Amazon’s<\/a> wasn’t higher. Microsoft touted its OpenAI investment and Amazon its Anthropic holdings. <\/p>\nThe iffy: Those private AI investments can help or hurt: Amazon’s net income fell despite soaring operating profits, as it didn’t repeat the pretax gain from its Anthropic investment that boosted earnings a year earlier. Microsoft’s OpenAI investment boosted its net income slightly, which lifted its profit growth. <\/p>\n
The takeaway: Check under the hood. Is any given hyperscaler’s earnings growth coming from private investments in AI labs, or is it due to their underlying business? <\/p>\n
Data: FactSet, company filings; Chart: Axios\/Matt Phillips <\/p>\n
Free cash flow <\/p>\n
The good: Sure, some of the most asset-light tech companies have turned free cash flow negative to fund their AI ambitions, but they say that’s because demand is outstripping supply! You want these businesses to keep investing in infrastructure to meet that demand and turn it into revenue. <\/p>\n
The bad: If there’s a hit to that demand, and these companies poured trillions into creating more supply, that’s, well, a recipe for a bit of a popped bubble situation. <\/p>\n
The takeaway: Watch the demand picture. Jeetu Patel, President and Chief Product Officer at Cisco, is bullish, but told Axios that a major cyber event that hits the core of AI demand could be a downside risk. <\/p>\n","protected":false},"excerpt":{"rendered":"The latest wave of hyperscaler earnings is spooking Wall Street. Bulls and bears alike have evidence to validate…\n","protected":false},"author":2,"featured_media":901988,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[5097,182,181,507,28,122,101,939,2993,2994,32455,2995,932,32456,20112,147,9323,1170,1666,6480,2996,2997,923,19533,3733,74,32457],"class_list":["post-901987","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-401k","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investment-tools","tag-investor","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-technology","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/901987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=901987"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/901987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/901988"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=901987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=901987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=901987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}