FCF

filwu

That $2.4–2.7B Q4 hurdle is a useful check. I’d compare it with the cash-flow statement’s operating cash, working-capital movements and capex against the year-ago quarter. That helps separate repeatable cash conversion from quarter-to-quarter timing, which the headline FCF totals alone don’t show.

groceriesN1trip

I dunnnnno… their bonds are yielding like 15%. Their FCF is fucked

mayorolivia

Tesla and Meta ER bearish for AI. Tesla losing money and cutting capex. No real growth story. My argument is they shouldn’t matter that much anyway to the AI story (SpaceX is more important). Meta now FCF negative due to AI spending and dual class structure will inevitably lead to them diluting shareholders to raise more money for AI spending. 6 months ago this would’ve been fine by market is spooked now by higher rates which they worry will blunt capex cycle earlier than expected.

Proof_Accountant_204

It's a terrible earning, but some gambler just bought its stock for no reason. There is at least 80% chance all of the magnificent seven have negative earning. I don't know who bought the stock after the earning, 90% they are gambling for later earning of amazon and microsoft, but if you had calculate the Nvidia earning and the capital expense guidance, you will know there is 80% all of the magnificent seven will have negative FCF this time except Tsla and Nvidia. It may be the best time to invest Spacex and Tesla. Based on the calculation, the expenses may not stop until 2030, the expenses will not accelerate after Q2-Q3 of 2027. Organizations but stock based on 2 years plan because they have too much money, this means until at least 2028 Q1, there will be no significant investment to raise the cloud company price.

Killerfeed_Reborn

I'd have to do some math, but their div yeild rate to outstanding shares doesn't alarm me with $62.3 billion in adjusted FCF for the full fiscal year 2026. 

Burtonwurton

GOOGL tanked hard on earnings last quarter and everyone was so fixated on GOOGL's negative cash flow. Amazon reported negative FCF on their earnings shortly after and their stock rocketed. Now META for this quarter raised their lower end of capex and is negative FCF and shit is up. We will see how the market reacts tomorrow when volume comes in.

CurrentAirline9065

AI buildout caused the 2 greatest FCF machines ever created to go negative cash flow in 2 years

CurrentAirline9065

it is insane that a company that used to generate 12B a quarter in FCF is having to dilute shareholders to fund capex

CurrentAirline9065

META and Google now FCF negative. Indexes better find some new growth stories quickly

CurrentAirline9065

picks and shovels peaked in FCF growth 2 quarters ago losers, its time to hop in recent IPO's with positive inflecting operating income

Careless-Place-170

and yet negative FCF, dilution and debt. huh

B1g_C4p1T4l

FCF was actually negative ~$2.1B this quarter w/ $34.9B capex. the class C thing reads more like setting up to issue stock for AI spend than a normal split tbh

shiny0metal0ass

-$2.12 billion FCF. So you guys keep cheering, let's see how that goes

fredditf

Tesla Q3 2026 Earnings $TSLA Adj. EPS $0.48, est. $0.44 Rev. $28.05B, est. $28.13B EPS $0.22, vs. $0.39 y/y Gross margin 19.6%, est. 17.8% Automotive rev. $20.56B, est. $19.83B Services and other rev. $4.61B, est. $4.3B Energy generation and storage rev. $2.88B, est. $3.91B Oper income $718M, est. $599.3M Active FSD subscriptions 1.74M, est. 1.57M FCF $1.53B, est. -$4.99B Achieved second consecutive quarter of TTM rev. above $100B

atdharris

Good quarter for Meta overall. Great guidance revenue wise. Obviously FCF isn't good but that was to be expected.

SolutionWarm6576

ROIC and FCF are declining and massive Capital expenditures on Optimus, Robotaxi, and Cybercab. He definitely wants to bury this like XAi, with a SpaceX/Tesla merger.

InternationalKiwi401

one quarter of FCF down 14% vs nine months up 13% to $6.7B, i know which one im weighting more. they raised the full year guide to $9.1-9.4B too so Q4 needs roughly $2.4-2.7B. thats a checkable number, we will know pretty soon if it was real.

Boring-Test5522

FCF is good to determine a healthy business. Dillution and market cap are more important to determine stock movement😎

nuttreo

Anthropic H1 2026 (draft S-1 summaries): Revenue $16.3B (top line, from $1.1B prior year). Compute/infra spend \~$9B. Other opex leave residual \~$8.7B operating loss. \+$72B non-cash fair-value charges on rising convertibles. = Net loss $80.7B (bottom). Q3: Rev $16.8B, GAAP gross margin 85%, adj. op. margin 11%, positive FCF and adj. profit.

Thelakefeben

ITM calls expiring may. Sell during Q4. I’m expecting meta to drop on Thursday due to CAPEX and FCF

Primary_Olive_5444

The answer for Elon, is BWXT or GE Vernova Personally, i'd go with BWXT. Mid-cap stock with positive earnings and free-cashflow (growth in FCF as well) Full stack -> from fuel, SMR, plants, power delivery. It's that much better relative to those other nuclear play. https://preview.redd.it/aaa26dg9pqwh1.png?width=2232&format=png&auto=webp&s=6afe43bddd4bd7dd9b59a95bd7e5bb305a2afd33

shiny0metal0ass

Because fuck FCF, we don't give a shit.

VivianChang_VC

AWS reaccelerating is the whole thesis. Retail margins and ads are nice, but if AI capex doesn't convert to backlog at decent returns, $350 is just a multiple on hope. FCF is getting squeezed meanwhile.

JabCrossE4E5Quark

No sign of a bubble, there's just billions of chips sitting in warehouses not being used and FCF to market cap is at 99 levels. Yup, stocks are cheap.

Fredidiah

I'd expect them not to have negative FCF this time, but I don't expect them to pull back significantly on spending.

JabCrossE4E5Quark

Isn't it hilarious how companies are going FCF negative to buy overpriced chips that sit in a warehouse. You would think the "forward looking" market would see this ans realize how bad this is for future returns, but instead we meme up 1.5% in half an hour on fake news

shiny0metal0ass

Noooo.. it might get an earnings bump tho. I'm not expecting one from the rest with FCF as it is.

tradematesHQ

CoreWeave delivers hyper revenue growth (+115.26% YoY) fueled by generative AI demand, but a towering $51.61B total debt stack, a negative $5.74B quarterly FCF burn, and aggressive insider dumping make the stock highly speculative. The investment score at trademates is only 33.

Disastrous_Rent_6500

Stocks with high FCF/Earnings yields

Disastrous_Rent_6500

Just put the cash into high return/FCF stocks

Thatcher_Is_Mommy

Oil gets like 1% of the attention that people spend on AI, despite any random oil ShitCo printing multitudes more FCF than all the AI-labs combined.

jrex035

I expected tanker equities to take a breather after their insanely strong surge in September/early October, but the sell-off is now overblown imo. Most equities are down 15-20% in the past few trading days on fears of rates normalizing and worries that Trump will unsanction dark fleet tankers sanctioned for carrying Iranian (lol), Russian, and Venezuelan oil. But these equities haven't even properly absorbed the insanely high shipping rates of July-September, let alone the more recent surge from late September to mid-October. For q3, FRO is looking at ~25% FCF yield, ~24% dividend yeild, a forward pe of ~4, and p/NAV of ~1.1. DHT is looking even better with a ~30% FCF yield, ~29% dividend yield, forward pe of ~3.3, and p/NAV of ~0.8. For tanker companies, their biggest expense by far is their ships themselves. VLCCs typically cost about ~$250m brand new. The shipping rate from the ME to Asia and the Gulf of Mexico to Asia is currently about $80-90m. In other words, these companies are able to pay off their biggest expenses after just a few trips back and forth. Absolutely insane profits right now, even before the recent surge in rates

Good_Ride_2508

I appreciate your help. May I know what is the likely margin FCF margin, Growth rate and terminal value I can try? Thanks again.

_hiddenscout

Opened a position in BHE this morning. Boring type of company that I like. Valuation isn't too terrible. [https://stockanalysis.com/stocks/bhe/statistics/](https://stockanalysis.com/stocks/bhe/statistics/) Forward PE of 22, TTM PE of 49, PEG is 1.01, with P/FCF at 19. ROIC and margins are a bit lower than I like, but overall, the company hits a lot of themes that I really dig. What they do: >It provides design and engineering services and technology solutions, including new product design, prototype, testing, and related engineering services; and custom test and automation equipment design services. >The company also offers electronics manufacturing and testing services, such as printed circuit board assembly and test solutions, assembly of subsystems, circuitry and functionality testing of printed assemblies, environmental and stress testing, and component reliability testing; component engineering services; failure analysis; and systems assembly and test development solutions include subsystem and system-level integration, configuration, and testing for various industries, as well as in-circuit test, functional test, defect analysis, environmental stress screening, reliability testing, and custom test solutions. >In addition, it provides precision metal machining, complex vertically integrated assemblies, e-beam welding, full electromechanical assembly of machined subsystems, and system integration and test services. >Further, the company provides value-added support systems; supply chain management solutions; direct order fulfillment; and aftermarket non-warranty services, including repair, replacement, refurbishment, remanufacturing, exchange, systems upgrade, and spare parts manufacturing throughout a product’s life cycle. >It serves original equipment manufacturers in the advanced computing and communications, aerospace and defense, industrial, medical, and semiconductor capital equipment industries. Latest earnings presenetation: [https://s203.q4cdn.com/219528228/files/doc\_financials/2026/q2/BHE-Q2-2026-Investor-Presentation-vF.pdf](https://s203.q4cdn.com/219528228/files/doc_financials/2026/q2/BHE-Q2-2026-Investor-Presentation-vF.pdf)

Effective-Banana2401

That 15% growth cap is doing lot of heavy lifting here, especially when raw number was 175%. I get why you clamped it but maybe a phased approach works better, like 30% for first 2 years then tapering down to 10%. Flat 15% for whole decade feels too smooth for a company that just had this kind of spike Also your terminal value is like 2x the 10-year cumulative PV, that's a red flag usually means your growth assumptions or margin are bit aggressive. 40% FCF margin over 10 years is pretty optimistic unless they got some crazy moat

Rabitai_Trades

Agree, and the street is already braced for a big number. Guggenheim just bumped its 2027 capex estimate to 225bn. The bit that worries me more is free cash flow, it was under 1bn last quarter. If they guide capex up again and FCF stays near zero they're basically funding it with debt, and with rate hike talk back after the hot CPI print that's not a great look.

Savings-Novel3772

Yeah. That’s probably the reason I’m whining now - it was exceptionally cheap. Like 3 years FCF is that’s it, full EV paid

Legitimate_Risk_1079

Using Friday, Oct. 16 closes, VRT | Vertiv Holdings - Current Price: $206.42 - Market Cap: $79.5B - Bull Target (12–18m): $285–$320 - Bear Target: $165–$180 - Upside: +38% to +55% - Downside: -13% to -20% - Reward-to-Risk: ~2.6:1 🟢 - Success Probability: 70% - Forward P/E: ~26x - Debt-to-Equity: 0.70 - Debt/EBITDA: 1.19x 🟢 - Total Debt: $3.34B - TTM Revenue: $11.48B, +26% 🟢 - TTM Net Income: $1.73B, +113% 🟢 - 2026 Revenue Estimate: ~$14B - 2026 FCF Estimate: ~$2.55B - Price Trend: Strong multi-year uptrend, but ~46% below 52-week high 🟡 - Bull-Case Market Cap: ~$110B–$123B - Risk: Moderate-High - Conviction: 8/10 - Grade: A- Vertiv provides power and cooling infrastructure for data centers, making it one of the cleaner infrastructure beneficiaries of AI expansion. The combination of strong historical shareholder performance, profitability, accelerating earnings, manageable leverage and >2:1 reward-to-risk is enough for me to keep VRT in A-range at $206.42. BE | Bloom Energy - Current Price: $221.31 - Market Cap: $65.2B - Bull Target: $285–$320 - Bear Target: $150–$175 - Upside: +29% to +45% - Downside: -21% to -32% - Reward-to-Risk: ~1.4:1 🔴 - Success Probability: 55% - Forward P/E: ~62x 🔴 - Debt-to-Equity: 1.72 - Debt/EBITDA: 6.23x 🔴 - TTM Revenue: $3.11B, +91% 🟢 - TTM Net Income: $245M 🟢 - 2026 Revenue Estimate: ~$4.1B - Share Dilution: +24.7% YoY 🔴 - Price Trend: Massive long-term appreciation, but extremely volatile - 52-Week Range: $75.70–$351.28 - Risk: Very High - Conviction: 5/10 - Grade: B- Bloom's growth has become spectacular as AI data centers demand more power, but 62x forward earnings, 20x sales, heavy dilution and sub-2:1 reward-to-risk make the current valuation difficult to justify. The business is finally delivering, but at $221 I'm not chasing it. CBRS | Cerebras Systems - Current Price: $127.21 - Market Cap: $30.2B - Bull Target: $200–$250 - Bear Target: $80–$95 - Upside: +57% to +97% - Downside: -25% to -37% - Reward-to-Risk: ~2.4:1 - Success Probability: 40% - Forward P/E: N/M - Debt-to-Equity: 0.16 🟢 - Cash: $7.92B 🟢 - Total Debt: $1.49B - Net Cash: $6.43B 🟢 - TTM Revenue: $681M, +112% 🟢 - TTM Net Loss: -$487M 🔴 - Free Cash Flow: -$680M 🔴 - Price/Sales: ~44x 🔴 - Share Dilution: +61% YoY 🔴 - IPO Price: $185 - Price Trend: Severe post-IPO collapse 🔴 - Risk: Extreme - Conviction: 3/10 - Grade: C Cerebras builds wafer-scale AI processors designed to compete with GPU-based AI infrastructure, and its 112% revenue growth and $6.4B net-cash position are impressive. But at $30B it trades around 44x sales while losing nearly $500M annually, burning $680M of FCF and sitting roughly 59% below its first-day high, so the fundamentals haven't caught up with the valuation yet. Ranking: VRT A- > BE B- > CBRS C.

Intelligent_Tie_1109

Well whats your thesis (price target) and does the math from future FCF work to support that on a conservative basis (examine the 10-K and most recent 10-Q)

Disastrous_Rent_6500

There’s a lot of stocks making +10% earnings/FCF yields right now. If you don’t need income, bond can’t beat these stocks

AnyManufacturer6465

What did Yahoo do to build a defensible moat? Oh yeah, they didn’t. Look at Anthropics revenue. If they stopped training models today they would be massively profitable and FCF positive. Today!

AnyManufacturer6465

They’re building a new tech and training new models at scale. If they stopped training their models they would be massively profitable and FCF positive Remember when Google plowed all its money into building their tech and people said they were doomed?

Zealousideal_Wall627

Most of the hyperscalers aren't even needing that much debt at all right now for capex. They just use their huge FCF

TopCut237

Which companies are doing an Enron this time? MAG7 are largely spending FCF with a small amount of total leverage- their nominal FCF buys them out of a lot of worst case scenarios. Anthropic and even OpenAI are set to reach profitability no later than 2030, with custom ASICs massively reducing both energy take and chip cost. You can hate on the hype and you're right to, but these companies are in a growth phase with capex costs that *dont* last forever. Yes replacement chips every 3-4 years is expensive, but not as expensive as permitting, building physical infrastructure, advancing an SMR company $3b to build some power to manage costs, and only benefit from that from 2030 (META and Oklo), AND buy some of the most expensive chips in history. Instead you've got some rent in some cases, cost of financing in most cases but the local (almost or in some cases actual private wire), and far cheaper Trainium chips. That drops the cost base substantially if we've done a typical leap-and-plateau in the technology and inference becomes the major energy draw. Inference is directly tied to paying customers while training is linked to product development. These guys do have a future, and there will be losers, but the biggest of these companies arent Enron. Its market corrections that rob you of your investment for a decade you have to watch out for, and thats kept me sensitive to chipmaker risks even if theyre printing money right now.

Creeper15877

How is it even possible to calculate a credit rating without FCF?

drummer820

Holy shit, they didn’t even disclose FCF/EBITDA to a rating agency?? The S-1 is going to make WeWork look like child’s play

Party_Shoe104

CRWV has $51.6 Billion in Debt and only $6.9 Billion in cash. That is a 13.4% cash to debt ratio. T has $162.9 Billion in Debt and only $17.9 Billion in cash. That is a 10.9% cash to debt ratio VZ has $188.5 Billion in Debt and only $2.3 Billion in cash. That is a 1.2% cash to debt ratio. Is the reason why no one is crying about the telecoms because last quarter VZ generated $5.4 Billion in FCF, T generated $5.2 Billion.....while CRWV lost $5.7 Billion? It took VZ 6 years to turn profitable.. Wall street analyst consensus is projecting CRWV to turn profitable in 2027. That is quite a bit faster than when VZ did it.

RaduCampean

I would dare to say: a demo doesn't pay CAPEX. Whatever the Roadster does on stage, I'd look at the cash flow first. Free cash flow was about $5.8B over the last twelve months, and the June quarter was negative $1.1B because capex hit $5.8B in one quarter. On a $1.46T market cap that's a 0.4% FCF yield. I gave it 15% growth for five years, which is generous, and my median value came out near $55 a share. By my math roughly 87% of the price is an option on robotaxi and Optimus, so how do you value that part?

AltAccount191323

As long as he can issue 100 billion $ worth of shares at 0.00001% FCF yield none of the costs matter. The old socialism joke: SpaceX works until you run out of other peoples money

Klanciault

I’m not crying I never invested in it because of the financials. Fair market value for a company that owns 75B worth of stuff and has 74B worth of debt obligations and a FCF of -19B is at best 10B and that’s extremely generous Coreweave is also not a hyper scaler they are a neo cloud and their leadership are bozos who got extremely lucky off a crypto gamble gone wrong and should have cashed out

Tr0janSword

Anthropic has positive FCF and positive operating margins. Their contribution margin on compute is 35% and growing. Inference has always been profitable. Anthropic has 85% gross margins. Inference providers are profitable today bc they don’t pay for training. But, their cost of compute will be 2-3x more than Anthropic bc they rent GPUs on short-term deals from cloud providers. The problem for inference providers is the model goes obsolete every 6-8 months and is fully reliant on China to keep producing it. The Chinese were able to shortcut their training by distilling Claude. They can no longer do that. So, they need to match the frontier labs on training compute.

Legitimate_Risk_1079

GFL | GFL Environmental - Current Price: $43.55 - Market Cap: ~$15.8B - Bull Target (12–18m): $55–$60 - Bear Target: $34–$37 - Upside: +26% to +38% - Downside: -15% to -22% - Reward-to-Risk: ~1.8:1 🟡 - Success Probability: 60% - Expected ROI: ~+13% - Forward P/E: N/M - Debt-to-Equity: Elevated 🔴 - Long-Term Debt: ~$9.6B 🔴 - Cash: ~$192M - Net Leverage: ~4.0x 🔴 - 2026 Revenue Guidance: C$7.51–C$7.53B 🟢 - 2026 Adjusted EBITDA Guidance: ~C$2.29B 🟢 - 2026 Adjusted FCF Guidance: ~C$900M 🟢 - Q2 Revenue Growth: +16.3% 🟢 - Organic Revenue Growth: +6.4% 🟢 - Q2 Adjusted EBITDA Growth: +14.8% 🟢 - Q2 Adjusted FCF: $236.7M 🟢 - Price Trend: Long-term underperformance / essentially treading water 🔴 - Market Relative Performance: Underperforming 🔴 - Comparable Companies: Waste Management, Republic Services, Waste Connections - Risk: Moderate - Conviction: 5/10 - Grade: B- GFL is a major North American waste-management company with improving revenue, EBITDA and free cash flow. The fundamentals are getting better, but long-term shareholder underperformance, market underperformance, leverage and sub-2:1 reward-to-risk keep it at B-. RKLB was graded before at C+

benny-trill

Once the capex cycle for the hyperscalers slows then eventually ends, all their existing FCF + profits made from the capex spend will flow back aggressively. The spending and debt they are taking now will be covered and their FCF will explode. They've shown this cycle time and again.

shiny0metal0ass

I mean as long as their FCF and crazy debt doesn't freak everyone out. Especially if it happens while more data center delay news comes out. Or Anthropic or OpenAI say something fucking stupid again. Yeah, all of that aside.

Ambitious_Snow840

Anthropic FCF positive per The Information.

jrex035

The correct move for sure. These equities are hilariously undervalued as is. Energy prices are going to structurally reset at a higher level after this crisis and more than a decade of underinvestment. We're in the midst of the worst energy crisis in history and they *still* can't catch a bid. These companies aren't rushing to dump their FCF into expanding capacity, but paying down debt, returning shareholder value through dividends and buybacks, and through m&a to improve efficiencies.

jrex035

>PE is one metric, you need to look at cash flow, growth. Aapl still leads. PB of ***46.6***, P/FCF of 36.74, PEG of 3.36, FCF yield of 2.7%, PS of 10.76, forward PS of 9.8. By just about every metric its overvalued. Great that its got cash on hand, what's it gonna do with that money?

jrex035

Another day, another inexplicable drop in energy equities. We're in the middle of an energy crisis with no easy way out, one that gets worse literally by the day, a crisis that's the primary contributor to soaring inflation, and people are *selling* energy equities??? Let's take a look at CVE which is down more than 2% today. It's got a pe of 12.6, a forward pe of 9.5, ps of 1.58, forward ps of 1, FCF yield of ~9%, dividend yield of ~2%, pb of 2.5, and EV below market cap. I can see why people are dumping this to buy AAPL at a $5T market cap lmao

theruthlessinvestor

I treat stock comp as a real expense. FCF adds SBC back since it's non-cash, so subtract it out and watch what's left per share over a few years. If the buyback is just offsetting dilution, the cash is basically covering stock comp, not increasing what you own. Flat share count isn't automatically bad. If cash per share keeps growing and they're not overpaying for the stock, fine. But if SBC is big, the count isn't dropping, and FCF per share after SBC isn't growing, you're spending a lot of money just to stand still.

ReadDailyFive

One way to separate the two: treat the buyback dollars that just offset SBC as a compensation expense, not a capital return. Take net shares retired times average price paid as the "real" buyback, and subtract the rest from free cash flow when you value the business. A flat share count can still be fine if SBC is modest relative to FCF and the repurchases happened below a reasonable estimate of intrinsic value, but if offsetting dilution eats most of FCF every year, the headline buyback is really just a payroll line.

Sufficient_Habit5091

You can also buy stocks in systems that are being more responsible. Like Europe has some bad apples but overall they are on a much more fiscally sustainable path. Many low debt nations like Norway, Denmark, Switzerland, Luxembourg, etc. ECB is shrinking its balance sheet. That said, I agree pretty much with everything you said. Which is why even though valuations based on actual FCF looks totally bonkers today I'm still 80% in the market.

jrex035

I keep buying companies with low PEs and high FCF and watching them languish while AAPL runs up almost 40% in a year because reasons

jrex035

I'm genuinely dumbfounded by the price action. Its a $5T market cap equity with a pe of 40, PEG of 3.36, and a 2.7% FCF yield lmao It's 10 year average pe is ***25***

shiny0metal0ass

Well the big issue is that they don't have big pockets anymore.. FCF has been down for most of the year and they are both leveraged right up to their nipples.

jrex035

Maybe, but WMT in particular is laughably overpriced. 42 pe, 38.66 forward pe, 1.43% FCF yield, 9.39 pb, PEG or 3.62, P/FCF of 69.82, debt/equity of .72, debt/FCF 5.56. It's a safe "value" equity that's already priced at a premium. It's a place to park cash because it probably won't fall much, not because it's got room to grow. WMT's 10 year average pe is 28

Severe-Weekend-6664

No position in PLTR. Your FCF margin assumption is basically flat to today (\~42% TTM), so that's not where the pessimism hides. The exit multiple is the real swing factor: if Palantir is still growing 20%+ in 2031, a mature-software multiple undersells it.

Ok_Rent5670

Can RDDT have an up day please? No debt, great earnings, so much FCF, solid retarded user base. Like please?

Ambitious_Snow840

if I hear from another dumb fuck redditor that works construction that's convinced they know GAAP or FCF or anything about chart or lines I will lose my mind. IF ANY RETARD COMPARES 2000 TO TODAY THEY ARE OBJECTIVELY RETARDED.

i_empathetic

They didn't spend their entire FCF on AI datacenters

Due_Entrepreneur1088

FCF 15-18b should give 1T by 2028

Wild_Following_7475

So when will you realize a gain ? Look at the yields : |Stock|Your price|Earnings yield|FCF yield| |:-|:-|:-|:-| |AMAT|$459|2.5%|1.5%| |MU|$939|8.0%|5.5%| |FN|$414|3.1%|0.03%| |NVDA|$224|3.5%|2.3%| |NBIS|$189|\~0.1%|Negative| |LRCX|$295|2.0%|1.3%| |NU|$15|4.9%|Negative\*|

Such-Ad3356

Well actually no, they made profit as well as positive FCF

TimeTravelingChris

Revenue is revenue. No one is claiming that $16B is FCF.

vish_NZ

AH still fucked, and $16.8b x 4 to get an ARR is still sub $70b. Adjusted cash flow positive, wonder how dreadful reported FCF truly was.

Sufficient_Habit5091

The only way those valuations and these yields logically make sense is enormous inflation growth coming, with Fed doing little about it. You certainly can't justify it based on FCF.

shawman123

I think they are right. These companies have value as long as capex are up. That cannot sustain for ever. At some point Capex would as much as entire GDP. How would companies get ROI on it. Unless they manage to sell AI tokens to Aliens its not going to be successful. That still does not mean that these companies can generate huge revenue before that. But when will they be FCF positive. At least memory stocks are generating enormous FCF which they can keep in the sidelines and take the whole company private during next bust :-)

looool_k_libtard

Those are old bonds to be fair. Their business model absolutely struggles in high rate environment, ceo still confident throughout 2027 books become manageable and 2028 become FCF machine. Probably why Jensen supports them so much, though it’s a rounding error for them if CRWV fails.

_hiddenscout

Anytime! Learning to screen is what really helped me the most in my investment journey. It's cliche, but I really think Buffet's tip around: 'It's Better To Buy A Wonderful Company At Fair Price Than A Fair Company At A Wonderful Price', is one of the best he's given. The question then becomes, what is a wonderful company and what is a fair price. That's why I like to screen, it helps me set the idea of what I think a wonderful company is, which is stull like ROIC, revenue growth. Then the other question is what is a fair price, which is why I like looking at things like P/FCF and PEG. That's what is so interesting about investing, you can totally set up different criteria and define what you think a wonderful company is and could be different than mine. Been saying for years here, valuations matter, because it's really about the price of what you pay for a piece of a company that will help define what kind of returns you get. One thing that people get wrong a lot is the fundamentals thing. Like fundamentals matter more for a long term investment, not day to day trading. All this is trying to set you up to do succeed. Like not all the names I've suggested have done well or have been home runs. Like I've suggested some bad names, but overall I stand by track record. I also got lucky with timing. Before AI was a thing, I was going long with electrification, data center, reshoring plays. That's also how I like to invest, with some narratives. I like the idea of combining the idea of what could be big long term growth or tailwinds and then pair it with companies with GARPy fundamentals. This approach basically helped outperform the market the last 5 years without having to be a bear or bull or do very much.

_hiddenscout

Basically any name I bring up here comes from just screening. Like this is one my base screeners: [https://finviz.com/screener?v=111&f=fa\_epsqoq\_o5%2Cfa\_peg\_u2%2Cfa\_pfcf\_u40%2Cfa\_quickratio\_o1%2Cfa\_roi\_o10%2Cfa\_salesqoq\_o10&ft=2&o=industry](https://finviz.com/screener?v=111&f=fa_epsqoq_o5%2Cfa_peg_u2%2Cfa_pfcf_u40%2Cfa_quickratio_o1%2Cfa_roi_o10%2Cfa_salesqoq_o10&ft=2&o=industry) I also use stockanalysis, but i can't share the screener, since the parameters are set locally. But they are awesome as well. I use both, since they calculate the PEG differently, so it's nice to use more than source of truth. You can just set the parameters there to be the same. I'm a GARPy investor, so my goal is to buy growth, but something that is at a good price or undervalued. Some of the things I look at are things that I consider make good companies, like ROIC that is above average, Quick ratio above 1, meaning they can handle their inventory/cash/make acquitisions, look at short term EPS and Revenue growth and a P/FCF under 40, since I like P/FCF better than PE.

ZucchiniConstant

that is a hard one, you can't go off P/E. They look at FCF and cash on hand more than PE. The sector is 1000% inflated and juiced big time, but that doesn't mean its going to tank. I mentioned OKTA because it has ran so much also looking at the chart it had two days down over 4% since April which is crazy for something that had ran over 250%. regardless expect these stocks to stay elevated PE until earnings show other wise or their entire sector gets revalued at that time prices will plunge, but in the mean time there is still money to be made both ways. sometimes its better to be know less than use logic to shoot ourselves in the foot. trust me, i definitely have done that so many times over. I owned tsla before any splits in the 100's. lets just say i should of held back then lol. Others will disagree and say if you buy now regardless you will make money in this sector and long term they're right, but also i would much rather buy lower long term. I do believe before years end we see lower prices on a lot of these cyber companies.

Anoncry66

dark as the macro looks, these late-cycle resets are actually where generational wealth is built. when the speculative hype gets washed out, capital has to flow back into fundamental value, high FCF, and real yields. UK/European markets are already trading at massive discounts compared to bloated US tech. once the dust settles from the re-rating, there are going to be incredible long-term entries in solid, cash-generative businesses.

Odd-Web4113

It is apparent every investor is being engrained with the cyclical nature of the business. It is. Now, we are worried about china coming. They are. Regarding cyclicals - I look at this extending into 2035 as they have to get infrastructure built to handle the processing needs. Every model, though they will get more efficient, has trillions of parameters and that most likely will continue to grow. Regarding China coming - there is a bit of a lag for them as clients will have to get comfortable they can handle the loads and have the quality. That will take time. In the mean time MU does have a backstop going for it. It has locked in pricing for 35% of its revenue through 2030 and will hit 2030. Exactly what Musk's X post was suggesting. Secondly - the buy back will push all FCF back to clients which will only help P/E numbers. They will be taking out $35B of stock (let's say 3% in Dec / Jan). They will move quick b/c their goal will be to announce buy backs at every earnings call. Some are projecting additional 150-200B in calendar year 2027. If that is the case, you are taking out possibly 15% of your market cap at these prices. So, reality is you won't get a 10X multiple on this, but there is a material backstop for this company and pull to make 10-20% on your money over the next 12 months...maybe more if market sentiment changes. I am holding it. It is a good component to own in a portfolio IMO.

Disastrous_Rent_6500

I just buy great High Earnings/FCF yield stocks. The stocks I buy these days have a 10% FCF or earnings yield

ZucchiniConstant

entra has more of market share than okta does, how is okta a gatekeeper? its doesn't own the lions share in any of SAM's its in. also they're not converting securing identities to revenue hence the ai revenue not even being large enough to be on earnings. you present an oxymoron with your statement. they don't care about ai revenue being material yet, they care that every company deploying AI will need to manage and secure those those agents. One they will never be able to charge per agent, but two who is to say that okta will largely in the mix. the ai boom started 4 years ago and more ai agents are being deployed than ever and their growth rate is down to 11%, they're not guiding up to match demand because there is none that is convertible to revenue. again they own under 5% in identity sector as a whole. they own 17% market share roughly in sso and iam which entra aka msft owns nearly double in both. also OKTA is worth more than their entire SAM combined right now, so even if they did own 100% which they do not it would be overvalued. here is what i said about FCF jump its an accounting game, not an actual improvement. FCF rose to 40% by doing a few things. slashing capex spending and internal spending. In their official guidance for the full year, management explicitly cautioned that full year cash margins will actually step down (guiding FCF margin to 28% down from 31% delivered previously) due to lower interest income and share buyback cash drains. FCF at 40% is not compoundable rate and even the company itself stated 28% margin on the year for FCF, but like i said some good accounting to make the quarter look solid.

shiny_collision

the market's pricing in the future, not the present. okta's basically become the gatekeeper for nonhuman identities which is where everything's headed with AI agents and automated workflows investors don't care that ai revenue isn't material yet, they care that every company deploying AI will need to manage and secure those identities somehow. it's a land grab play plus that FCF jump and margin improvement shows they're actually executing, not just riding hype. sometimes boring infrastructure wins when the narrative shifts

Severe-Weekend-6664

No position in PLTR. Your FCF margin assumption is basically flat to today (\~42% TTM), so that's not where the pessimism hides. The exit multiple is the real swing factor: if Palantir is still growing 20%+ in 2031, a mature-software multiple undersells it.

ZucchiniConstant

I looked into their revenue a little bit more because i knew i missed some, so that income increase of 66M 64% of that was non-cash accounting adjustments. Stock-Based Compensation (SBC) expense temporarily dropped on a quarterly comparison basis, and purchase amortization fell from $17M to $3M. Looks great on paper but when you dig down more accounting tricks, moving money around and less about their actually business doing better. FCF rose to 40% by doing a few things. slashing capex spending and internal spending. In their official guidance for the full year, management explicitly cautioned that full year cash margins will actually step down (guiding FCF margin to 28% down from 31% delivered previously) due to lower interest income and share buyback cash drains. FCF at 40% is not compoundable rate and even the company itself stated 28% margin on the year for FCF, but like i said some good accounting to make the quarter look solid.

Nausteri

If you value the business based on FCF, you should consider Karp mentioning on CNBC that in two years their FCF is $15-18B. The rate at which it scales right makes me want to stay regardless of future multiple compression. My thesis is 1T by 2030. Full disclosure I have been on it since 2020 but added considerably in 2025-2026.

Thelakefeben

I’m banking off their FCF

figs_and_flour

We could debatably say that OKTA doesn’t necessarily need AI revenue today for the market to price in future demand for cybersecurity as AI expands. Their core business is identity/access management and cybersecurity is integral to AI adoption As companies deploy more AI agents/automated systems, the need to secure both human and nonhuman identities will only become more important. Investors may be pricing in that LT opportunity rather than Okta’s current AI revenue. Whether that justifies its valuation is a separate question Their revenue also grew revenue 11%, op income increased from $41M to $107M, FCF rose 40%

spaceface101-_

U gotta understand, in Capitalism wealth continually centralizes. I bet u without any policy change, in 200 years from now it will be big 5 holding up the market not big 10. The key to understand is that AI is ushering in a new wave of investment and productivity and there is a massive race to it. Sure it's possible it's gone up too much and there's gonna be a correction but indexes will continually pump as long as there is more global efficiency and gains to be had. The buffett indicator means literally nothing. If I can predict with more confidence the next 100 years of a company's cash flow compared to 20 years previously, the value of the stock is going to increase and it will look overpriced using these metrics. The only thing that matters is future FCF

Kollv

I'll let AI respond to u, regard • Alphabet (Google): Reported a Q2 2026 free cash flow deficit of -$5.9 billion, marking its first negative quarterly FCF in over two decades as infrastructure and AI spending scaled up. • Amazon: Shifted trailing 12-month free cash flow into the red at -$7.6 billion, driven by massive data center and hardware investments despite strong revenue growth in AWS. • Tesla: Experienced negative free cash flow as operating margins compressed and capital demands mounted.

Ambitious_Snow840

The depreciation argument is dead as well. You can drop that, Burry. Short-term deals for 7 year old GPUs have seen higher revenue ($40 - $50 MW+). Particularly with actual clouds, not just server farms. E.g. AMZN, NBIS, CRWV, MSFT. FCF and depreciation are two different things. FCF adds back depreciation. Meanwhile most people with experience in software/SaaS/high capex businesses don't necessaryily care about short-term free cash flow. Capex is the means to grow the business. Want to start an airline? Have to get some expensive ass planes and booking software before you can start making revenue. Want to start a gold mine? Need expensive ass dump trucks and diggers before a single chunk of gold comes out of the ground. Meanwhile, the legacy revenue is what gives them to ability to fund high capex. They're lucky. and the rapidly accellerating revenue gives them the ability to continue capex. They won't be reducing capex for years. AI is to big of an opportunity.

AnotherThroneAway

Yes, but anytime they want to, they can toggle back to printing FCF, which makes them far safer than the hundred or thousands of companies that can't

AnotherThroneAway

They already do care. Just not enough to derail the buildout. The big thing is that they can flip the switch back to FCF positive whenever they want.

xxora123

It's an opportunity cost question. If they aren't invested in AI and AI truly is the future, they're done. They could not invest and sit on 100s of B of FCF but that won't matter if by 2030 they're redundant. This question is probably why Apple has been less invested, the threat to their business model is less apparent

imacompnerd

So, q2 was over $800 million in revenue, which already annualizes to $3.6 billion I revenue, even if growth stopped here, but they’re still growing 45-55%, with 91% gross margins. Let’s flip it around, what stocks are growing over 60% YoY for 8 quarters straight, that aren’t cyclical (eg, memory, chips, etc…), aren’t SaaS, have almost zero capex, already has a high FCF margin, and has a better valuation multiple with a PEG around 0.7?

jrex035

Say what you will about the business practices of the robber barons of the firsr Gilded Age, at least they actually built business empires full of companies that actually produce things that people need/want. The FCF of their business empires were absolutely insane, unlike Musk's debt-ridden house of cards built on delusional shareholder expectations. Also worth noting that the OG robber barons actually created things that benefit the American public even to this day, including funding and building brand new universities, schools, hospitals, libraries, parks, institutions, and more. What the fuck has Elon Musk done with his wealth? How has he given back to the public? It's insane that the ***robber barons*** were more of a net positive for society than their modern oligarchs.

imacompnerd

I use Reddit every day, quite a bit. Beyond that, I don't see ads at all since I pay for the Reddit premium. With that said, I don't have to guess how many ads others are seeing nor if anyone else is clicking on them. The quarterly earnings show the numbers, which have been incredible! Show me another company that's had: * 8 consecutive quarters of 60%+ YoY revenue growth * 90%+ gross margins * Dramatically increasing FCF margins (and is already extremely FCF positive) * Has billions in net cash on hand * Trades at a PEG of around 0.7 * Has consensus revenue growth estimates for the next 3 years at 35% (which is what they also had for 2025 and 2026, which then had to be dramatically increased as RDDT wildly beat revenue and earnings estimates) * Isn't a SaaS * Is not a cyclical company (such as chip stocks) Seriously, list some other companies that are as profitable and growing as fast as RDDT, that have a PEG in the 0.7 range.

Jeff__Skilling

dude, you clearly have no fucking clue how to read a statement of cash flows making the claim that stock based compensation "destroyed" all of RDDT's FCF is completely nonsensical -- stock based comp is just an **add back** to **accrual income** to arrive at the change in cash for the period, which is effectively the entire purpose of the SCF: to provide a reconcilliation from GAAP-income to cash-income you also claim that $35bn of their OCF went to "investments".....when what's obviously happening is NVIDIA has a fuck ton of idle cash on their balance sheet and is dumping it into their own money market account (vs just letting that cash sit in the bank earning 0.2% interest annually) Making the claim that NVIDIA is "really putting their money to work" and "reddit isn't" is completely rediculous -- NVIDIA generated $262bn in OCF in Q2'26, of which they spent they spent ***0.4% of their operating cashflow on capex***, which doesn't really strike me as "NVIDIA is plowing back all their excess cash flow into the business vis-a-vis capex" ....and this is all before we address the two fundamentally different business models, with completely different cash-flow profiles and risk profiles. One is a social media company and the other manufactures GPUs......