FCF

Sufficient_Habit5091

AMZN just burned through -$58B over the last 9 months. GOOGL with negative FCF will get worse, same with META. SPCX will continue lighting money on fire too. These crypto mining companies recently turned neoclouds have no idea what they are doing, they have absolutely no future.

Sufficient_Habit5091

AMZN just burned through -$58B over the last 9 months. GOOGL with negative FCF will get worse, same with META. SPCX will continue lighting money on fire too.

_SirShackleton_

Yikes, do not get me wrong, but people like you should not invest at the stockmarket. You still do not understand, that this get rich quick mentality will not work for you. Investing needs one thing more than ever, which is patience. Expect market level returns of maybe 7 p.p.a. inflationadjusted and potential downperiods of maybe a decade. Also if you decide against index investing, maybe learn to analyze financial statements? It baffles me how somebody can invest their livesavings without actually knowing their FCF-Yield, ROIC and so on. Yeah have a look at your holdings and see their actual cash generating ability, you will be surprised (negatively). Honestly, take the losses, delete the App and go read some books. Start with the OGs like Graham and Lynch and than some Bogle when you realize you are not made for single stock investing because you do not understand most companies at all. Best of luck.

Vind2

Agreed some of that late 2020s revenue wont materialize. A forward P/E ratio generally looks at the next 12 months, these short term earnings are unaffected. If anything, a shortage of new datacenters makes the hyperscaler’s existing compute more valuable. Also - their capex spending will slow if they cant spend on datacenters, boosting FCF and thus buybacks. GOOGL, META and AMZN’s fwd PEs are actually quite cheap currently relative to history.

Specialist_Repair646

Bullish on hyperscalers. As per JPM, it is likely that the 24 data center partial bans that passed yesterday will likely slow down the build and push FCF to positive territory in 2027.

JHgrandgerard

Before the election stuff I'd look at the balance sheet. Debt is 3.6x equity and FCF almost halved last year, to $1.3B. A brutal day doesn't change either of those numbers.

JHgrandgerard

Thanks, appreciate it. Debt and sales growth pass on both, Nokia's sales just barely. Real cash is the flag on both: Micron's FCF swung from about -$6B to $59B in three years, and Nokia's FCF has been shrinking. On price, Nokia looks expensive to me and Micron looks cheap. That kind of drain usually comes from one name being too big a slice of the account.

Jericho3434

They can’t until after 2 years if you took any CHIPS act money. MU should be able to buy back stock in December when their two years hit. Expect a rally on announcement since they can plow all their FCF and available funds in buybacks.

Tallwhitedude123

APP hasn’t been bloated for a while. 55% revenue growth YoY. 65% of revenue converted to FCF. Forward PE of 16 after the AH price jump. PEG of .40 after the AH price jump. The market wrongly priced this company based on two things: first was the SEC overhang which went away in Q2. Second was APPs slight revenue miss in Q2. That’s why this stock got absolutely destroyed

123tl

Why would they be forced to buy out INTC supply? Intel does not have a better growth story. Their CFO revealed they are not expected to have positive FCF till end of 2027, maybe even 2028. AMD on the other hand is projecting crazy growth.

Fun-Ad4758

I'd like to understand what gets the FCF-minus-SBC margin to 20% in the base case. Keeping your growth, share count and multiple, but using the 13% margin from your bear case, gets me to around $80 rather than $122. Do delivery and advertising get you most of the way there, or does it also rely on your robotaxi assumptions? No position.

CFDsForFun

It’s already been good news for Big Tech. People want positive FCF, it’s no big secret

shameless_chicken

Tbh if the three hyperscalers see equivalent pushback then I don’t see it as an issue for them. They’re racing so that customers can’t go to one of the other three but if no one has capacity then it’s not a big issue. Efficiency probably becomes even more important then. But yea the other benefit is FCF

username-not--taken

maybe in anticipation of lower capex, the hyperscalers had been punished for their high capex and negative FCF

JuicyJohnny69

Why is memory still visiting 6 month lows? Negative FCF hyperscalers spending their money on memory are ripping

BladeFireQ

So we are up due to Hypers going back to +FCF

_hiddenscout

Makes sense. Construction names on the AI trade are getting crushed. Less spending means more FCF which makes investors happy.

sck178

Probably their negative FCF

JHgrandgerard

Good quarter for sure. Daily users kept growing and the stock still lost \~75% from its 2025 high going into this report, brutal to hold. Personally I count SBC as a real cost, and it was 37% of FCF last year.

ga643953

Did we overbuild in the dot com bubble? Yes. Would you say because we overbuilt, so internet has no value and doesn't create jobs? Probably not, because e-commerce, streaming, YouTube and all these businesses emerged from the infrastructure buildout. Worrying that they won't make money at some point is basically saying you think you are smarter than all the hyperscalers CEOs that are all banking on the same thing. They have generated hundreds of billions of FCF over the decade. They can be wrong, but I wouldn't be so arrogant as to presume I'm so smart I can see something none of them are seeing, especially when I don't work in the industry.

rams2027

Free cash flow projected to be around $2 billion by 2028. Company not even worth $20 billion. Find a tech company with a 10% FCF.

SpongEWorTHiebOb

Ugly FCF margin of only 4% on inventory and AR. Wouldn’t be surprised to see if the AH pop becomes a loss tomorrow.

MoreOutcome8541

What good earnings you dumb fuck? FCF negative all the hyperscalers, chip profits are just debt that is coming fucking due open your eyes dumbass

khahk

Didnt google have negative FCF, it burning more than its printing

fredditf

$AMD Q3’26 EARNINGS HIGHLIGHTS - Revenue: $13.40B (Est. $13.09B); +45% YoY - Adj. EPS: $2.09 (Est. $1.95); +74% YoY Q4 Guide: - Revenue: \~$17B +/- 3% (Est. $16.23B) - Non-GAAP Gross Margin: \~55% Segment Net Revenue: - Data Center: $8.55B; +97% YoY (Est. $8.27B) - Client and Gaming: $3.70B; -8% YoY - Client: $2.95B; +7% YoY (Est. $3.03B) - Gaming: $773M; -40% YoY (Est. $634M) - Embedded: $1.11B; +29% YoY (Est. $1.07B) Announcements: - Helios: Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running models on first AMD Helios rackscale solutions powered by MI450 GPUs and 6th Gen EPYC CPUs. - HPE: Vultr will deploy first AMD Helios by HPE systems in a $12B deal. - Versal AI Core XQRVC1902: Space-grade SoC designed for missions lasting up to 15 years. Other Q3 Metrics: - Non-GAAP Gross Margin: 56%; +200 bps YoY - Non-GAAP Operating Income: $3.92B (Est. $3.67B); +75% YoY - Adj. EBITDA: $4.16B (Est. $4.02B); +71% YoY - FCF: $554M (Est. $1.05B); -64% YoY Comments: > “Demand for our Instinct and EPYC products continued to strengthen, and we expect growth to accelerate further in the fourth quarter as we scale Helios and ‘Venice’ production.” > “Our fourth-quarter outlook reflects accelerating revenue and earnings growth, driven by strong demand across our Data Center portfolio.”

PenguinOfB00m

I did not run the math, but I get a vibegutfeel that hyperscalers will stop spending after the negative reaction to high capex and negative FCF. TL;DR: vibe-o-meter says SOXX is cooked. No I don't buy puts, I'm not short, and I'll eat the fries myself thank you.

iiiiiiiiiAteEyes

ARPU of peers like Meta seems to be possible imo. iirc these are rough figures: META ARPU $60 Reddits APRU $14 So even if reddit had no user growth and could some how get to half of Metas ARPU they are earning 2 times the money they are now. Or roughly $8 BILLION a year I doubt reddit has a mass exidus of users and I believe they will slowly grow over the years so assuming they keep increasing their ARPU, Dont lose users, and keep stacking cash (1B FCF for 2026) they should be just fine. Who cares about data licensing right?

PatientThesisX

The rent argument only works while the tenants can pay rent. Nvidia's revenue is basically a few hyperscalers' capex budgets. Alphabet last quarter: capex $51.4B, up 114% YoY, vs $42.3B of operating cash flow. FCF -$9.1B, second negative quarter in a row. That's why the market sells the picks and shovels anyway. Capex can't outrun cash flow forever without more debt.

UncouthMarvin

"We made record profits, but our FCF are negative" -Short like it's bankrupt.

JHgrandgerard

Daily is way too much, I only check in at earnings, 4 times a year. For the shaky ones, try writing one line on why you own it, with a number in it (FCF, debt, sales growth). If you can't, that's probably one of the FOMO buys. And I never trim during a selloff, a scared brain makes bad cuts

JHgrandgerard

Good news for the foundry side. Mass production isn't until 2030 though, and until then it's just capex. Samsung's FCF is already shrinking. Debt is tiny at \~4% of equity, they can afford it. It's the wait I'd find hard. Holding through memory price swings till then takes patience.

zg44

All these debt analysts are telling the hyperscalers to sell more stock/equity instead of debt because there's too much debt to absorb from the AI boom. Hard to see how we get upward moves in AI stocks (outside of self-funded ones like MSFT that are still FCF positive) until that changes. ORCL, GOOG, AMZN, etc. need to sell more stock.

SavingsSeveral933

A 156 P/E with a "favorable" stamp on it is a funny contrast, the label and the number don't really agree. FCF yield sitting mid-range while P/B and P/E are both near the top of their history means you're paying a premium on earnings and book, so the multiple has to keep expanding or the growth has to catch up fast. Fair value is a moving target with names like this, the multiple does most of the work and it swings hard. If you want in, scale in small and leave room for a real pullback instead of trying to nail one entry price.

serodi03

P/E for hyperscalers makes little sense due to investment distortions. A better metric is EV/FCF, on which they score much poorer. I am invested in hyperscalers (as well?), but using P/E is quite pointless (if not misleading) right now

Glittering_Water3645

Interest payments, deprication and amortization will be a massive drag on earnings going forward. Add high dilution on top of that. I believe it will take longer than expected to reach true FCF and good FCF/share growth.

filingdelta

Fair point, and the numbers move a lot. Stock comp over the last four quarters was about $386m, so FCF minus SBC is about $810m instead of $1.2bn. At a $17.7bn market cap that's roughly 22x, not 15x. And it's rising: Q3 SBC was $131m vs $84m a year ago. On dilution, fully diluted shares were 206.3m at the end of Q3 vs 206.2m two years earlier, so basically flat. But that's because Reddit is buying shares back: $340m in the first nine months, slightly more than the $301m of stock comp over the same period. So the dilution is being paid for in cash.

Superb-Grade-7331

I wouldn't treat negative free cash flow as automatically good or bad. The key question is what the company gets in return for that spending. I'd look at four things: 1. How much of the capex is growth investment versus maintenance? 2. Is there evidence of customer demand and future utilization? 3. How is the investment funded – internal cash, debt, leases or dilution? 4. Is incremental return on invested capital likely to exceed the cost of capital? A temporary FCF decline can be rational if the returns justify it. But spending more doesn't automatically create shareholder value. FCF per share over several years is worth watching, too.

ga643953

It's expensive, but I would argue it's not overvalued with their operating margin and FCF margin. Those margins keep going up in the next few years, they have have even more cash on hand for buybacks. Andthis will become a value stock if the price simply stays here even when the growth slows eventually.

vandalizethethief

I thought this thread was about the amended S-1 released today that included the 3rd Q & was very confused. "Anthropic reported an operating loss of $536 million in the September quarter, compared with operating income of $974 million in the June quarter." - Yahoo Finance That is a wild swing quarter to quarter. Is AI just Intuit and H&R Block claiming they make the same amount year round? For me it looks like a scam but everyones going to buy so is it worth it to buy the IPO? I jumped through hoops to get in the SPCX IPO and barely got out. I had indigestion for a month until I could get off of Cathie Woods wild ride. If you have a private company fund don't hold a public company in it you old bag. You should have ditched SPCX BECAUSE IT WENT FUCKING PUBLIC. Fucking hell, I hate that woman. Why the hell would anyone "invest" in a business like this at this valuation. Just wait, I guarantee it isn't going anywhere but up and down real fast. Hell, at this rate we are going to see Reddit back at its IPO price in no time. Thats sucks for me but thats why I don't bother with IPOs unless it's a day trade. I would say momentum but momentum is currently to the downside and has been for a month now in tech. I don't get it. Is all the money coming out of semis actually going to fund this insane valuation. Fuck that Im sticking with my high yield "Bad Bunny" munis for now. Nothing like owning high risk Puerto Rican infrastructure. At least I know I bought them at 10% real annualized gains (meaning no taxes). No way, the bottom def isn't in if this is the shit they are trying to pull and pretend they are FCF positive.

filingdelta

I get a lower multiple from the releases. Free cash flow over the last four quarters was about $1.2bn ($264m, $311m, $261m, $363m). At $91.73 with about 193m shares, that's your $17.7bn market cap, so roughly 15x, or about 12x net of the $3.0bn in cash and securities. Reddit's FCF doesn't deduct stock comp, so if you subtract that you'd land higher. At the old $129.60 the same math gives about 21x. My read on the old price: Reddit had beaten the top of its range every quarter, so the market was paying for roughly 50% growth with a growing US audience. The Q4 guide midpoint is about +40%, and the US audience shrank. Agree on revenue per user: US was $13.82 vs $9.04 a year ago.

adotg

That doesn’t change the fact the companies are winning. They’re printing record FCF

CUbuffGuy

Pls sell Apple to zero. Rotation to Amazon and MSFT as the “safe” plays because of FCF. Narrative preview for next week.

ChampionshipUsed308

I wonder if hyper scalers actually really because they won't be able to build so fast and they end up goinu back FCF positive

Happy-Champion1661

price is too low its 21pe (without SPCX/Anthropic gains). It's one of the best companies in the world, negative FCF is genuinely fucked up but it's an overreaction imo. It's also negative ytd and flat on 1y. Berkshire bought it last year, it feels like the safe bet when I think of tech.

cbusoh66

AAPL is the last hope for the market since they have literally no AI CapEx and no negative FCF like the rest of those idiots. If that dam breaks, god help us all

CUbuffGuy

It will, market is rewarding companies showing FCF associated with AI. it's few and far between but look at AMZN. Took back all ER loss and then some, will go up more. People want AI exposure, they just want it in profitable companies.

InternationalKiwi401

long NOW so biased. it wasnt really the quarter, cRPO still grew 21% and the FCF margin guide went up. what got punished was the Q4 cRPO guide coming in around 18.5%, at the multiple NOW carried any guide trim reads like the AI workflow story slowing, so the stock does in a day what it would normally do in a quarter. the question now is whether high teens cRPO growth is the new normal or a one quarter air pocket

ElorGale

I wonder how much of that 36% FCF margin comes from cutting capex. Less infrastructure spending helps cash flow for now, but operating costs are still rising.

caliwillbemine

And just like that. FCF doesn’t matter. AI capex is again proportional to gainz

Wonderful-Sail-1126

Read their S1 mate. They're clearly profitable and have FCF.

SkillNo1358

AAPL will fly since they have FCF lmao

Tim_Apple_938

Search grew 12% It’s the FCF

Own-Recipe5908

They were saying they'd be FCF by end of next year. It's like a drunk saying they'd stop drink tomorrow.

Scriptum_

Actually, it is because of the capex and negative FCF. Don't be fooled by narratives.

SectorSignal-AI

A big one-day drop usually says more about expectations than about whether the business is healthy. When a stock has been treated as a favourite, even a miss on the figures investors watch most can reset the price fast. Here the Q4 cRPO guidance cut probably matters because cRPO is contracted revenue still to be recognised, so software investors read it as a clue to future growth, even when current growth of 21% still looks solid. The improved FCF margin is good news, but on the day the market tends to focus on the forward-looking numbers first.

filingdelta

Not specifically. The 10-Q only says the two deals will "accelerate cash outflows in the near term," that about $3.3bn gets paid by end of 2027, and that some terms aren't final yet. Funding is covered only in the general liquidity section: $54.0bn of cash and short-term investments at quarter end, plus credit lines and the shelf. On where it shows up, it should actually hit FCF, not dodge it. Intel says some of these supply deals involve prepayments ($1.2bn so far this year) and lists them under working capital, which runs through operating cash flow. Intel's adjusted FCF starts from operating cash flow, so a prepayment lowers it the same way capex would. Q3 adjusted FCF was $1.6bn. The release gives no FCF guide anyway. The part that's harder to see is the unpaid commitments: other purchase obligations were $9.8bn at quarter end, up from $6.7bn in December, and this is before the two substrate deals were added.

Lootoholic

what's the trailing and forward FCF?

KittyLover-7

Back to not caring about CAPEX and FCF concerns and other things like we did on Friday We might decide to care about it again on Tuesday and keep alternating each day

username-not--taken

I guess the actual numbers are debatable, but yeah, once the buildout is (mostly) done, FCF obviosuly will go back up.

CallMePyro

Almost entire FCF growth , capex is not expected to drop at all

Kredit-Carma

I mean. This is literally the only reason people own big tech. We don't expect infinite negative FCF

Separate_Baker7280

Hand in Hand. They tend to generate FCF!

InternationalKiwi401

the demand side of the capex story keeps getting confirmed and the cash side keeps getting worse, thats basically the whole trade now. amazon guiding AWS growth 40%+ for two years while going FCF negative is not a demand problem. the question is just what multiple you pay for spending like that

L1ME626

all priced in, amd valuation is laughable, memory margins peak, hyperscalers are pouring all FCF, seriously LOL,

QualityDip

Since Amazon has reported now, the update for the post: trailing 12 months through Sep 30, operating cash flow was about 168.3B and purchases of property and equipment about 215B, so roughly -47B on a plain OCF minus capex basis. Amazon's own FCF definition nets out equipment sale proceeds and incentives, so their headline number comes in a few billion less negative, but either way it went from about -7.6B TTM at Q2 to around -45B in one quarter. To the point above about mismatched windows: on a TTM basis Microsoft is still clearly positive (about 196B of operating cash vs 136B of capex over the last four quarters, ~60B FCF). The useful question to me isn't negative vs positive, it's whether operating cash grows faster than capex in 2027. If it does, this was a funding gap. If capex keeps rising faster, it's a returns question, and that is where valuations get repriced. Not advice.

pm_me_yo_creditscore

Dilution is literally the company slicing your share of the pie into smaller pieces and saying “trust me, we’ll bake a bigger pie later." The actual context here is META creating a new share class to raise up to $700B while keeping Zuck in control, Amazon openly planning years of negative FCF in a high‑rate environment and Google raising $80B plus debt while renting compute because they’re out of capacity. This has nothing to do with we’re so profitable we just HAVE to dilute. Dilution is good if the returns actually materialize. Saying “IRR is positive” before the investment pays off is just corporate hopium dressed up as math.

Space_Cadet_Pull_Out

Hating on Google's business right now is wild to me. Q3 vs last year: every segment grew revenue, and every major one beat inflation. Search was up 12%, YouTube ads up 9%, subscriptions up 11%. The only soft spot was Network, up 1%, and that's about 6% of revenue. Total operating income rose 30%, faster than revenue, so they got more efficient too. And Cloud doubled revenue year over year and tripled its operating income, with margins going from 24% to 36%. For comparison, AWS grew 39%. Cloud is the infrastructure every business is going to run on, and Google's is growing faster than anyone's. Yes, free cash flow was negative this quarter, at -$9B. That's because capex more than doubled to build AI capacity for a Cloud business that just tripled its profit. Over the trailing twelve months, FCF is still +$19.7B. The EPS miss was mostly a SpaceX markdown, not the core business. The balance sheet can carry it. As of September 30, the current ratio is 2.8, with $375B in current assets against $135B due within a year. They hold $265B in cash and marketable securities against $125B of long-term debt. Compare that to Amazon, which is at roughly 1.0 and borrowing to fund its buildout. Management stopped buybacks and sold about $12.4B of stock in Q3 at an average of around $344. GOOG at $280 is 100% a buy, and I'm putting every spare dollar I can into it. It was $280 a year ago and now it's back to $280 with 25% more revenue.

Sufficient_Habit5091

I love retards like OP act like oil has anything to do with the fact that AMZN has **-58B FCF for the past 9 months**.

hup_hup

In my opinion these kind of defeats the point of the analysis. You would want to use a realistic perpetual growth rate so that you can model the required FCF and revenue growth required in order to be in that $89-$118 target. Just my opinion on how I use DCF models to try and understand the assumptions behind a valuation.

Argothaught

Yeah, fair question. I think the timeline is contextual. Management first needs to test the strategy in international markets, like they said, then likely implement a phased rollout. I don't expect them to abandon the broader direction, but I do expect adjustments to how they execute it based on the data they gather. In a sense, as they say, they're building the plane while flying it. They're attempting to change how users discover, access, and engage with the platform while simultaneously maintaining growth and monetization. And that introduces considerable execution risk. There's a possibility that the erosion of the existing audience and advertising opportunity could outpace the value created by the new strategy. (In other words, the business could deteriorate faster than management can successfully implement the changes.) From there, they'll need time to evaluate the results, make informed adjustments, and take calculated risks as they refine the experience. Eventually, we should start to see through the noise of the transition and get a clearer picture of whether the strategy is working. That might mean looking beyond headline DAU and paying attention to metrics such as logged-in DAU, ARPU, advertising revenue, FCF, and the return rates of newly acquired app users. Possibly, would like to see more granular information about app conversions, longer-term retention, and engagement, although I don't believe Reddit consistently discloses all of those metrics. We'd have to work with the information management provides and distinguish between what we can measure directly and what we're inferring. Now, all that said, I wouldn't put an exact deadline on it, but I'd want to see meaningful early indicators over the next three quarters, with roughly a year providing a much more telling assessment. So, Q3 2027 is the point at which I'd hope to have a clearer picture of whether management is delivering on its strategy. While patience is warranted, it shouldn't be unconditional. The results still need to justify the transition.

ChairmanMeow1986

This is often repeated but it's heavily skewed towards small caps, longer time frames. The 5-8 billion market cap area is more of a coin flip. Something like 17 billion market cap rddt with minimal debt and FCF basically completely invalidates your mis-used statistic. At $17 billion with net cash and positive FCF, a company will almost never go to zero or flatline permanently out of financial weakness. They have too much capital and too deep a user base. I don't know remember the details or the current one's, but I a couple years ago I remember being surprised that pinterest was the 16th biggest social media site. Also, ran into a good Graham quote today, paraphrasing, 'invest in companies that can be run by an idiot, because eventually they will be.'

danfay222

They were buying back enormous amounts of stock because 1) they were still enormously FCF positive and 2) the market wildly overreacted to their (admittedly ill advised) investments in VR. The stock traded down to as low a p/e of 10 even as income was taking a hit from massive VR investment, with almost every other growth metric looking fine to strong. Why wouldn’t you buyback your own stock in this window?

tdogger88

There’s a ton, but Google and Amazon are the safest. I would go all in on those. Even if we did get a CapEx pullback (to show FCF positive), that will only help Google and Amazon. I don’t recall ever seeing either of them so cheap in my lifetime with so much growth ahead.

pm_me_yo_creditscore

* Capex booms mark cycle peaks, not bottoms. * META’s potential $700B raise = dilution + cash flow strain. * Amazon planning years of negative FCF is bearish in a high‑rate environment. * Google renting compute = capacity bottleneck, not strength. * Long‑term “scarcity until 2030” = fragility. * Macro pressure (rates, oil, geopolitics) is structural, not temporary. * AI demand is real, but AI profits are not. * Retail sentiment is still euphoric, not capitulating. * The bull case requires multiple external improvements (rates, oil, geopolitics). * Liquidity is tightening, earnings weakening and risk rising.

beerion

I'm curious if anyone has actually done a full out analysis on GEV. Their current price to operating income is like 160x. FCF yield looks better on paper, but was lifted by advanced deposits. Unless that trend continues, this is just a pull forward effect, and future FCF will look horrible - if I accept $10M in 2026 and then spend $8M on COGS in 2027, the result is an $8M deficit in 2027 (again, unless I take in another advanced payment surplus in 2027 - a trend that literally can't last forever). I figure thier normalized FCF yield is closer to 1%, and this isn't really a business that scales quickly, and they run the risk of over capacity if they do. But again, I haven't dug in too much yet.

pm_me_yo_creditscore

Capacity bottlenecks show demand is high sure but they also show supply constraints, margin pressure and forced capex. Google renting compute because they can’t meet demand is literally described as a strain, not a strength. Bottlenecks mean you must spend more just to keep up, which drags ROI until the bottleneck clears. Macro isn’t guaranteed to be temporary in market terms. OP explicitly says we’re in a “max pressure environment”. Elections don’t magically fix structural inflation, supply shocks or global conflict. Markets can stay stressed long after political cycles change and the oil infrasructure is not gonna magically grow back. AI profits are only for the hardware side. Chipmakers are printing money. SK Hynix literally says scarcity until 2030 and Meta/Microsoft confirm insane CPU demand. But Google and Amazon are going FCF negative because their AI revenue doesn’t yet cover their capex. Chipmakers get paid immediately, cloud platforms get paid eventually.

pm_me_yo_creditscore

* Capex booms mark cycle peaks, not bottoms. * META’s potential $700B raise = dilution + cash flow strain. * Amazon planning years of negative FCF is bearish in a high‑rate environment. * Google renting compute = capacity bottleneck, not strength. * Long‑term “scarcity until 2030” = fragility. * Macro pressure (rates, oil, geopolitics) is structural, not temporary. * AI demand is real, but AI profits are not. * Retail sentiment is still euphoric, not capitulating. * The bull case requires multiple external improvements (rates, oil, geopolitics). * Liquidity is tightening, earnings weakening and risk rising.

UnsaltedCashew36

In Gemini create a "Gem", in Grok create a "Project", call it investing or whatever you like. Then enter these instructions, you can modify them however you want, these are the metrics I wanted to focus on, I keep evolving it over time. Just click on the Gem once its made and enter a company name. Then keep that thread / chat for that company. You can tell it your DCA, position holding and any questions you want: Act as an investment banker. I will ask you about companies, tell me their growth prospects, headwinds, dividend payout ratio sustainability, whether I should invest in them or not and if so, at what stock price? Review fundamental and technical analysis over long term. Be prudent. If the risk is too high, tell me to avoid. Ratio to use to determine if stock is overvalued compared to peers, if available: Price per share/Free Cash Flow per share (P/FCF), Price/Earnings-to-Growth (PEG) Ratio to use to help when comparing companies (optional): Return on Capital (Funds from Operations / (Debt + Equity)) Metric to see if there's selling pressure: Short % of Float or Short % of Shares Outstanding State today's date. Use Yahoo Finance or Google Finance for the stock price. Its ok if you don't know something, double check facts from sources, cross reference earnings reports. Feel free to provide me with important information I may not have asked or considered. For ETFs: Be an investment banker. I will ask you about ETFs, compare their bid-ask spread, MER, volume, returns, yield, holdings, geography of holdings, sharpe ratio and any other metrics to consider. Recommend the best ones and which ones to avoid. Be prudent. Show results in table format when appropriate. Use Yahoo Finance or Google Finance for the stock price

_hiddenscout

Few things to think about. There about 400-800 data centers currently being built. Over the next five years, there is an estimate of around 3,400 projects. This is in the US alone. On top of that, hardware will need to be replaced. The bigger issue to me is the capex spend and how long it can go on. I’m a software engineer and there will always be a demand for more compute. Any time a company comes out with a new feature, that requires new APIs and more compute. The issue is that all this build out is coming from like 4 companies that already are basically seeing their FCF negative. With higher rates it’s harder to raise capital. Also investors want to see ROI from all the spend. Just me personal believe, capex spending will be cut or normalize at some point. We are still pretty early and the technology isn’t going away. Even right now, one of the biggest bottleneck is power for a lot of data centers. It’s still like years to get a transformer to hook to the grid. Those are made by hand by like 3 companies. That’s part of why we’ve seen the growth of GEV and data centers moving to their own power. Gas turbines or solar act as the power if you can’t hook to the grid.

Beret888

I think your completely missing the point. Google has gone from an asset light ridiculous cash generating and distributing machine to an asset heavy cash incinerating company that doesnt return any cash to shareholders and is actively diluting them and taking on debt. This was tolerated because the legacy ad business was going to mostly finance it and shareholders gave them the runway to reduce buy backs and invest capital instead. It is becoming increasingly apparent that the legacy business wont be able to do as much of the heavy lifting as promised, absent a reset in capex to the levels of FCF the company generates the risk has to be priced into the equity. Your presuming these investments will bear fruit and they might but your pricing in an outcome that is not a certainty. I dont think this is the bottom for Google.

jadepig

They were burning cash on the software side for it. Over 20% of their FCF in most years 

Unhappy_Cobbler613

To simplify this, Google has a massive advantage in consumer AI adoption in that most of us already have free accounts that are monetized by Google. Therefore to lose this race they actually have to do a very bad job. They can miss out on being the very best and lose enterprise customers while still dominating on the consumer side of things. Google owns a full consumer tech stack, Apple being a walked garden limits their reach. Throwing FCF towards moonshots and towards DC capex are smart uses of capital. This is the company best positioned for the future, and by far.

MakingMoneyIsMe

>FCF is essentially gone they are spending like crazy to fund AI. Isn't that the majority of tech right now?

ATLfinra

GOOG isn’t the same company fundamentally that it once was, FCF is essentially gone they are spending like crazy to fund AI. Your hot take is wild

ybl84f1

I think you missed all the strategic analysis and forward thinking of those results. Without writing a diatribe some things that are serious concerns for Google in very short form: 1) G is driven by ad revenue, and that is under serious threat as users use LLM more and more for search. G search - their primary revenue source, is under serious threat. 2) Monitization - it is completely unclear how anyone will recoup their FCF from AI. In G’s case one of the biggest use cases - Gemini in search - is free! It’s customer retention instead of revenue…that is NOT ideal. Separate example - Microsoft’s CoPilot for subscriptions is somewhere around a dismal 10% take rate. Google has not demonstrated how they will recover the HUNDREDS OF BILLIONS of $’s they’re spending. 3) enterprises are now clamping down on tokenization costs from an earlier “use AI no matter what” experimentation phase. That has a direct impact on Cloud revenue & growth. You need to think a bit more strategically about those results coupled with what is happening in the market and ecosystem. #1 above is an extreme risk as it could happen in an incredibly short time span - just look at the threat posed and G’s response when the Fed almost made them divest Chrome and Altman was going to buy it…Google would have been reduced to a shell of a company overnight. (If you don’t know the details of this episode I recommend you spend some time studying it - it could have been the beginning of the end of them). There is good reason Google tanked and that the tech market has moved sideways this year. (NVDA is now back to where it was a year ago!)

Woberwob

This right here. Best opportunities come when narrative gets divorced from intrinsic reality/financials. The financials are fantastic. Investors are spooked because of upper funnel traction due to search engine changes and disruption. Revenue growth, ad revenue growth, no debt, healthy FCF, higher user revenue and engagement. Buy the reality, not the narrative.

Mission_Advance1207

They could have sold some of SPCX holding to get to FCF positive, and wouldnt have had such drop

Agitated_Trash203

Sorry to be rude but you’re just dumb if you think Google is going to fade into obsolescence at the precise moment they are growing cloud revenue 103% and at the precise inflection point where they can begin to leverage AI to vastly improve their ads business (which is already top-tier) for the long-term. Wild to me that part of the negative narrative is capex and FCF when it’s ALREADY paying off. Cloud revenue growing 103% and scaling TPU sales. Q3 2025 cloud revenue was only 14% of total revenue, Q3 2026 is now 24%. That’s insane growth. Now imagine even if that slows to a 40% CAGR for the next 3 years, PLUS Gemini, PLUS better search / AI overview monetization, PLUS TPU sales.

musafir6

Its about FCF & threat of AI to the core business of Google on top of high Capex. Intel was overpriced so its more of a correction there.

caliwillbemine

Do you know how to read and see FCF going to zero for big tech as well as listening to Intel’s awful earnings call? 💀

Own-Recipe5908

Think where MAG7 stock prices would be if they just used their FCF for stock buybacks instead of AI lmao.

A_Credo

It's because the ROI on the AI spend isn't showing up. Both companies are FCF negative and dipping into either debt or equity dilution (both bad things that historically crush stocks). Then you see Intel come out and their numbers are meh. So the hyperscalers are buying assets from chips and chips aren't necessarily maintaining that growth. Now you start looking forward. The hyperscalers will soon be pulling back their spending (6-18 months from now). When that happens, their stocks will go up and the chip stocks will get crush even more because the gravy train is finally over. TL;DR. Debt Bad. Dilution Bad. Future guidance/growth (compared to current astronomical levels) very bad.

Hacking_the_Gibson

Why the fuck would they need to go to the public markets if they have $130B of uncommitted cash in the bank? Apple only has $61B worth of cash and equivalents in the bank as of July 2026. Anthropic needs double that, even though apparently they are generating billions of positive FCF?

Nearsite

During the dot come bubble bust, I was just starting my career and only had maybe a couple thousand dollars in stocks (probably more if inflation adjusted). I clearly remember a bunch of dot com companies going under, insta millionaires (this was all over the news) from IPOs of companies that made ZERO revenue and large companies dropping 50%-80%+. The hype was much different. During the GR, I remember huge banks going under and the price of housing dropping like a rock. It was all over the news and like the [dot.com](http://dot.com), it impacted essentially EVERY sector of the stock market. I don't see that happening at this moment. With the exception of Neo clouds, almost all the companies are profitable and generating revenue. They're just not generating enough to Wall Street's liking and the spending is causing a lot of concern as their FCF is going negative for the first time in decades. I definitely cannot tell what will happen, but right now - today, doesn't feel the same. But as they say, history doesn't repeat, it rhymes, so make of that what you will. I would de risk (if you still can) and sit tight in the near term as this plays out.

Icy-Sheepherder-7595

I bought into Google almost 2 years ago before the huge runup and sold because of some bubble fears and panic selling going on at the time (tariffs were just announced and everyone was panicking). The second I was able to get out up 10% or so I did and then watched it moon for the following year. I admit I let sentiment get the best of me, not just reddit but the news wasn't great either at the time so I was convinced it was all going to shit. Then like a week after the recovery the narrative quickly spun to "if you had the conviction to go against the noise last week you're a genius!". It makes no sense to me how people seem to flip flop on this stuff so often. I went big on Microsoft earlier in the year thinking the opportunity has presented itself to me again and I was right to trust my gut again. But at the time all of reddit was screaming what they are now about Google, FCF not high enough, Capex too high, not much growth left at this size, etc... all the same talking points every time when a Mag7 stock slumps. And the commenters are wrong every time.

Consistent_Panda5891

Not fair tho. FCF negative means unprofitable spending

Icy-Sheepherder-7595

Hilarious given that a year ago Google was pumping for being FCF heavy and not long after Microsoft got beat down for spending too much.

InternationalKiwi401

the amazon part of this confuses me a bit, AWS grew 39.3% and operating income beat the top of their own guide by like $1.6B. the ugly part is FCF, TTM is -$42B with all the capex. intel is the real mess in this pair, that PC guide was brutal

Sufficient_Habit5091

The main trigger was AMZN posting 9 months of -$58B negative FCF. Reminding everyone that AI spending is a giant cash burning bonfire.

FartPolluter

AMZN has -$30bln FCF and 2% retail growth. And V'ing. Joke market