Articles Tagged: capex

6 articles found

Oracle’s 30% Spike: Cloud Megadeals, AI Capacity, and a $455B Backlog — Does the Outlook Justify the Rerating?

Oracle rocketed after earnings despite a headline EPS and revenue miss, as investors focused on an extraordinary multiyear demand picture tied to artificial intelligence and cloud infrastructure. Remaining performance obligations surged to $455 billion, management mapped a path from roughly $10 billion of OCI revenue in FY2025 to $18 billion in FY2026 and as high as $144 billion by FY2030, and capex is set to climb about 65% to approximately $35 billion this year to build capacity. The core debate now is whether backlog quality, conversion tempo, and execution against aggressive capacity plans can sustain the stock’s rerating in the face of power, supply, and competitive constraints.

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Alibaba’s Q2 Reality Check: Cloud Momentum vs. China Demand — What BABA’s Earnings Signal Now

Alibaba’s latest quarter presented a split-screen: Cloud Intelligence reaccelerated on rising AI training and inference demand, while the China consumer backdrop stayed uneven and e-commerce competition remained intense. Reuters reported an overall revenue miss even as cloud revenue grew roughly 26% year over year, underlining a key inflection as AI workloads scale across enterprises. Investors are now weighing whether cloud’s momentum and potential monetization can offset domestic headwinds long enough to unlock a valuation re-rating. The ADRs reflected that debate, jumping to about $135 from roughly $120–$121 over prior sessions as headlines emphasized cloud growth and a strategic push into in-house AI chips to mitigate U.S. export constraints on advanced accelerators.

AlibabaBABACloud Intelligence+8 more

TSMC’s Premium: Parsing Taiwan Semiconductor’s Value Amid Policy Shifts, High Capex, and a Steepening Curve

Taiwan Semiconductor Manufacturing Company (TSMC) sits at the center of the AI compute supply chain. As of intraday Tuesday, its ADRs trade near $237.45, within sight of the 52‑week high at $248.28 and well above the $134.25 low, as investors balance 3nm/5nm leadership, a multi‑year capex program, and evolving policy risk. The macro backdrop remains supportive for capital‑intensive leaders: the effective federal funds rate has held at 4.33% throughout 2025, while the 10‑year Treasury yield is about 4.28% and the 2s10s curve has re‑steepened to roughly +55 bps (10Y 4.28% minus 2Y 3.73%). Ten‑year breakeven inflation is anchored near 2.41%, implying a proxy real 10‑year near 1.87%—a level that enforces valuation discipline but does not preclude premium multiples for cash‑generative cyclicals with durable moats, per FRED and U.S. Treasury data. Cross‑asset pricing corroborates that mix: SPY around $642.10, QQQ near $569.84, gold (GLD) near $310.92, long bonds (TLT) depressed near $86.56, and oil (USO) around $74.66, per Yahoo Finance.

TSMCsemiconductorsAI+9 more

AI Euphoria Meets Earnings Gravity: Will the AI Bubble Pop or Deflate Gracefully?

A week that began with a 26% collapse in C3.ai and a 20% drop in CoreWeave ended with the Nasdaq 100 flirting with record highs, underscoring the tension that now defines artificial intelligence investing. As of Friday’s close, the S&P 500 (SPY) finished at $645.31 and the Nasdaq 100 (QQQ) at $571.97, while Nvidia (NVDA) advanced to $177.99, per Yahoo Finance. The volatility backdrop eased, with the VIX at 14.22, also according to Yahoo Finance. The macro backdrop remains supportive: the 10-year Treasury yield sits at 4.26% and the 2-year at 3.68%, a positive 58-basis-point 10y–2y spread that marks a decisive exit from inversion, per U.S. Treasury data. The effective fed funds rate is 4.33% and unemployment is 4.2% (July), while real GDP is running near $30.33 trillion SAAR in Q2, according to FRED. That policy and liquidity cushion, however, is being tested by uneven AI monetization and timing risks. C3.ai’s CEO called preliminary sales “completely unacceptable,” while CoreWeave’s wider-than-expected loss hit sentiment ahead of its lock-up expiration even as it raised 2025 revenue guidance and highlighted a $30.1 billion backlog, CNBC reported. At the same time, cash-rich incumbents continue to execute: Cisco posted a narrow beat with strong AI infrastructure orders, and Foxconn reported a 27% profit jump as AI servers climbed to 41% of revenue, per CNBC. The result is a market where index-level optimism coexists with stock-specific air pockets—making backlog conversion, margins, and balance sheet strength the critical differentiators.

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Oracle’s AI Build-Out Has Rewired Its Valuation: What the Stock’s Surge Prices In—and What Must Still Be Proven

In the six weeks leading into August, Oracle’s share price climbed nearly 19%, closing at $250.05 on Friday, August 8, up from roughly $210 at the end of June, according to Yahoo Finance. The rally crested intraday at a fresh 52-week high of $260.87 on July 31, placing Oracle among the most visible beneficiaries of the market’s AI infrastructure trade. Behind the price action sits a striking capital expenditure cycle: free cash flow turned negative in the fiscal fourth quarter as Oracle accelerated data center build-outs tied to AI demand, SEC filings show for Q4 FY2025 (quarter ended May 31, 2025). That combination—rising price, rising capex, and the promise of AI-driven cloud growth—has transformed how investors value a software stalwart now trading as a capacity-constrained infrastructure provider in transition. Yet, the filings also reveal leverage, working-capital tightness, and margins that have not visibly expanded despite the hype, complicating the bull case. This article synthesizes recent filings, valuation metrics, and trading dynamics to examine what the market is discounting in Oracle’s AI growth story—and what still needs to show up in the numbers.

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Amazon’s Capex Supercycle Meets a Market with Questions: Big Profits, Thin Free Cash Flow, and a Stock Searching for Its Next Catalyst

Amazon’s latest report landed with a thud in the equity market even as the numbers dazzled on the income statement. Shares slid sharply in the sessions around the company’s Q2 FY2025 filing—down into the low $210s before stabilizing in the low $220s—despite Amazon posting $18.2 billion in quarterly net income on $167.7 billion of revenue, according to Financial Modeling Prep, citing SEC filings for the quarter ended June 30, 2025. The paradox is central: earnings are robust and margins have expanded, yet free cash flow is pinched as capital expenditures surge to fund a once-in-a-generation data center build. Investors now face a timing problem rather than a direction one. How long will this capital intensity last, and what does it mean for valuation? This article examines Amazon’s income statement quality, cash conversion, leverage, and stock behavior—synthesizing the filings with market data and key ratios—to map scenarios for the next leg.

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