the drawdown. Reported its best quarter this week. Expanded its FCF by 50% YoY and growing at a solid 30% annually. Margins are improving to the tune of 20%+ and trades at a very reasonable forward PE for that growth. Additionally, how did you get to a 1.2%? By my calculations, it is more like a 3% FCF yield based on their guidance of $613 mil for the year.

barrybadhoer

I bought it a few months ago, but sold around 4-5. from what i could see they ditched their European assets and bought an already operational 5GW solar panel assembly plant in the US, with the plan of eventually sourcing material and producing as much as possible in the US. i invested because if the plant is running at the 5MW capacity their revenue would be around 1800 million, and they had a backlog of like 1.75MW a few months ago and sight on more orders. so they had a market cap of \~200 million (and like 800m debt so ev of 1b) and a facility that could produce 1800m annually. my reasoning was that if they could somewhat max out production and eek out a \~5-10% free cash flow margin thats an EV/FCF of \~1 to \~3 which seemed cheap. now its pretty much what my DCF mdel suggests is fair value so i sold but might get back in if it drops a lot further and trump doesn't stifle green energy to much.

mdatwood

According to Google, Worldcom's FCF peak was ~580M. There was also fraud, etc... involved. MSFT's FCF from operations last quarter was ~25B. I don't think people fully understand just how much money big tech was making prior to AI coming along. Now instead of giving that money back to investors through dividends or buybacks they are directing a large portion to AI investments.

EnoughValuable8025

Look at the chart of big tech's FCF and capex. Once the gap between the two shrinks considerably, then you can start to worry. Until then, enjoy the gains!

_hiddenscout

$CW * Reported sales of $869 million, up 9%, operating income of $166 million, operating margin of 19.1%, and diluted earnings per share (EPS) of $3.31; * Adjusted operating income of $170 million, up 14%; * Adjusted operating margin of 19.6%, up 90 basis points; * Adjusted diluted EPS of $3.40, up 14%; * New orders of $927 million, up 8%, reflected a 1.1x book-to-bill; * Backlog of $3.9 billion, up 14% year-to-date; and * Free cash flow (FCF) of $176 million, generating 137% FCF conversion. **Raised Full-Year** **2025 Adjusted Financial Outlook:** * Sales guidance increased to new range of 10% to 11% growth (previously 9% to 10%), which continues to reflect growth in the majority of Curtiss-Wright's end markets; * Operating income guidance increased to new range of 16% to 19% growth (previously 15% to 18%); * Operating margin guidance range of 18.5% to 18.7%, up 100 to 120 basis points compared with the prior year; * Diluted EPS guidance increased to new range of $12.95 to $13.20, now up 19% to 21% (previously $12.70 to $13.00, up 16% to 19%); and * FCF guidance range of $520 to $535 million, which continues to reflect greater than 105% FCF conversion. "In the third quarter, Curtiss-Wright continued to deliver strong results under our Pivot to Growth strategy, with higher revenues and growth in operating income across all three segments,” said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. "We achieved adjusted operating margin of 19.6%, mid-teens growth in diluted EPS and improved free cash flow generation. We also demonstrated solid order growth of 8%, yielding an overall book-to-bill of 1.1x. Based on our strong year-to-date performance, we have raised our full-year guidance for sales, operating income and diluted EPS." "In addition, we recently expanded our 2025 share repurchase program, targeting a new record in annual share repurchases of more than $450 million. This return of capital to shareholders reflects the Company's confident outlook and demonstrates our commitment to leveraging our strong balance sheet in support of disciplined capital allocation.""

InevitableSwan7

Trades at very high FCF but I scooped more up @ 560

CannaVestments

Solid Q3 showing from Trulieve: revenue was in-line with expectations considering the seasonally weaker quarter in AZ/FL while margins came in nicely above expectations. The FL machine continues to operate at a high caliber despite price declines and increased competition in the state, as the company again leads the charge on spending ahead of another AU initiative in the state ($34M spent YTD). The cash flow profile and balance sheet continue to be dictated by their ongoing challenge of 280e with strong press release numbers and now an indication to pay down the majority of their debt in Q4, but alongside significant unpaid taxes that continue to accumulate under the UTP (now $616M). Looking ahead, few changes on the horizon for most of their core markets with potential for adult-use in FL/PA although certainty on those states remains murky. Full review: **Revenue:**  QoQ: $302.1M to $288.2M / YoY: $284.3M to $288.2M *Down 4.6% QoQ and up 1.3% YoY, in-line with analysts consensus of $288M during the seasonally weaker Q3 in FL/AZ. Trulieve opened 1 new store in OH during the quarter, and relocated 1 AZ store so largely working off the same base.* **Adjusted EBIDTA:**  QoQ: $110.6M to $102.7M / YoY: $96.1M to $102.7M *Down 7.1% sequentially but up 6.9% YoY, nicely ahead of expectations of $96M. Industry-leading margins remained strong at 36% in the quarter, down from 37% in Q2 but up from 34% last year. Note that 6.3M in campaign contributions (now $33.7M YTD), $8.8M in one-time costs, and $5.8M in SBC were removed from this figure.* **Gross Margins:**  QoQ: 61% to 59% / YoY: 61% to 59% *Down slightly QoQ and YoY but still at very strong levels.* **Operating Expenses:**  QoQ: $130.3M to $127.6M / YoY: $172.7M to $127.6M *Nice cost control sequentially and a big drop YoY (largely due to a $48M campaign expense last year). Removing the campaign expenses, OpEx was $121.3M here compared to $125.9M in Q2 and $124.3M last year.* **Operational Cash Flow:**  QoQ: $86.1M to $76.8M / YoY: $30.3M to $76.8M *Good headline number but always have to factor in unpaid taxes. Tax-adjusted OCF was +$20.2M in Q3 and now $+42.5M YTD ($76.2M if you factor out the campaign contributions). This compares to +$37M in the first 3 quarters of 2024 and +$99.7M if you factor out campaign contributions so actually down this year apples-to-apples. CapEx was $12.3M in the quarter and $40.8M YTD so just above break-even on FCF when factoring in unpaid taxes.* **Cash:**  QoQ: $392.6M to $449.2M / YoY: $238.8M to $449.2M *Cash rise continues driven by positive OCF, although the uncertain tax position along with it. Debt stands at $477.5M with Trulieve indicating they will pay off $368M of notes in December. The uncertain tax position now stands at $616.3M and will continue to rise*

RiPFrozone

Today it trades at 166x FCF and 67x 2027 FCF It’s got a long ways to go to even be considered undervalued. The underlying business and story is good, but the stock has definitely got ahead of itself these past few years.

yobabbymomsdaddy

Yes, of course. What investor hasn’t! Every position is different and there is so rarely a one size fits all. It is always a learning experience. Im going through this now with tost stock. It reported yesterday, 50% increase in free cash flow YoY, 30% increase in ARR YoY. I bought it down 27% going into the print. Barely up today and it’s flat on the YTD. It’s not really an AI stock and I’m assuming it is the economic back drop that is concerning for the market but idk. Bottom line, it is down 27% from the ATH and up 50% in FCF from a year ago. I think i just need to wait.

Fit_Swordfish558

I have the same line of thinking. Strong brand, sticky product, network effect, increasing paid-subs, AI-loser narrative overhyped, 65%+ of language learning market share, energy system will increase arpu, social media strong, little to no CAC, love the company and also the optionality with new verticals (I saw some people talking about coding and ESL potentially). Also strong financials and 30% FCF margin I believe and trading at multi-year lows for valuation multiples. I'm looking at paid subs, user growth in chess, and management's vision for fy2026 and beyond. I have some models from equity research coverage if you'd like to see...

CanYouPleaseChill

Because he's a clown. Share count keeps going up. Their adjusted FCF guidance for FY2025 is around 2B. At a market cap of 491B, that's a P/FCF of 245. It's even higher if you subtract share-based compensation, which one should. And they have the audacity to write "Crushing Consensus Expectations" in the earnings release. The valuation is a joke.

RampantPrototyping

I think their FCF allowing them to buy back so many shares a makes its a great long term value hold, but it could take a long while to see it in the share price

AzureDreamer

Its a boring company, maybe its a melting ice cube I don't believe that I think over 10 years it will have 1-5% growth if you spend a decade yielding 16% FCF an investor cannot help but do well imo.

CanYouPleaseChill

Share count keeps going up. Their adjusted FCF guidance for 2025 is 1.9-2.1B. At a market cap of 491B, that's a P/FCF of 245. It's even higher if you subtract share-based compensation, which one should. And they have the audacity to write "Crushing Consensus Expectations" in the earnings release. The valuation is a joke.

M-spar

Not much risk with the market cap where it's at and FCF that the company will produce going forward.

InquisitorCOC

Big tech earnings are excellent Google's is the most impressive. They grew their operating cash flow by a whopping 58%, so despite raising capex by 89%, their free cash flow still grew by $7 billion in absolute term over a year ago Amazon's earning is good as the AWS revenue growth deceleration has reversed. But its free cash flow has now been exhausted, so any capex increase beyond the growth of its operating cash flow requires tapping the credit market Microsoft's looks great on paper, but it chickened out earlier in the year and must now pay more to play catch up, hence the stock underperformance after ER Meta's is also great, but Zuck is spending like a drunken sailor again. With the memory of the 70% plunge in 2022 still fresh, investors are justifiably worried. Plus Meta's own model sucks, and there's obvious power struggle going on inside the company Apple is hopelessly behind in AI, and continues milking off its iPhone user base. It still generates good FCF, but worth a PE of 40?

Desmater

They will have to spend a lot of CAPEX to build out infrastructure. While the competition in the industry has FCF to do so.

Ok_Tension_4564

* My take, fundamentals / leadership performance. Or just food for thought: 🔹 **Fundamentals** • Wilson-Davis net income +49% • 3 clearing clients onboarded • Legacy liabilities cut 83% • Awaiting full 10-Q * **Leadership** • John Schaible: NexTrade, MatchbookFX • Craig Ridenhour: 30+ yrs FINRA-licensed • Strong fintech DNA, but past ventures = high risk/high reward * **Capital Structure** • $20M financing closed • Convertibles priced at $0.60–$0.75 • Insider ownership: 0.02% • Institutional: 0.41% * **Valuation** • Current price: $0.37 • Monte Carlo EV/share ≈ $2.10 • Deep-value thesis hinges on margin + client scale-up **Discussion Points** • Can they turn clearing traction into durable FCF? • Will dilution cap upside? • Is this a fintech infrastructure sleeper? These are based on EV/Sales multiples, clearing revenue growth, and dilution-adjusted equity value: |Scenario|Target Price| |:-|:-| |Turnaround|**$6.00/share** → assumes strong execution and multiple expansion| |Survival|**$2.25/share** → assumes modest growth and conservative multiple| |Bankruptcy|**$0.25/share** → assumes severe dilution or restructuring| The actuals would result in a $2.40 EV/share, but I ere on the more conservative $2.10 side. Not an analyst, just an enthusiast. Only in at 2K shares at 0.36 when it dipped recently. Looking DCA on more dip, otherwise hold, as the following factors concern me: * Low insider ownership * Aggressive capital history (past ventures (e.g., NexTrade, AtlasBanc) succeeded in infrastructure but didn’t always deliver durable returns to public investors.) * Press releases are optimistic but lack granular financials. * If share count increases by 50–100% due to conversions, the **realised upside per share drops proportionally**.

LongNVDA

The only bubble is OAI, MAG7 is justified capex given growth rates and FCF. So look at companies who are exposed to those fictitious trillion dollar OAI spending deals..

Mrsquare2002

respectfully this is mostly waffle. pure waffle. The business's past is not relevant as VEVYE was only acquired a few years ago, they've now added two biosimilars and IHEEZO + TRIESENCE. Management has RSUs vesting at $100 + they've guided for $250m revenue or $1bn run rate revenue by 2028. That would equate to around $12.5 dollars per share in FCF. So its trading at 3x 2028 FCF. Their business model is distribution, which is why they've managed to acquire most of those drugs for very little upfront capital. Price to book is pointless in pharma as most of the assets are intangibles anyway. Case in point VEVYE they bought it for $8m it will do more than $100m in 2027. Yet the value on the books will be $8m, so again pointless.

FastAssSister

How else do we know you can pick stocks? Every single stock price in history has followed the company’s FCF/share over the long run. As Buffett has, if you buy businesses—not pieces of paper, as most hedge funds do—but businesses that compounded their cash FCF/share, you will win. While difficult, this is nowhere near impossible. Not even close. Except people are stupid, emotional, and lazy, and believe things on their face like yOU cAn’T bEaT thE maRkET. Except the best investors do. Over and over and over again. Literally zero chance this is a coincidence, when every single one of them follows them the same principles. Now let’s look at market timing. Please point out one billionaire who cites market timing as their strategy. I’ll wait. But I won’t hold my breath. Because they don’t exist.

highmemelord67

Thanks for the comment! Yes i am using a discounted model, but a variation I have made that allows me to do models for FCF, EPS and revenue. I explain more in detail in the article where i link to how I do the calculations, where I also do an example go through with google. But to get the answers for filters and calculations, you can read the article :)

Desperate_Bath_4299

Even so, its also 15x p/b, terrible FCF per share. No debt but also almost no tangible growth assets. At least Meta, Google, Apple own their data centres and labs designing AI chips

feenixOmlette

Everyone is saying chipotle big disappointment. Did you guys even read the actual report or just the CEO and media buzz? --- Tldr Place is profitable and decently run business making good money with growing cash flows. CEO spouts some inane bullshit about genZ, price crashes 50%. Probably so he can buy more shares cheaply from idiots. analyze Chipotle's latest earnings releases etc. independently ignoring critics and news but actually looking at the numbers analyse the business from a revenue, EBITDA, cashflow and balance statement perspective Chipotle's latest quarterly results reveal a business continuing to grow but now facing sharper macroeconomic headwinds and margin compression. The analysis below is based purely on their reported numbers and not on media reaction or external commentary. ### Revenue Trends - Q3 2025 revenue hit $3.0 billion, up 7.5% year-on-year. This growth was mainly driven by new restaurant openings, with comparable restaurant sales up just 0.3%. Growth in average check size (up 1.1%) only partially offset a 0.8% decline in transactions, indicating both pricing and volume pressures[1][2][3]. - Digital sales remain a strength, at 36.7% of food and beverage revenue[1]. ### Profitability and EBITDA - Chipotle’s operating margin decreased to 15.9% from 16.9% the prior year[1][2][4]. - Restaurant-level margin also dropped slightly to 24.5% from 25.5% last year, signifying inflation and possibly waning pricing power[1]. - Estimated trailing-twelve-month (ttm) EBITDA is $2.34B on about $12.5B revenue, with a margin in the 20% range. For Q3 specifically, EBITDA margin is roughly in line with company forecasts at ~20%[5][6][7]. - Net income for Q3 was $382.1 million, or $0.29 per share, representing only a slight year-on-year gain versus $387.4 million and $0.28 per share last year[8]. ### Cash Flow Analysis - Free cash flow (FCF) for the trailing twelve months remains robust at over $1.4 billion, although 2025 may see a slight dip versus 2024 as capex accelerates with store openings[6][7]. - Capex for 2025 is projected at nearly $676 million, suggesting reinvestment intensity is up (about 27.6% of EBITDA)[7]. FCF margins, however, remain strong at around 11–12%[7]. - Operating cash flow growth has been strong in recent years, nearly tripling since 2020, supporting continued expansion[9]. ### Balance Sheet Strength - Cash position is about $1.55B, and net debt is essentially zero given Chipotle’s longstanding asset-light, unleveraged model[5][10]. - Book value per share continues to climb, now around $2.7/share with a projected year-end book value of $2.7–$3.0 per share[7]. - The company maintains high returns on equity (ROE mid-40% range) with minimal leverage[7]. - Capital intensity remains moderate, closely managed, with capex to FCF ratios stabilizing in the 40–50% range, supporting sustainable self-funded growth[7]. ### Summary Table: Fiscal Health Snapshot | Metric | Q3 2025 / TTM Value | Trend | |-------------------------------|---------------------------|------------| | Revenue | $3.0B (Q3) / $12.5B (TTM) | ↑ YoY | | Comparable Sales Growth | +0.3% | ↓ vs prior | | Operating Margin | 15.9% | ↓ YoY | | Net Income | $382M (Q3) | ≈ Flat YoY | | EBITDA (TTM) | $2.34B | Stable | | Free Cash Flow (TTM) | $1.4B+ | Slight ↓ | | Capex (2025 est) | $676M | ↑ | | Cash Position | $1.55B | High/stable| | Net Debt | $0 | N/A | | Book Value per Share | ~$2.7 | ↑ | | ROE | ~45% | ↑ | ### Core Takeaways - Chipotle's financials still show solid growth and excellent cash flow conversion, but comparable sales and traffic are faltering[1][2][11]. - Margin compression (in operating/restaurant lines) and slowed transaction growth are key operating risks. - Balance sheet robustness and high returns on capital remain a distinct strength, enabling reinvestment without new debt[5][10][7]. From a pure numbers perspective, Chipotle remains highly profitable with conservative financial structure, but its near-term momentum is softening as inflation and consumer sensitivity weigh on sales and margins[1][2][7].

Mariox

If PLTR posts a 60% revenue growth and guides for at least 55% in Q4 it will hold up. The P/E will start to fall very fast the same with forward earnings as analysts continue to move up their estimates after each earnings. my fair value in 2030 based on FCF is $427 and with 35% growth and 80% margins the stock should be around $600. This is based on Karp's guidance of 10x US revenue over the next 5 years and me assuming very little international growth. Don't matter who controls congress or white house, the growth will be coming from commercial. Funny seeing people think PLTR does surveillance and they collect data. That isn't what they do.

UnitedDengistFront

>there is some material boost to earnings To the cashflow statement you mean. Look at FCF yield charts for big tech companies over a few years. They're way down. It's all been priced in.

Happy_Discussion_536

Oh no.... FCF will skyrocket and buybacks will soar. How awful.

easye_was_murdered

They are investing that FCF for future growth in AWS.

MutaliskGluon

Or just ignore FCF and look at non GAAP earnings like amzn. Amzn should be red with those numbers yikes.

MutaliskGluon

EPS numbers look great in there reports. But you can creatively account to make that so. FCF numbers look fucking DOGSHIT in these reports, which you cannot creatively account away. How the fuck is amzn up 13% with that FCF decrease. We're really pumping 13% on a 1 time gain when operating income and cash flows are flat and negative. Jesus christ this bubble is so inflated this is insane

MitchCurry

And their operating income is on pace to be \~$78B this year, growth of 12%. Drop that growth to 5% in 2026 and operating income is still $82B which would easily filter down to being FCF positive with $70B in AI capex. They could be FCF positive this year YTD with $70B in capex.

MitchCurry

I'm as anti-Zuck/anti-Facebook as they come, but even I wouldn't say something this inane. It takes 12 seconds to find Meta's ER and see they generated $11B in FCF in Q3 and $31B YTD.

_hiddenscout

Solid quarter from $HII Revenue: $3.2B vs. $2.95B est. (+16% Y/Y) EPS: $3.68 vs. $3.36 est. (+44% Y/Y) Company posts strong FCF beat, +$16M vs. -$150M est. Raises FY2025 FCF guidance to $550-$650M.

Either-Lie-9000

META choosing to burn FCF instead of buyback kinda gives me hope. when mag7 CapEx slows the carousel stops

Humble-Cantaloupe-73

The Trillion-Dollar Text Box: Why OpenAI’s IPO Is the Mother of All Hype Bubbles Reuters breathlessly reports that OpenAI? (yes, the outfit that sells you a blinking cursor for $20 a month) is “laying groundwork” for a $1 trillion IPO, potentially as soon as late 2026. Let that sink in: a company burning $15 billion this year, with no path to profit, wants to be valued like Apple + Tesla combined. Their CFO, Sarah Friar (ex-Nextdoor, the ghost town of social apps), whispers 2027 to insiders while bankers salivate over a $60 billion raise. This isn’t a business plan; it’s a heist dressed in PowerPoint. The product? A text box. The moat? Habit. The switching cost? Zero. Grok, ChatGPT, Claude, DeepSeek: they’re all the fucking same. If one charges a penny more, we bolt. Coca-Cola owned childhood; Ducati owns my midlife crisis. OpenAI owns nothing but our muscle memory. Brand dominance? In LLMs, that’s a punchline. Google flipped the script in 48 hours with Gemini 1.5. DeepSeek will do it next week at 1/10th the price. The only “loyalty” here is the laziness of not opening a new tab. The Moat Is a Mirage. It’s Already Crumbling OpenAI’s supposed superpowers? data, feedback loops, “human preference alignment”; are commodity slop. Reddit, arXiv, and the open web are scraped by everyone. xAI slurps X in real time. Anthropic trains on constitutional principles any intern can copy. The only path to lock-in is enterprise plumbing: APIs jammed into Slack, Salesforce, Figma with memory, permissions, and audit trails that CIOs pay to avoid rebuilding. Microsoft tries this with Copilot ($30/user/month bolted to O365), but it’s fragile as glass Slack can swap in Claude tomorrow. Consumers? Doomed. The second a Chinese open-weight model matches o3 at $0.01 per million tokens, every non-technical user jumps. Price is quality in this game. A $0.10 token premium is as defensible as a Blockbuster late fee. Meanwhile, OpenAI bleeds $20 billion annually on capex just to stay in the race. NVIDIA makes 75% margins selling the picks and shovels. OpenAI? Negative gross margins on inference. This isn’t a tech company; it’s a government-subsidized science project. Regulatory “Moats” Are Just Handcuffs in Disguise The last-ditch bull case: regulation will save them. EU AI Act, U.S. safety mandates, “certified” models with audit trails? As if : only Big Tech can comply, right? Wrong. That turns OpenAI into a regulated utility, not a growth stock. You’ll pay $20/month not because ChatGPT is better, but because your insurer demands it. Congratulations: you’ve built ConEd for chatbots. Meanwhile, the FTC is probing, copyright lawsuits stack $100 billion in contingent risk, and Sam Altman’s 2023 boardroom coup still reeks of governance rot. A non-profit shell still looms over the cap table like a guillotine. Employees will bail when RSUs dilute at $1 trillion. This isn’t a company; it’s a legal Jenga tower waiting for one wrong move. $1 Trillion? That’s Not Valuation; That’s Delusion Crunch the numbers: $15–20 billion 2026 revenue, 50–67x sales, 500x EBITDA (if any), capex eating 100%+ of revenue. NVIDIA trades at 35x with $100 billion FCF. Meta at 9x with 40% margins. Even peak-2021 Tesla was “only” 25x unprofitable sales. OpenAI at $1 trillion is priced for AGI yesterday. Fair value? $600 billion base case (15x $40 billion 2027 revenue). Bear case: $160 billion. The $1 trillion fantasy is 67% air. IPO day? Sure, retail FOMO might pop it 30%. Six months later, when $20 billion losses hit the 10-K and lockups expire? 50% crash incoming. This is WeWork 2.0: narrative over numbers. Smart money shorts the pop, buys puts, and waits for secondary sales at $300 billion. Keep switching LLM's. The only “brand” that matters is who controls the pipe: Azure, GCP, Oracle. Bet on them. OpenAI? Just another text box in a race to zero.

kickoff_advertising

I’m with you—it feels euphoric *and* fragile at the same time. Two things can be true: * AI revenue is real (hyperscaler capex, GPU backlogs, software adoption), **and** prices can run ahead of fundamentals via reflexivity and FOMO. * Near-term momentum can continue, **and** the payoff curve for AI may be lumpier than the market’s straight line. How I’m thinking about it (not advice): * **Watch the “plumbing,” not headlines:** hyperscaler capex guidance, data-center power build-outs, lead times, memory pricing, and actual AI software revenue (not just “AI mentions”). If those flatten, multiples usually follow. * **Follow free cash flow math:** FCF yield, gross margin trajectory, and capex as a % of revenue. Great stories still have to convert to cash. * **Position sizing > predictions:** I trim into vertical ramps, ladder entries on dips, avoid leverage, and keep a small hedge so I don’t have to “be right” on timing. * **Differentiate within “AI”:** picks-and-shovels (power, cooling, optical, memory) vs. model providers vs. application layer. The cycle won’t reward them equally.

MutaliskGluon

FCF and OI havent been as good as EPS due to all the "creative accounting" everyone does nowadays. Comparing PE now to PE back in 1999 shows that this bubble has a lot of room to run. Comparing FCF:EV now to 1999 shows that anothewr 20% gain in SPY from here puts us as more overvalued than even 1999

jrex035

Of course it is, they're dumping all of their FCF into AI infrastructure. In fact, FCF for hyperscalers is the lowest its been in decades. They better hope the payoff is better than META's investment in the metaverse, otherwise the whole market and economy will go tits up soon

FoodCooker62

FCF terrible measure for palantir wirh share based compensation out of control. Its like 20% of revenue.

OSRSkarma

Why buy growing companies with ridiculous FCF I should just buy vaporware How fucking stupid am i

CanYouPleaseChill

Look at FCF - SBC. Big Tech is a lot more expensive than it looks. Also, why are we comparing Big Tech to Dot Com startups? Big Tech is much more comparable to the Four Horsemen of the Dot Com bubble: Dell, Cisco, Microsoft, Intel. These companies were all very profitable and ushering in a new era of mass communication. Their stocks still fell dramatically. The equivalent of Dot Com startups are all the unprofitable shitcos around now, and there are plenty of them. A bubble doesn’t have to be an exact repeat of the past to be very similar in spirit and absolutely still a bubble.

CanYouPleaseChill

Look at FCF - SBC, not net income.

insightful_pancake

In aggregate, they are paying cash, handsomely. Nvda had over $60Bn in FCF in FYE2025 from $27Bn the prior year. Until that trend changes, I’m bullish on nvidias fundamentals (not necessarily the stock).

thenuttyhazlenut

Honestly, I couldn't find anything specific to the company relating to why it dropped today. All Chinese fintechs are down right now. QFIN was downgraded yesterday by an analyst, and a few days ago when asked about QFIN Jim Cramer said he's not interested in Chinese fintechs, but that's it lol. I have it trading at about 2.1 P/FCF right now which is ridiculous. 27% ROIC, modest revenue growth, big repurchases, and the big dividend. I feel like it can easily pop +50% over a few months when it finally recovers.

According_Fish_1248

Alphabet ($GOOGL) reports earnings tomorrow. Analysts expect EPS ~$2.25 on revenue near $94B (+10% YoY). Cloud and AI investments are front and center — with ad/search growth stabilizing but margins likely tightening. Key factors to watch: • Cloud momentum — can they stay above 25% growth? • Ad revenue resilience vs TikTok, Meta, and AI search • CapEx — AI infra spending might pressure FCF • Guidance for Q4 and FY2025 Options market is implying a ~4% move post-earnings. So what’s the bet — earnings beat and breakout, or AI spending hangover incoming?

The_Hindu_Hammer

In a market where everything seems overpriced PYPL is actually a great deal. 16 PE, 2.3 PS, 14 P/FCF, massive share buybacks, and now dividend, earnings beat, guidance raised, and OpenAI partnership. I'm buying.

The_Hindu_Hammer

In a market where everything seems overpriced PYPL is actually a great deal. 16 PE, 2.3 PS, 14 P/FCF, massive share buybacks, and now dividend, guidance beat, and OpenAI partnership. I'm buying.

Tathorn

It's all about discounts to FCF and outputs like dividends and buybacks. No one should assume buybacks grow a company. It literally does the opposite. That's like assuming dividends grow a company.

Beautiful_Lettuce603

"Aggressive" is not in absolute terms but in %Market Cap or %FCF. Look at stocks like Crox, Adobe

Gandalfderblaue41

Which bubble...yeah AI Stocks are running hot...but the companies also show growing margins, NTR, more FCF... Other sectors like medicine are not very good at the moment....

Psychological-Wish51

Entered my position on Friday. It’s a pretty obvious interest rate play, with very little downside. Name another company with $7B in FCF.

five__head

Are my Screener settings good to find generally undervalued stocks that i can look further into: P/E < 15 Marketcap > 5B P/B Ratio < 2 Debt to equity Ratio < 0,8 Beta 5 Years < 1,2 P/FCF < 20 EPS Growth 5Y: > 10%

vnilsen

Great input. Thank you. It makes sense that using P/FCF growth for a single quarter can be unstable as there can be one off expenses. I think an average FCF would make more sense if i want to include CapEx and do growth valuations on it. It seems like what i was trying to look for was EV/EBITDA/growth as you mentioned. I will try to include it in my spreadsheet. Cheers!

Weak-Pomegranate-435

If u dont want to use earnings which are skewed by Depreciation and Amortization. Then u use EBITDA, not FCF. FCF is not reliable metric for a business’s picture. And I recommend u to use EV/EBITDA instead of P/EBITDA.. bcz that includes and penalizes any debt which they may have taken or reward the company if they have alot of cash on their balance sheet.. I also use EV/EBITDA/G alot of time, bcz i cant use PEG for cyclical stocks bcz they very ofter show misleading picture..

AnotherThroneAway

It's a fair concern, but it's not actually concerning until debt and leverage come in. Which, so far, hasn't been happening due to these insane COH, FCF and fortress balance sheets of the hyperscalers

mortazavi11

Are you dumb or willfully ignoring the chart on FCF

callmecrude

It’s a fantastic business that got ahead of itself during covid and has been unjustifiably left in the dog house ever since. I’ll happily keep buying at these prices and hoping it drops lower to accumulate more. You literally can’t find another company in the entire stock market trading so cheaply right now that consistently grows revenue, has low/no debt, huge FCF, and strong margins.

cabinstudio

LPSN. Only 4.5 million share float. Company projected to be profitable next year, possibly this year (or break even) Once FCF starts flowing, possibility the market applies a growth multiple to the stock price. Currently trades around .2x revenue. Just did a capital restructure and extended runway to 2029. I’m looking at $7.45, $13-15 (there are other targets in between but I’ll skip to) $50.

Exclat

It's the entire timing the market or DCA rhetoric. Everything is at ATHs, so you would have been sitting on cash for the past 5 years? The issue with boring ETFs is that boring ETFs have too much exposure to consumption based industries. Current economy sucks, purchasing power of your average consumer has fallen significantly (top 10% now accounts for 50% of total domestic consumption in the US), and unemployment is creeping higher QOQ. This is a trend that's not going away anytime soon. Why anyone would even want to be exposed to consumer driven industries that relies on middle class spending is beyond me. I'd rather have a FCF monster sitting on a large pile of cash reserves that is not heavily reliant on consumer spending to tide me through such times. GOOGL is that play, it's the BRKB of tech and a company that will survive even if the working class becomes paupers.

EfficientAd7124

There’s zero data to support your claims. You’re going to have to prove my statements wrong when you accuse me of dishonesty. Your hyperbolic language literally means nothing to me. If there’s data to indicate that grab somehow treats its workers the “worst” please provide it. Bearish data? Give it to me. All you’re really doing is whining lol As for ride share being pricey, I’ve addressed that multiple times in the comments here; Grab will soon be able to lower its prices for rides over the next few quarters as its portfolio of services gain profitability and FCF increases. That’s the reason grab IS a super-app. The opportunity hasn’t passed it just literally is an incredible platform. It can afford to lower prices once its other features gain more revenue, because it has a wide range of services set in a cohesive environment. That places it ABOVE other applications because it will have way more revenue streams than a one-dimensional ride share company that can temporarily out-price $GRAB. So it is, literally, a super app. Far beyond other services in scope

EfficientAd7124

There’s zero data to support your claims. You’re going to have to prove my statements wrong when you accuse me of dishonesty. Your hyperbolic language literally means nothing to me. If there’s data to indicate that grab somehow treats its workers the “worst” please provide it. Bearish data? Give it to me. All you’re really doing is whining lol As for ride share being pricey, I’ve addressed that multiple times in the comments here; Grab will soon be able to lower its prices for rides over the next few quarters as its portfolio of services gain profitability and FCF increases. That’s the reason grab IS a super-app. The opportunity hasn’t passed it just literally is an incredible platform. It can afford to lower prices once its other features gain more revenue, because it has a wide range of services set in a cohesive environment. That places it ABOVE other applications because it will have way more revenue streams than a one-dimensional ride share company that can temporarily out-price $GRAB. So it is, literally, a super app. Far beyond this ther services in scope

EfficientAd7124

Fair enough. 1.) Grab’s pricing for rides in Thailand is indeed higher than some alternatives, but that premium is just because grab has a larger and more mature, vertically integrated ecosystem rather than inefficiency. The rest of grabs services are springing into profitability this year and next year. That will lower prices a lot. As scale increases and operational efficiencies continue improving, the cost per ride and delivery will naturally decline. This has already begun across other markets, where incentive spending as a percentage of GMV has fallen steadily yoy, that means they have healthier unit economics and better pricing capabilities. Once their prices the programs become profitable (most have great FCF this year, lending is the only one lagging behind, since it’s new), rideshare and taxi services can actually be made significantly cheaper. 2.) What differentiates Grab from other ride-hailing apps is its integrated model. Users are not simply paying for a car ride, theyre engaging with a financial, logistics, and payments platform that connects transport, food, lending, and insurance into one ecosystem. It’s cohesive, and consumers love cohesive, multifunctional applications. While in theory consumers could use multiple apps for different needs, in practice convenience, trust, and data integration create a lot of convenience for users. Drivers and consumers both benefit from a unified rewards system, consistent payment method, and safety features that competitors will be able to match less and less as Grabs efficiency improves. 3.) Thailand’s smaller competitors like Bolt and Lineman succeed on price but lack the infrastructure to scale across financial services or expand regionally. They are single-vertical businesses in a market that is trending toward digital convergence. As economic conditions improve, the value shifts away from low-cost transactional services toward integrated, service-rich ecosystems, and Grab already occupies that space. Basically they are one-dimensional, which makes them better at that one thing, until grab improves their portfolio of services and crushes their competitors with lower prices. The CEO is confident that GRAB can increase margins and grow profitability in all their services. Once they have multiple heavy sources of FCF they can seriously lower prices. 3.) The company’s long-term advantage lies in its position as Southeast Asia’s de facto digital gateway. Millions of underbanked users in Thailand, Indonesia, and the Philippines now enter digital finance through GrabPay and its lending services. FYI, its lending services also are lowering its FCF, so that appears as a slowdown in growth but it’s not. As household incomes rise and mobile access expands, these users basically become higher-value participants within Grab’s ecosystem. Each new layer of financial inclusion, from ride-hailing to payments, to credit and insurance, increases value for the customer and increases value for Grab. 4.) let’s say that Grabs alternative services somehow stop growing entirely this quarter. That means there’s no extra cash coming in for grab to lower its prices for rises. Then, even if competitors might continue to capture segments of market share, the revenue contribution per percentage point of market share is growing. As Grab monetizes more services per user and gains operational efficiency, profitability rises faster than sheer volume. Over time, that means the company’s earnings potential expands even in a fragmented market, making its position stronger, not weaker, in the face of competition. Put simply, I’m bullish on South east Asia. If GRAB loses market share but the overall pie is larger, then grab is still priced cheaply relative to what it could be in 5 years. Thanks for your question and please let me know if you have any more questions or concerns, I’m not trying to lose money here so I welcome all negative sentiment wholeheartedly.

SloppyGuiseppe99

NEM has amazing ER beat estimates for EPS by 20% Record FCF Debt gone Why is it down ? Genuinely confused Can someone explain it to me like I’m 10 years old?

After-Question3165

Waiting for production guidance and FCF

thalassamikra

NEM - insane FCF, good guidance, even the AISC is slightly down. Could not have been better. But of course the demented algos trading miners AH are trying to sell it off

Much_Candle_942

check Nokia PS ratio, FCF ratio, prospects all good 

Jerikolol

its possibly +44% FCF qow and prolly yet another 100% for q4 in 3 months. Q2 was with gold at 3200. Q3 was with 3450s. Q4 will be with 4100+

ChuckOfTheIrish

There will always be people like that, heck people not thinking about the financials is how these bubbles are created in the first place. With a career in corporate finance, you'd be shocked how few people care about financials until they get laid off because they ignored the warnings and recommendations finance and operations teams provide. I do get the baseline of an irrational valuation which is why any investments are even considered a potential bubble, but yeah this one has a foundation where dot com was 99% on potential, so could still be considered a bubble but the comparisons are not based in logic. Pets.com as the prime example never once showed profit and had 25M revenue less 110M in for a net loss of 85M in their most successful year, but had hundreds of millions in valuation due to irrational buyers when it should have been worth pennies. Inversely, NVDA has TTM revenue of 165 billion, extremely healthy profit margins, and over 60 billion in FCF, commitments from the other biggest organizations in the world to spend hundreds of billions in CapEx on NVDA, and such a good product that POTUS creates barriers to keep their product out of China for fear of military and world power implications. Competition will lower their market share without question, but as AI spending increases and companies figure out how to properly use it, NVDA and their competitors will all see a cut of an ever-increasing pie.

Important-Ninja3544

True. I am an advocate of tracking data-driven signals so I like such metrics as forward P/E and PEG (for major AI stocks), Capex/FCF, Net Debt/EBITDA and YoY debt growth (for AI hyperscalers - MSFT, AMZN, GOOGL, META) and trailing-90-day tech IPO count and their average first day return. And so far, I see that YoY debt growth increased significantly (around +33%) which means debt is increasingly financing this bubble. Here's a separate thread on the current AI bubble: r/bubbleWatch

ptwonline

Oracle is upping the ante for the other big AI plyers. The others were just using a portion of their FCF or else cashing in on some of their lofty equity prices to power their AI investments. Oracle is actually borrowing a lot and accelerating things so we may see the others decide they also need to accelerate.

Dinkmers

They had like no FCF last quarter so maybe it's just averaging out

OnSiteOnTheMike

You do realize it has a crazy high pe ratio, low FCF yield and strong competition to its core business. The stock didn't only fall because of the Brazilian tax

loliveerr

Sorry to necro the post - one thing to add here that I don't see anybody mention: DLO paid a special 0.50$ dividend this year and they plan to pay out a regular dividend equal to 30% of FCF. The CEO essentially said they don't need much cash to grow and they decided to pay out profits to shareholders on the regular starting next year. This is still relatively unknown - the stock won't \* yet \* pop up in screeners for people who are investing for dividends. Not that many companies out there that regularly grow the dividend and manage to grow themselves as well. This one might become a dividend aristocrat or whatever the dividend chasers call these companies. Now knowing the company committed to pay out 30% of FCF as dividends, re-read this part of OP's TL;DR: \> DLO crushed Q2 (53% TPV growth, 50% rev growth, 156% FCF gain) This will attract exactly the type of investors who will be happy to receive the dividends and let this thing compound. It might even end up as core holding of some dividend/payout focused funds. And I think many of those people will reinvest their dividends, completing the wheel. DISLCLAIMER: That said, I have mostly leaps. Will move to 100% shares later.

AlfredoAllenPoe

When investors remember that Apple's revenue and profits are stagnant Apple's revenue has grown at just 3.17% over the past 2 years. Apple's net income has grown at just 2.36% over the past 2 years. Adjust for inflation, real sales and real profit are down. Apple's free cash flow has declined by 2.41% over the past 2 years while FCF/share has only increased by 0.18%. Investors are going to Apple because they see it as safe, but the company's share price becomes less and less safe as more and more people buy into it without a corresponding increase in profit.

Stonkgang_

Turning FCF positive, 2nd largest burger chain in the world. A retail favourite name but none of them are long. In my opinion we see activist investor news soon, management shake up or retail Frenzy. Literally every day all anybody talks about on here is Wendy’s yet nobody is backing it, I’m betting they will.

cbusoh66

Don't understand the fascination with NBIS, you want to own a neocloud, don't own a European company that has to pay high taxes and get suffocated with various regulations and laws. Microsoft contract is great and dandy, but it won't translate into the FCF everyone thinks it will. And, like CRWV, they need to continue to raise capital and issue debt or sell shares just to stay above water.

Time-Philosophy0323

For a senior finance manager, from another finance manager, this post was extremely lackluster and uninsightful DD. Where are the multiples now, vs peers and vs historical. Where are the FCF and ROE mentions, where are the reasons for why the price isn’t fully baked in already…

Existing-Ad-9485

My eyes are on Netflix ($NFLX) this quarter. The consensus is strong, driven by those huge engagement numbers from shows like *Squid Game*, but the real thesis is the financial shift. UBS is forecasting 30% operating income growth next year, showing the price increases and ad tiers are significantly boosting margins. If they hit anywhere near that $9.2 billion FCF this year, we’ll know the transition from growth story to profit engine is complete.

thalassamikra

NEM has earnings this Thursday. Fingers crossed for current gold prices getting reflected in their FCF!

SAC-MichaelScarn

Gold mining stocks. Gold doubled and so did the mining stocks. But the mining stock FCF is up 11x…. Long NEM, and especially EQX and BTG. These last two are severely undervalued .NFA. Good luck

ninjamammal

Are company buybacks a frequent or common thing among big tech firms? Or even maintaining dividends, wouldn't the companies risk both for a potential increase in future profits? I agree with ROI being next to zero on the AI project, that's why there is a huge push for B2B and government applications rather than focusing on consumer models. This will definitely see an increase in the short-term cash flow for the big techs. What do you mean multiples are tied to FCF? Just learning

Common_Arm_9348

Sure so essentially it's this. People say FCF is strong for tech. If you factor in buy backs and dividends, FCF is reduced. We are seeing Capx spending increase right now, but a lot of companies aren't showing results yet.  My concern is that we are overestimating the real amount of FCF with these companies. If they need to pick between increasing Capx on AI, dividends, and buybacks, Capx will be reduced first.  Right now I don't see the spending slowing down. However I. Q3 of 2026? Idk. So the point here is to keep your eye on the real FCF of these tech companies because the multiples are tied to FCF.  Again, I am not saying the issue is AI spending will go down, but the rate of the increase of spending YOY may slow down if FCF doesn't improve from these AI investments. 

Crunch101010

I’ve bought up some BTI recently. Lot of growth in smokeless/pouch, 10%+ FCF yield, around 10-11x forward earnings, and a nice dividend if you can get it in a retirement sheltered account. Not a lot of solid blue chip quality USA stocks trading like that right now.

madrox1

The stock dropped bc the 2 new co-CEOs had a mtg on Thu with analysts to explain their financing strategy for future expensive AI datacenter buildouts. They were supposed to have a plan for it until at least 2030. They were supposed to present concrete facts about their plan but instead they were very general and talked up instead the potential of AI and didnt touch much on financing. To build one of these AI datacenters is huge capex involved and Oracle will have more debt than FCF after the numbers are crunched. This is why the stock dropped. Not just because the stock was taking a break from the big run up. The buildout is also so exp bc Nvidia charges so much for their high tech chips. That is also another reason why NVDA is so involved in the vendor financing of the deals and the circular nature of AI investments among a few big players. Jensen and Oracle can spin out how the plans are feasible but they are biased due to their own self-interest. Wall St is coming around to how the big AI plans will have financing issues also just bc the numbers are so large. Oracle cant issue debt or corporate bonds forever to raise money..

FarrisAT

P to FCF - SBC is a stupid metric Completely uncorrelated with returns.