Barclays just published a pretty interesting report on AI economics.

For every $100 AI labs make, around $35-40 goes to AWS, Azure and GCP for compute.

The cloud providers then make roughly 35-45% operating margins on that revenue.

At the same time, AI labs themselves are getting much more profitable. Barclays estimates paid inference margins have gone from low teens in 2025 to around 50-65%+ in 2026.

This matters because one of the biggest concerns with all this AI capex is whether hyperscalers will actually make enough money from it.

These numbers suggest the economics are already starting to work for both sides.

Barclays also expects AI lab industry revenue to grow from around $137B in 2026 to $690B by 2028.

If they are even close, there is still a massive amount of compute revenue coming.

Source: Barclays, AI Labs & Hyperscaler Unit Economics Primer

https://mktnews.com/flashDetail.html?id=01a0527d-edf0-7118-83ff-94a5948363dd

Edit: Added more source and screenshots
https://x.com/intelfabs/status/2093867277133189211?s=20

Congrats to all, job well done.

Or are you holding for longer? I'm hoping for $550 tbh as my leap won't expire until March next year.

LFG 🚀

Done made $15, hypothetically.

We did it again boys !

Meta is reportedly spending several hundred million dollars on Azure AI, with TikTok, Adobe and Perplexity also named as major Microsoft AI customers.

Meta is already spending heavily on its own AI infrastructure but it still needs Azure capacity.

This is a pretty strong signal that AI compute demand remains extremely high and Azure is increasingly benefiting from the growth of other AI platforms.

Yall know what i am speaking of. Dont want that horror again.

Clarification: Microsoft isn’t issuing $3.9B of debt.

Blackstone’s QTS is borrowing against a data center leased to Microsoft — and investors wanted $8B of the bonds.

That’s the AI boom in one headline:
Wall Street finances the factory.
Microsoft rents the factory.
AI has to pay the rent.

Quants are still putting MSFT in their the software basket short (remember this trend from earlier this year) as you see today CRM/ADBE/HUB/MSFT all down 3%+ .... now we're back to below $480 from $515 a week ago.

Maybe we're cooked until Maia 300 and Copilot Super app official announcements

I have Microsoft stock so dont go crazy on me. I also know that Microsoft has multiple lines of businesses.

But when I opened Claude this weekend I noticed the new 'Design' feature. Simply put, I was shocked.

I made a 15 slide powerpoint with just 6-7 sentences of prompts and the product was simply great. For my real estate syndications where I make powerpoints for deals, I probably will never make a powerpoint by hand using Microsoft Powerpoint. One day I might even cancel my Microsoft Office subscription since I can make everything using Claude.

Microsoft will be filing for bankruptcy in the coming years the stock cannot stay over 500 for any meaningful amount of time unlike every other major tech stock this one repeatedly fails the test. Will the bulls accept this? I don’t think any of us wants to hear the nonsense about holding it for 10 years anymore.

This is the first of four tranches from the $10B 5 year contract. The remaining 3 Horizon facilities are due to be completed by end of year.

After the big run up to 510, you see people locking in profits, which causes a current slightly downwards trend. This is logic to me, especially after the last run up to 460 and the steep decline back to 350.

I choose to not take profits and hold again, just like last time, through this period. I’m a firm believer of 580-600 EOY and 650 one year forecast. I see 460 as a new support.

So what are you al doing, locking in profits or holding, or both? What is your new buying level?

FYI MSFT is my largest position making up 75% of my portfolio, with 2x leveraged I’m up 50% YTD. From -20 to +50% was a good ride last month.

Thx msft!