I don’t think the article deserves to be called a nothingburger. The numbers are truly wild and everything points to a bubble in AI. Sure, they managed to pull in $33Bn in revenue q1-q3 which is an impressive leap from previous year. But even when you take the large fair value adjustments out of the picture, they are still in the red on real operating profit and have always been so.
And with that backdrop they are projecting to spend an almost incomprehensible $895Bn more on compute and infrastructure. That insane number is not a guess or speculation, they said that’s the value of purchase commitments and lease agreements. Where in the heck are those real dollars supposed to come from?
As a borrower or shareholder I would be rightly nervous about how realistic their revenue goals are when stacked against so much investment. When, if ever, can revenue match the spending? It seems unsustainable, but time will tell…
I don’t think the article deserves to be called a nothingburger. The numbers are truly wild and everything points to a bubble in AI. Sure, they managed to pull in $33Bn in revenue q1-q3 which is an impressive leap from previous year. But even when you take the large fair value adjustments out of the picture, they are still in the red on real operating profit and have always been so.
And with that backdrop they are projecting to spend an almost incomprehensible $895Bn more on compute and infrastructure. That insane number is not a guess or speculation, they said that’s the value of purchase commitments and lease agreements. Where in the heck are those real dollars supposed to come from?
As a borrower or shareholder I would be rightly nervous about how realistic their revenue goals are when stacked against so much investment. When, if ever, can revenue match the spending? It seems unsustainable, but time will tell…
Sorry, I was referring purely to the headline as the nothingburger. I agree there’s plenty of information to consider.