Investments and Portfolios

An incredible result from GOOG, $28B net income for a 13 week quarter. The stock has done well lately but there is still an overhang from sentiment that the company has anti trust issues and is spending too much on AI. I think these fears are materially overblown. GOOG reported its second-quarter 2025 earnings on 23 July 2025, showing robust financial performance driven by strong growth in Search, YouTube, and Cloud segments, underpinned by advancements in artificial intelligence (AI). Despite a significant increase in CapEx, the company exceeded analyst expectations, though investor sentiment was mixed due to concerns over rising expenditure (always!)and regulatory challenges.Key Financials (Q2 2025)Revenue: $96.43 billion, up 13.8% year-over-year (YoY), surpassing estimates of $94 billion. Revenue (ex-TAC-traffic acquisition cost): $81.2 billion, compared to expectations of $79.6 billion. Earnings Per Share (EPS): $2.31 (adjusted), a 22% YoY increase, beating estimates of $2.18. Net Income: $28.2 billion, up 19% YoY. Operating Income: $31.3 billion, up 14% YoY, with an operating margin of 32.4% (flat YoY despite legal settlement costs). Google Cloud Revenue: $13.62 billion, up 32% YoY, exceeding estimates of $13.11 billion. YouTube Advertising Revenue: $9.8 billion, up 13% YoY, slightly above estimates of $9.56 billion. Search Revenue: $54.1 billion, up 11% YoY, surpassing expectations of $52.7 billion. Traffic Acquisition Costs (TAC): $14.71 billion, in line with expectations. Conference call highlights AI-Driven Growth:Pichai emphasised that “AI is positively impacting every part of the business, driving strong momentum.” Search saw double-digit revenue growth, fuelled by AI features like AI Overviews (1.5 billion monthly users) and AI Mode (100 million monthly active users). Google’s Gemini AI model has grown to 450 million monthly users, reinforcing Alphabet’s competitive edge in AI against rivals like ChatGPT. Google Cloud’s 32% YoY revenue growth was driven by demand for AI infrastructure and generative AI solutions, with an annual revenue run-rate exceeding $50 billion. Capital Expenditure :Alphabet announced a $10 billion increase in its 2025 CapEx guidance, raising the total to $85 billion from $75 billion, reflecting strong demand for cloud and AI infrastructure. CFO Anat Ashkenazi noted that Q2 CapEx was $22.4 billion, significantly above estimates of $18.2 billion, primarily for servers and data centres(nice). The increase is driven by a “tight supply environment” for chips needed to train and run AI models. Ashkenazi highlighted that CapEx is expected to rise further in 2026 due to ongoing demand, but Alphabet is focused on efficient allocation to mitigate profitability concerns. A “highly rigorous process” ensures optimal use of resources. The increased CapEx raised investor concerns about near-term profitability(we can see profit headwinds NOT), as depreciation costs are expected to accelerate in 2025 due to prior and ongoing infrastructure investments. Positive Developments:Search: AI Overviews and AI Mode have boosted user engagement, enabling Alphabet to address more complex queries and maintain its dominance despite competition from AI-powered chatbots. Search revenue grew 11% YoY, outperforming expectations. YouTube: The platform’s ad revenue grew 13% YoY, driven by increased viewership on Connected TV and Shorts monetisation, which now matches or exceeds traditional in-stream ads in key markets. YouTube’s shift to television as its primary consumption medium is eroding traditional network market share. Google Cloud: The segment’s profitability improved, with an operating margin of 20.7% (up from 17.1% in Q1 2025), reflecting strong demand for AI and core cloud products. Subscriptions and Other Bets: Subscription platforms (YouTube, Google One) grew 19% YoY to $10.4 billion, with 270 million paid subscribers globally. Waymo, Alphabet’s autonomous vehicle unit, is scaling, serving over 150,000 paid rides weekly. Talent and Innovation: Pichai downplayed concerns about AI talent wars, stating that retention and new talent acquisition metrics remain “healthy.” The company continues to innovate rapidly, with over 1,000 new cloud products and features launched in the past eight months. After an initial soft after hours reaction, the stock rose a few dollars and futures are up nicely overall.

From JP Morgan: AMZN has grown its Advertising Services revenue from ~$13B in 2019 to ~$56B in 2024, implying a +39% CAGR. The success of Amazon’s Advertising Services business highlights key advantages AMZN & retailers have over GOOGL & META. According to WSJ, AMZN has deployed more than one million robots in facilities, which is the most it has ever had and near the count of human workers at the facilities.

Colossus-2 expansion to 1 million GPUs gets closer....... xAI is raising $25 billion, comprising $5 billion in debt through Morgan Stanley (a term loan B, fixed-rate term loan, and senior secured notes) to fund the Colossus supercomputer with commitments due by June 17, 2025. Additionally, xAI is seeking $20 billion in equity at a valuation between $120 billion and $200 billion to support its growth.

Interesting update which is a big positive for companies like Oracle. 'You can have our tech if we manage it' -seems to be a link to Stagate/open AI for countries. Quoted from a news wire below New AI Diffusion Rule is COMING SOON and New Version Will Let Allies Buy US Chips With Conditions The Commerce Department is drafting a replacement for its recently repealed AI diffusion rule to ensure the new controls don’t impede U.S. exports to allies, Commerce Secretary Howard Lutnick said June 4. “Our view is we are going to allow our allies to buy AI chips provided they’re run by an approved American data center operator and the cloud that touches that data center is an approved American operator, so we control it while it’s over there,” Lutnick testified before the Senate Appropriations Subcommittee on Commerce, Justice and Science. The rule that was rescinded last month (see 2505130018) was “very confusing,” Lutnick said. “For example, the prime minister of Poland hunted me down and said, ‘What did I ever do to you that you have me as a Tier 3’ country, the most stringent of three tiers? ‘I’m part of Europe -- what are you doing?’ It was illogical. It was hastily rushed through at the very end of the Biden administration.” He expects Commerce will release the new AI diffusion rule soon. “I can’t say with more specificity but pretty soon,” he said.

The previously posted tables containing predicted min Blackwell (packaged) chips has proven very accurate in fact we also said TSMC would likely find additional capacity(and apparently they have). And from that we forecast the revenue growth, knowing what they sell these chips for. The start of Blackwell was clunky due to the transition from Hopper because Hopper was packaged on the 'S' line and Blackwell on the 'L' line and there were some heating issues which is no surprise because it was all very new. We predicted about $10 billion Q o Q growth vs $4-5B during Hoppers reign. We are now at this point today. Blackwell is bug free and at ramping as fast as CoWoS will allow. This is the old schedule by quarter in 000's: [image: 1748798151117-screenshot-2025-06-01-at-18.14.59.png] . TSMC have indicated circa 500k chips per month and growing from June. They are all sold(5-10X). Losing China completely, and it wont be but let's just ignore it all together. All that has happened is we take the hit and next quarter they achieve $47B and the next $57, $67, $77 and so on. The only caveat is that when Rubin arrives at year end, Dec/Jan they will add further revenue to each quarter simply due to the ASP of Rubin being higher-so id expect $12-$13B q o q increases. Next year automotive will be meaningful as all car makers equip their cars with ADAS and robotics/omniverse will start adding revenues-the q o q rhythm will grow again. But this is exactly how I see their revenue grow over time. A very long time and yes I expect 100B+ per quarter some time at the end of next year or Q1 the following. And to anyone who thinks they will have transition issues again, well, Rubin and Rubin Ultra are all packaged on the same line so the transition will be seamless . It is not until 2027 that packaging will move to a new process called Sow-X which is when the real party starts. We are looking at racks 40X more powerful than today's. Racks containing 500 chips and consuming 1 megawatt each and could cost $20M or more. This is the roadmap from 2027 to 29. The experts have been predicting a plateau in revenue for over a year now-remember Cathy Wood and the 'Dean of Valuation'. They were all wrong and continue to be so. Cisco-look at Cisco. A very scientific analogy. Exciting times ahead imo.

The stock doesn’t fit out criteria and moving 100% in a day doesn’t make it attractive. Odds are it will fade over the coming weeks. It’s very small, no track record, loses money and will be extremely volatile. And to add something you have to make a call on what to sell. That’s not to say it can’t go higher.

Morning, Air time is driven by: Weight or our position vs the market position. We were contrarians with SMCI (still are). SMCI drives a lot of opinion! The significance of the company vs the sector Companies driving change/innovation (driving news) My personal interests-and what I think others find interesting-esoteric sectors Cobens has 20k clients and we managed 3X more assets than IM before the rescue I appreciate that we talk about Tech a lot and a couple of holdings in particular. The fact is Nvidia drives/is a barometer of the wider sector(and the market) and what is good/bad for Nvidia impacts other big names.

Hi D, Netflix is set to drop its Q1 2025 earnings after the market shuts on 17 April. Analysts expect earnings per share (EPS) will hit $5.74, up 8.7% from $5.28 last year, with revenue expected at $10.54 billion, a 12.5% jump year-on-year. That’s pretty close to Netflix’s own forecast of $10.46 billion in revenue and an operating margin of 28.2%. They’ve got a history of smashing EPS forecasts, beating expectations in all four of the last reported quarters, like Q4 2024 when they pulled off $4.27 against $4.20 expected. That said, it's hard to know but their numbers should be solid. Everyone’s eyeing their ad-supported memberships, which made up 55% of sign-ups in ad markets last quarter, and their content line-up, with several content hits. They won’t disclose subscriber numbers anymore, focusing on revenue and margins instead.

Here is a complete list of ALL notable Robotics players. See the common thread? [image: 1744622289650-screenshot-2025-04-14-at-10.15.51.png]

SK hynix raises its 2025 CAPEX from $15 billion to $19 billion. SK Hynix has decided to increase its planned CAPEX this year by 30% due to the surge in demand for high-bandwidth memory (HBM), which was already high. The chipmaker initially planned to spend 22 trillion won this year in expanding its facilities but this has been upped to 29 trillion won, sources said. The decision was recently finalised and SK Hynix has also sent memos to suppliers to deliver the equipment to the M15X fab in Chungju by October, two months faster than initially planned. These moves are all responses from its customers requesting SK Hynix deliver more HBM chips faster. The company’s main customer is Nvidia, which is using HBM with its AI accelerators. The GPU giant is requesting SK Hynix deliver HBM faster than planned. SK Hynix will also be supplying HBMs to Broadcom starting this year. We are reading the room, folks. Demand is off the hook and I would speculate, supply is also improving. Whilst the market is distracted by and shunning everything due to tariffs speculation, these businesses are clearly articulating a shift.

Here is the compute comparison. One rack = the entire DC. The DC cost 3b usd to build and 150m annually to operate excluding the land/lease The single rack costs 30m and 12m to operate annually. Could live in a broom closet [image: 1742381904418-screen-shot-2025-03-19-at-10.52.08.png]

We will be making two changes to the portfolios next week(2 new stocks)-not sure of exact timing. Treat this as aheads up of an impending rebalance across Lifestyle/Tech

Great to hear Ron. That portfolio has been very productive. I’m very proud of it and very pleased for anyone who put their hard earned money into it.

Thanks for the replies and sorry I missed your call earlier Adam. I'll give you a bell in the morning. Cheers all, have a good evening.

Over 50% of the value of the company is AWS-maybe 65% AWS generates approx 28.7b and earns 10.5(quarter) Azure generates about 24.5b(less than AWS) but also earns 10.5b Similar money makers similar growth. Msft earns significantly more money overall-circa 50%+ more.

The drug cost > $1B to develop so the price (in the US $3.1M) needs to recover this cost and make a profit. Sickle Cell disease is a terrible illness(genetic) often leading to poor quality of life and shortened life expectancy . Many who suffer from it have regular hospitalisation so you need to factor in the large cost over a number of years vs the upfront cost now coupled with the pain and suffering. The reality is, you've read the headline. They will probably only process a handful of patients a year-there will be a budget. Vertex is not like most drug companies. Their charter is to work in the field of transformative medicines. Medicines that improve healthcare outcomes through discovery and technology. The hard stuff.

Just to add to Adams description and detail, the name is an indicator of your intention for access to the funds. If you intend to take it all, or a big chunk at a given date in the future, you may choose withdrawal, as you intend to withdraw the funds, and so we progress to a defensive position to stabilise the funds ready for withdrawal. If you intend to access the funds in chunks over time or draw an income, then you may chose income. In this case we look to stabilise a proportion of the funds ready for you to draw as income while allowing the rest to continue to seek growth ready to be accessed at a later date

Hi, Our MM product is very short duration, something like 30 days or less on average so yes. The choppy US market is due to their economy being too strong for the feds liking, as it relates to labour markets and the effect on inflation. We are not talking raging inflation either, just a bit higher than ideal. Corporate earnings have never been better. Interest rates are not even that high. We aren't going back to Covid rates nor have higher rates had any real impact on company earnings.