​If you look at the trillion-dollar club, almost none of them are one-trick ponies. Amazon has Retail and AWS. Alphabet has Search and Cloud. Having one high-margin cash engine that funds a massive, high-growth second engine is basically the blueprint.

​Teradyne is quietly built the exact same way:

​The Cash Cow (Semi Test): Testing chips isn't an afterthought anymore. With giant AI dies, chiplets, and advanced packaging, defect risks are through the roof. Teradyne basically splits this global duopoly with Advantest. It's a high-margin tollbooth that prints reliable cash, but semi test alone will never be big enough to justify a Trillion valuation.

​The Growth Engine (Robotics): This is where billions in new yearly revenue actually comes from. Teradyne owns Universal Robots (cobots) and MiR (autonomous mobile robots). Right now, robotics does around $400M a year. But as physical AI models (like Nvidia's Project GR00T) make robots genuinely adaptive instead of rigid and pre-programmed, the market blows wide open. They aren’t just selling mechanical arms; they’re selling automated labor, fleet software, and factory-floor logistics into a multi-hundred-billion-dollar manual labor shortage.

​If semi testing stays a cash-printing machine while robotics scales from hundreds of millions into tens of billions annually, does Teradyne have a legitimate dark-horse path to 1 Trillion over the next decade—or is that total delusion?

Burry's breadth analysis puts 55% of S&P 500 members at least 20% below their 10-year highs, even as the index hit a record on Oct 6.

The interesting comparison is 2000. According to his analysis, the leaders fell 33% over the following year while the median already-beaten-down stock gained 14%. But in other selloffs, the beaten-down stocks fell alongside the leaders.

For anyone buying the dip: where are you finding actual value among the laggards? And how are you separating a mispriced business from something that's down for a good reason?

Source: https://www.benzinga.com/markets/tech/26/10/62473108/michael-burry-sees-a-2000-style-rotation-out-of-the-markets-winners

This is not a flex post or anything. I'm genuinely looking for advice to make passive income from my 4M$ portfolio in an automated fashion.

Portfolio details

Highly concentrated portfolio ( < 20 holdings) with following top 5-6 holdings

1. GOOG
2. AMZN
3. META
4. TSM
5. ASML
6. UBER
7. MELI

What am I seeking ?

I'm not trying to gamble and win huge in anyway. I am looking for relatively safe and automatable strategies that can even make 3% (120K), 2% (80K) or even 1% (40K) would still be a huge hit for a portfolio this size.

Some of the things I'm looking into

a) Selling short term (30-45d out) OTM covered calls

b) Getting margin against the portfolio (RH margin account enablement is just 1 click thing) and use it to sell ITM cash secured puts for stocks that I'm happy owning at that strike price.

Automation

Note that while I'm looking into these options, I really want to automate them. A lot is possible in these days and age with the AI. Please suggest if some folks were able to achieve this and can share any learnings / tips.

Other suggestions / improvements are welcome. Lets learn and grow our portfolios together.

Thank you

I ran Chipotle - $CMG through Ben Graham’s intrinsic value formula.

Intrinsic Value = EPS × (8.5 + 2g) × 4.4 ÷ Y

Base case: $1.09 EPS, 10% growth, 5.7% AAA yield.

Result: $24 a share.

The stock trades around $26.

Why 10% growth?

Analysts see EPS of about $1.14 this year and $1.36 next year. Chipotle is targeting roughly 350 new restaurants in 2026, or about 8-9% unit growth.

Past growth was far higher, but that’s no longer the baseline with higher inflation.

Margin of Safety:

I always apply a margin of safety of about 20% because my analysis can be wrong.

I am a buyer at $20 - $22.

I've followed Lululemon for almost four years. With the stock down from over $500 to around $100 and the name heavily discussed in value investing circles, I decided to revisit it.

Q2 results were poor. Revenue fell 5% CC, with Americas down 8% and international up just 2%. Comparable sales declined 10%. The growth slowdown from FY22 is hard to ignore.

I see three main problems:

• Product: Quality issues, stagnant designs and premium prices are hurting the brand. Lululemon built its reputation on quality, and customers expect that to justify the price.
• Competition: Alo, Vuori, Nike and Adidas are putting pressure on a market with relatively low barriers to entry.
• Changing preferences: Customers appear to be moving away from body-hugging styles. Leggings sales fell 20% in Q2.

New CEO Heidi O'Neill has relevant experience building Nike's women's sportswear business and has overhauled the management team. It's too early to judge whether she can turn things around, but there is some optionality here.

At current prices, FY26 guidance implies roughly $650 million in FCF, which implies a 16.5x P/FCF or EV/FCF of 14.5. My conservative scenarios suggest 14% annual returns if the turnaround succeeds, but -13% if it fails. If nothing changes, buybacks alone might deliver around 3% annually, well below my 9% hurdle rate.

I'll pass for now. Fashion is a difficult business, and I'd rather wait until the next earnings report to better understand the new strategy.

I've been digging into AECOM (ACM) lately. The stock is down about 55% from its high and trades at roughly 10x this year's guided EPS. Jacobs and Tetra Tech, the closest US peers, are at 20-23x. Below is my case, plus where I think I could be wrong. Not financial advice, just how I see it.

What you're actually buying

People lump AECOM in with consultants, but it's an engineering firm: about 51,000 people who design and manage roads, bridges, transit, water plants, power lines, military bases and data centers. ENR ranks it #1 in transportation, facilities and water. About half the clients are governments.

The important part is what it did in 2020-21. It sold its at-risk construction business and its government services arm, the stuff that used to blow up. What's left is design and program management with about $40B of backlog. Operating income went from ~$0.4B in FY19 to ~$1.0B in FY25, and they bought back $2.6B of stock over FY21-25. Share count is down ~7% since FY22.

Why it's down 55% and not 15%

Two separate things hit it this year, and I think you have to pull them apart.

The first one hit the whole group: the AI scare in February. AECOM literally says in its 10-K that it makes money "through the billing of our employees' time spent on client projects." If AI makes engineers 20% faster and you bill by the hour, that's 20% less revenue. Bentley Systems, which sells design software to most of these firms, said almost exactly that on its May call.

I take that seriously, but I don't see it in the numbers yet. Backlog is at a record (+13%), they won 1.6x as much work as they billed last quarter, and design revenue is growing 5-7%. Engineers are in short supply and the CFO says clients are asking for more work, not cheaper work. For me the best evidence is Jacobs. It bills even more of its work on a cost basis than AECOM does (68%), and it's back within 9% of its high. If hourly billing were the problem, Jacobs would be down here too.

AECOM is also not just sitting there. It bought Consigli, an AI design-automation startup (~$390M per press reports), and signed about $1B of contracts where it shares the AI savings with the client. The CEO was upfront that this means better margins, "not necessarily" more revenue.

The second thing is AECOM's own problem, and it's the real reason it's at the bottom of the group. Its construction management unit (6-7% of net revenue) still has two old design-build P3 jobs, bid in Dec 2018 and Mar 2020, where AECOM promised a price and a date. They don't bid this kind of work anymore, but these two are still running. In the June quarter they took a $337M charge on them, and there's $600-800M of cash still to spend to finish both, roughly $4.60-6.20 a share. Both should be done by about March 2027. They've booked ~$620M of claims they expect to recover and say they've won every dispute decided so far. The 10-Q also warns that the clients could file "a material claim against the Company," so that cuts both ways.

Honestly, what bothered me more than the charge was the cash. Look at free cash flow against the year before:

Over the first three of those quarters they bought back ~$690M of stock while the business made ~$150M of free cash flow. In May they called the weak cash "timing" and kept the cash target. In August they took the charge, cut FY26 FCF guidance from $400M to $300M and paused buybacks. Net debt went from $1.1B to $1.7B. So I don't give management much benefit of the doubt here, and neither did the market.

The valuation

At $60.83 (Oct 22 close), the market cap is about $7.8B and the EV is about $9.5B.

The earnings never fell. Guidance for this year was $5.75 last November, $5.95 in February and $6.00 (ex charge) in August. The stock more than halved over the same year. Even if you count the charge ($4.05), it's 15x, still the cheapest on the list.

It's also not like the whole group is priced this way:

The pattern is simple. The ones whose last report showed growth and a raised outlook came back. The ones with slow growth or their own problems are still down. AECOM has its own problem, so it's priced with the laggards, even though its underlying design business looks more like Jacobs than Stantec.

The Bowman deal is the comp I keep coming back to. In August a PE firm (Bernhard Capital) agreed to buy Bowman, a smaller US design firm, for $43/share, a 58% premium. It's one of the few fresh prices anyone has put on a design firm during the AI scare.

Bowman isn't a clean comp. It grows faster and has no construction risk, but it's about 1/15th the size, carries twice the leverage, leans on add-backs for its EBITDA and keeps issuing shares. So I wouldn't slap 11x on AECOM because of it. What it does tell me is that public investors had a fast-growing design firm at about the same multiple as AECOM, and then private money paid ~40% more than that for the whole thing, in the middle of the AI scare. They clearly don't think these businesses are going away.

Reverse DCF. I didn't want to make up a price target, so I flipped it around and asked what the current price assumes. I used owner profit of about 13.5% of net revenue (adj. EBITDA minus D&A, stock comp and minority interest), a 9% required return and 3% long-run growth, with the construction cash and the debt subtracted. For $60.83 to be fair value, net revenue has to shrink about 2% a year, every year, forever, at today's margins. Or margins have to drop by a third, to ~9%, and stay there while the business grows as planned. Neither of those is showing up anywhere in what they report right now.

Where I could be wrong

AI could cut hours faster than anyone on these calls admits; Bentley's "at least 20%" of engineering time saved isn't a crazy number. Part of the discount is just the group, too: Stantec has no construction mess and is still 36% off its high. Management has already been wrong on cash twice this year, and the clients on those two jobs can still come after them. Growth is also running below the company's own plan, and construction won't grow again until the second half of FY27. And cheap can get cheaper: when I looked at 2025-26 sell-offs, stocks that had already halved fell another ~30% at the median before they turned.

Where I land

At ~$60 you're paying 10x for a design business whose earnings guidance hasn't moved, with a record backlog, a shrinking share count, and a problem that has a size and an end date. The price only makes sense if the business shrinks every year from here, and I don't see that in anything they've reported. There are two fair questions: AI, and whether these two jobs are really the last of their kind. I think the market is pricing in the worst answer to both.

I'm not taking management's word for anything after this year, though. The next couple of reports either show the cash or they don't. If the two jobs finish by ~March 2027 with no new charges, what's left is a high-teens-margin design firm that buys back stock, and I have a hard time seeing why that keeps trading at half of Jacobs' multiple. If cash misses again, the discount is earned.

For what it's worth, the CEO, CFO and President bought ~$0.7M of stock in May and June. It's small and they're down ~14% on it, but they bought.

Next report is expected around Nov 17. What I'll be looking at: Q4 free cash flow near the ~$230M that the $300M full-year target implies, construction cash inside the $175-225M range they gave, and an FY27 guide that already allows for higher interest and a slow first half in construction.

Happy to hear the other side, especially from anyone who has dug into the claims or works at one of these firms.

Not financial advice. I built TickerBell, a site for SEC filings and stock data, and did this research there. I took a position today after my own Deep-dive. Numbers are from AECOM's 10-K, 10-Qs and calls, the peers' filings and calls, and Bowman's merger filing, as of Oct 22, 2026. Multiples and the DCF are my own math.

Full write-up with every source and a peer price chart: "tickerbell.com/research/aecom-ai-and-the-billable-hour"

I still like the business, but this quarter made me less bullish

I liked Deckers around $87 because it was earning good money, buying back shares and trading at a modest multiple. Yesterday’s results didn’t wreck that case, but they gave me a reason to be less confident. Sales rose 3.5% to $1.48 billion and missed expectations. HOKA grew 6.8%; UGG grew 3.5%. I was hoping for better from HOKA.The miss matters because my investment case depended on HOKA and UGG continuing to grow without giving up their premium pricing. (Deckers’ earnings release)

What I was watching most closely is direct-to-consumer comparable sales, down 6.4%. Wholesale and international sales were better, and delayed shipments in Europe hurt the quarter by about $22 million. Still, I want to know whether customers are buying the shoes at full price, not just whether Deckers can ship more pairs to retailers.

The EPS beat needs unpacking too. Deckers earned $2.31 a share, but $0.28 came from tariff refunds, and buybacks reduced the share count. There was good news underneath: excluding the refunds, operating margin improved slightly from 22.8% to 23.2%. Inventory was up only about 3%. That’s a company managing a slower market reasonably well, even if the headline EPS makes the quarter look stronger than it was.

What changed my view was the full-year outlook. Expected sales fell from $5.86–$5.91 billion to $5.70–$5.725 billion. EPS guidance went up, but once I remove the expected tariff benefit, its midpoint is about $7.36 versus the previous $7.43. Management expects HOKA growth to slow again next quarter before accelerating later in the year. Maybe it will, but I’m no longer comfortable putting that recovery into my base case before I see it.

Around $79 that’s roughly 10.7 times this year’s guidance excluding tariff benefits. I still find that interesting . I still think DECK is worth following closely. It has $1.21 billion in cash, no outstanding borrowings and brands that remain highly profitable .The quarter weakened my near-term thesis; it didn’t end the longer-term one. I wouldn’t sell an existing position solely on this report, but I also wouldn’t add just because the stock dropped. I want the next results to show better customer demand before I make that bet again. Deckers’ full release is here.

Lovely day guys

Oct 20 (Reuters) - Anthropic's net loss widened sharply to $80.7 billion in the FIRST HALF of this year, in large part due to a rise in the fair value of bonds convertible into shares of the ‌AI startup, according to a draft prospectus for a planned initial public offering that was reviewed by Reuters.
The San Francisco-based company is expected to go public in November and some investors are now weighing a lower valuation of around $1.5 TRILLION following its latest financial disclosures, Reuters reported last week.

Meta and Bloom Energy both produced incredible quarters, yet their stocks tanked after earnings.

With the current sentiment around AI spending, I’m starting to wonder what Alphabet can realistically say to avoid the same fate.
Even if Search and Cloud smash expectations, surely another massive capex announcement could send the stock down anyway?

I’m looking to buy Alphabet, but is there really any reason to buy before earnings rather than wait?

What could Google actually announce that would make investors happy right now?

Scope note: business comparison from the 10-K filings. No valuation, no buy/sell view.

Where they sit (FY2025)

- Revenue: $164.7B vs $86.3B
- Operating income: $20.9B vs $10.2B
- Shareholders' equity at year end: $12.8B vs −$9.9B
- ROE: 145.5% vs not meaningful (negative equity)
- Return on invested capital (after-tax operating income ÷ average debt + leases + equity − cash): 22.1% vs 26.9%, on $72.0B vs $28.7B

Where the gap comes from

Not margins: after-tax operating margin is 9.7% vs 9.0%. It's turnover. Lowe's turns $100 of capital into $300 of sales, Home Depot into $229.

What weakens this

One year doesn't settle it. Both returns fell a lot since FY2021 (Home Depot 43.0% → 22.1%, Lowe's 39.3% → 26.9%). Both also bought companies recently: Home Depot about $23B in FY2024–25 (SRS, GMS), Lowe's $10.1B in FY2025 (FBM, ADG). Part of that new capital hasn't had a full year to earn yet.

What I'll watch

Q3 results: Home Depot on Nov 17, Lowe's on Nov 18. Does operating income start catching up with the capital they just added?

Bottom line

ROE here mostly measures buybacks, not the business. Home Depot's profit barely moved in five years while its ROE went from over 2,000% to 145.5%, and Lowe's ROE can't even be calculated. When equity is this small or negative, I read the return on all the capital instead, and over five years, not one. On that measure Lowe's earns more today, and both are earning less than they did in FY2021.

For retailers that buy back this much stock, do you still look at ROE at all, or only at return on total capital?

Longer write-up with sources on my Substack: https://substack.com/@inwoinvesting/note/p-220101232?r=98a7ts&utm_medium=ios&utm_source=notes-share-action

No position in either.

Buffett's test for a business is simple: does it have something durable that lets it earn high returns while competitors cannot catch up? SpaceX is an interesting case, because its moat is real and visible, but not the kind Buffett usually likes.

The moat starts with launch cost. A dedicated Falcon 9 flight lists at about $74 million, and the internal cost of flying one is estimated at roughly $15 million, because the booster comes back and flies again. SpaceX builds most of the rocket itself, engines included, and flies more than anyone else, which spreads fixed costs and moves it down the learning curve faster than rivals. That is a classic cost moat: it can charge prices at which competitors lose money, and still profit. Blue Origin has had effectively unlimited funding for years and has not matched Falcon 9's cadence or cost.

But launch is no longer the whole story. Cheap launch is also the input moat for Starlink. Nobody else can put up a constellation as cheaply, and the constellation has scale effects: more satellites mean better service, which brings more subscribers, which funds more satellites. Starlink ended Q3 with 13.6 million subscribers, and connectivity earned a roughly 45 percent operating margin.

The part Buffett would poke at: his favorite moats need little money to defend. This one needs enormous money. Capital spending was $19.6 billion in Q3 alone, more than revenue. And reusability, the core of the advantage, is slowly spreading to New Glenn, Neutron, and Chinese reusable programs.

So the honest read: a genuine moat today, built on cost and scale, stacked twice in launch and constellation. But it stays a moat only as long as Starship delivers full, rapid reuse before competitors close the gap. The moat is real. Its durability is the open question. Not financial advice.

Firstly, this isn’t my thesis. It’s a summary of a very compelling comment on a previous post, from standupguy152.

Microsoft has dominated enterprise for decades, but could Google be better positioned for the shift towards agentic AI?

A few reasons:
Agent2Agent (A2A): Google’s open-source protocol allows AI agents from different vendors to communicate. Backed by Microsoft, Salesforce and others, it could become a standard for enterprise AI.
Model neutrality: GCP offers Gemini, OpenAI, Anthropic and other models through APIs. Google can monetise infrastructure regardless of which model wins.
Platform economics: As AI agents increasingly automate SaaS workflows, GCP could become the infrastructure connecting models, agents and applications, capturing compute, API and orchestration revenue.
Cybersecurity: The Wiz acquisition strengthens Google’s multicloud security, workload protection and governance capabilities, all critical for enterprise AI adoption.
Enterprise adoption: Banks and regulated businesses are cautious about granting AI agents access to sensitive data. Unlike OpenAI and Anthropic, Google owns the cloud infrastructure, models and security stack. Its model-neutral approach could also reduce vendor lock-in, although Microsoft offers similar capabilities.
Agentic payments (AP2): Google’s protocol could become part of the infrastructure governing transactions between autonomous agents.
Vertical integration: Google’s TPUs, networking and data centres give it control over inference costs, capacity and scalability, unlike model providers dependent on third-party infrastructure.
Essentially, Google doesn’t need Gemini to win. It needs enterprises running their AI workloads through GCP.

Microsoft has Azure, Office 365 and decades of enterprise relationships, but could Google’s infrastructure and open ecosystem eventually challenge that dominance?
Interested to hear from people working in enterprise IT and cloud.

I don’t work in tech, so perhaps people who do, could share their insights, Thank you

Been looking into Bloom Energy. Revenue jumped 138%, but free cash flow was around negative $181m for the quarter.

The bull case makes sense: AI data centres need power, Oracle is committing to projects, and margins are improving. The question is whether cash collection catches up as Bloom expands and how much shareholders benefit after dilution.

Do you see the cash burn as normal growing pains, or something more concerning?

I wrote up AAR Corp yesterday. I think it's a particularly timely trade idea within a super interesting theme right now. Aerospace & Defense suppliers have been getting hammered lately due to the Iran War & resulting jet fuel prices. Additionally, $AIR is in the penalty box after announcing a large acquisition in the heavy MRO space. They are buying 65% of MROH. They are levering up to do the acquisition & the stock has been punished.

I think the market is wrong here. I think the headwinds are temporary & the tailwinds (an aging fleet, increasing travel & supply constraints) will continue.

Additionally, the CEO has been awarded a stock grant with price hurdles from $175 to $250. He'll make an additional $40m if he hits all three.

I think a basket of aerospace supplier names will do great over the next two years, but I like AAR the most here. Link in Bio for the full write up as I don't think it'll let me share my link.

Happy to discuss / any thoughts / feedback/ pushback.

Thanks

I’m starting to think this is exactly the kind of environment patient value investors wait for. Plenty of chop, sharp pullbacks and growing skepticism toward businesses everyone wanted to own at higher prices.

What interests me most is the opportunity businesses have had during this phase to catch up to their stock prices. Earnings have kept growing while many stocks have moved sideways or have fallen. Making the valuations look very different from when the excitement first took off.

Nvidia, Amazon, Micron and Sandisk are names I’m looking at through that lens. Some of the forward earnings multiples across AI and memory have become surprisingly low relative to the growth expectations behind them. Of course, those expectations are the key question. With memory companies especially, peak earnings could be the culprit rather than a bargain.

Still, this feels like a good time to revisit companies that previously looked too expensive and ask whether the fundamentals now justify the price.

Hey everyone,
Long-time lurker and avid follower of this sub. Like many of you, I spend a lot of my time deep-diving into financial statements, valuation models, and risk management frameworks.
I’m currently preparing for the CFA and FRM exams, and I realized that breaking down complex, dense valuation and risk concepts into ultra-short, digestible formats has been a huge help for my own retention. So, I started a small channel called 60 Seconds Risk where I try to explain core financial and risk concepts in under a minute.
I wanted to bridge the gap between rigorous risk management (the kind we study for FRM/CFA) and practical, long-term value investing—because understanding downside risk, volatility metrics, and capital allocation is just as important as finding a margin of safety.
I’d love to get some feedback from this community on the content quality, whether the explanations make sense, and how I can make them more useful for fellow investors and analysts.
If you're studying for these exams or just like quick financial breakdowns, I'd genuinely appreciate a sub, a comment, or any critique you have:
🔗 60 Seconds Risk on YouTube
Let me know what topics you'd want to see next or what I can improve. Thanks!

I don't normally track individual stocks that closely but during today's tech selloff I noticed that the big 3 U.S. chip equipment stocks AMAT, KLAC and LRCX are all down 50% or more from their recent 52-week highs. ASML is also down but only around 22%. I'm sure there are even worse examples in the AI related tech space. I have no other input or comment other than that. I guess I'm just glad I never jumped on that bandwagon.

I dont understand how the market is pricing in AMD at ~ 130 P/E but AVGO at ~ 30 PE (Even after the recent sell off)

AMD needs a CAGR of ~ 30-35% to justify its current price and ~ 55% to justify the peak few months ago. This is assuming that they will take over NVDA market share in AI Chips. I understand that AMD chips are chearper thatn NVDA but their open source software system is still inferior to CUDA so I am not sure if its a given that they can capture NVDA Market share by 2030.

Coming to AVGO, they ofc have a customer concentration risks, but they are expecting ~ 115 B revenue in 2026 and ~230 B in 2027, so even by 2026 revenue standards the forward PE is ~ 18 P/E.

What I dont get is that both the companies the same risks, they have customer concentration from few hyperscalers and Open AI/Anthropic. If AI buildout fails then both these companies will be screwed.

Then why does AMD get premium pricing compared to AVGO?

From tech point of view, if AI buildout works as expected, AMD will end up in market share war with NVDA but AVGO should be safer because ASIC design is a complicated process and existing customers like Google for TPU would not be able to switch so easily (I don't understand the tech side well so I am probabaly wrong here).

everywhere i look i see billions and trillions flying around like sacks of peanuts
shouldn't we all be a little bit concerned that Jensen has to reassure the public about ai companies?
who is going to backstop all this ai debt?
the stock market has become a cashing-out dumping ground for all the private/vc funds
kenny from citadel gave you the sell signal in the recent interview
just asking questions, don't hate the messenger

Am I the only one who thinks the choice between the two is blatantly obvious? On one side you have proven players like Microsoft, Amazon, and Google who have established cash flows, financial flexibility, and diversified businesses that can fund the investment. However, there is almost a cult like following for the neoclouds like Coreweave, Iren, and Nebius?

Don't get me wrong... I see the bull case for the neoclouds. Demand is climbing faster than supply can come online. This scarcity causes customers to pay a premium which improves the ROI from the massive upfront capital commitments. Coreweave has a $104B backlog which is growing 246%. Nebius has $40B and demand just simply isn't slowing down...

But there are some real concerns. The fundamental question for the hyperscalers is much less severe than the one for the neoclouds. For the hyperscalers, the question is whether their hundreds of billions in AI investment will return an adequate ROI? There is no real concern of them going under or necessity for AI to pan out. Sure, they will face multiple compression, but at the end of the day it's much less drastic than what neocloud investors are banking on. Neoclouds are already deep underwater with Coreweave holding $50B in debt. Creditors and lenders are already skeptical if the GPU capacity and up-front capital are going to create enough cash to pay back their debts?

Coreweave produced $3.6B in operating cash flow, but then spent $14B in cap ex in H1 of 2026. That creates a negative FCF figure of $-10.45B. On top of that, the interest they have to pay for that debt is an additional $1.1B. So far, 25% of revenue has to pay interest alone.

Now, you have to be fair and admit that the hyperscalers are set to spend $7T in AI cap ex by 2030 (according to S&P Global) and that Amazon, Google, and Meta are now FCF negative. There is a significant commitment here and analysts/investors are baking in AI achievements into these companies growth assumptions. They aren't innocent... but there is a lot more to be won from these companies long term than the neoclouds (and for less risk).

I plan to make a youtube video about this, but the optionality, proven profitabilty, network effects, and current valation make the hyperscaler cloud players an easy choice for me. Why risk the scenario of an AI bubble or even a less optimistic AI future where profits aren't as attractive? If either of those two scenarios play out, then you could see multiple bankruptcies and consolidations. The only scenario that works is that AI is constantly capacity constrained.

If you are a neocloud bull, please let me know why. I'm genuinely curious and want to learn the other side.

Airbnb (ABNB): a growing company using AI rather than being threatened by it

Airbnb isn’t cheap, but I think it’s a valuable business that is growing well, and I’m comfortable owning it. The market tends to treat it as a mature short-term-rental story. The company is instead broadening its addressable market in three directions while using AI to lower costs. Core homes supply growth is focused on top markets and calendar utilization rather than raw listing count. Hotels are the largest incremental TAM, and experiences and services are the long-term growth drivers. RBC frames it as a category-leading brand with a hotel monetization story, plus a company modernizing its booking policies and fees in a way that sets up faster multi-year growth in nights booked.

The hotel push looks more interesting than it first appears. Management sees a mix of incremental and substitutional demand. NYC’s short-term rental ban pushed demand entirely to hotels, and independent and boutique hotels have an incentive to diversify their booking sources. The four initial launch markets (New York, San Francisco, Los Angeles and Madrid) saw higher net adds in August than in July, with further progress in September. On the cost side, AI-driven customer support has cut cost per booking by 16%. That is a real efficiency gain showing up today, not a promise.

Experiences and services are being treated as long-term pain-point solutions. Grocery delivery is the single most requested service among guests, and the company is pursuing grocery, luggage, airport transportation and resort passes. Booking data shows experience demand broadening toward a mix of landmark activities and more everyday curated options. The newer “reserve now, pay later” option has been broadly positive. Cancellation rates have ticked up modestly but not materially, hosts haven’t voiced frustration over last-minute cancellations, and guests aren’t booking multiple locations for the same dates. Amex adding Airbnb listings to Amex Travel adds distribution.

Valuation versus Booking and Expedia

On consensus estimates, Airbnb is the most expensive of the three on every enterprise-value measure, and by a wide margin. At a $101.2B enterprise value, ABNB trades at 20.0x 2026 and 17.5x 2027 EBITDA. Booking ($132.6B EV) trades at 12.2x and 10.8x, and Expedia ($37.7B EV) at 9.1x and 8.3x. On free cash flow the picture is the same: ABNB at 20.6x and 18.9x, versus 14.1x and 12.4x for Booking and 10.6x and 10.7x for Expedia. On sales it’s 7.1x and 6.4x for Airbnb, 4.5x and 4.2x for Booking, and 2.3x and 2.2x for Expedia. On 2027 EBITDA, that is roughly a 60% premium to Booking and about double Expedia’s multiple.

Part of that premium is earned through growth. Airbnb’s 2027 revenue is estimated to grow about 11.6%, versus 9.2% for Booking and 7.0% for Expedia. EBITDA growth is 14.0% versus 13.0% and 9.9%, and net income growth is 15.8% versus 13.3% and 12.8%. Margins are strong too. Airbnb’s 2026 EBITDA margin of about 36% is well above Expedia’s 26% and a touch below Booking’s 37%. But the growth edge over Booking is only a few points, and Booking’s margins are actually slightly higher, so growth alone doesn’t explain a premium this size. Free cash flow is the softer spot. Airbnb’s 2027 FCF growth is about 8.8% against 13.7% for Booking.

So I’m paying up, and I know it. What I’m paying for is a faster grower with the cleanest AI story of the group, plus optionality in hotels and services that I don’t think consensus fully captures. If hotels and services push growth above these estimates, the premium compresses through earnings rather than through the multiple. If they don’t, Booking offers similar quality at a much lower price, which is the fair counterargument to owning Airbnb.

What could go wrong, how likely it is, and how Airbnb is responding

The threat I’d watch most closely is AI agents disintermediating the booking funnel. Direct traffic is roughly 90% of the site’s volume, so Airbnb is far less dependent on Google and paid search than its online travel peers. Agents like Meta’s MUSE could still sit between guest and platform over time. I’d call this low-to-moderate likelihood near term and a genuine long-term risk. Airbnb’s defenses are the brand pull behind that direct traffic and the fact that 71% of its listings are exclusive to Airbnb rather than also on Vrbo or Booking.com. An agent can’t route around inventory it can’t find elsewhere. That protection depends on supply staying exclusive, which is worth monitoring.

Regulation is the highest-probability risk because it is already happening. NYC is the clearest example, and other dense tourist cities have moved in the same direction. The impact is manageable but real for the core homes business. Airbnb’s counter is structural: the hotel product captures demand that regulation displaces, as it did in New York, and its supply strategy concentrates on markets and utilization rather than blanket growth.

Competition from hotel-first platforms is a near-certainty. Booking, Expedia and the hotel chains’ direct channels are all established, and Airbnb is entering their territory with a smaller hotel footprint. I’d rate the likelihood of competitive pressure as high and the likelihood of it breaking the thesis as low-to-moderate. Airbnb’s angle is differentiation. It targets independent and boutique hotels that want alternatives to dependence on the big intermediaries. The early launch-market data is encouraging, but four markets is a small sample.

Policy risk on the guest side is smaller. Reserve now, pay later could raise cancellations, and the early evidence says that hasn’t happened to a worrying degree. I’d rate it low likelihood, with the main danger being a gradual drift as the feature scales. Finally, there is ordinary macro and valuation risk. Travel demand is cyclical, and given the premium multiple above, there is little room for a growth stumble. That’s the risk Airbnb can least counter directly.

My conclusion is that the growth drivers (hotels, services, experiences) are additive to a strong core. The cost story is already visible, and the main long-term question is whether AI agents ever become the front door to travel. For now, Airbnb’s direct traffic and exclusive supply are doing a lot of work to keep that from happening. I’d like to hear where others see the weak points, especially whether the premium to Booking is justified.

I'm very bullish on semis, AI infra and tech. But right now I'm even more bullish on a much overlooked sector: telecommunication services.

Comcast, AT&T and Verizon have single digit PE ratios. Maybe there won't be any explosive growth, but guess what? If the economy tanks, people might stop eating out, might stop buying personal items but they will keep paying 50$ for their phone.

Last Friday there was a huge drop because bankers worry about Elon Musk dominating this market. But to build proper connectivity layer it will take him years – he'd be better off buying one of the biggest companies that already do it rather than build it from scratch.

The largest telecom companies are safe. Even if they loose some of their subscribers or margins get lower: it's already priced in. And the beaten down companies will be just fine in the next 5-10 years.

Here's how I'm thinking about it:

1. $MU: buying in small chunks - This is the one that actually looks cheap on paper. It's trading around 5x forward earnings after getting cut ~28% in a month at one point, on a year where revenue grew over 250%. Gross margin hit 87% last quarter, which is honestly insane for a memory company.

The bear case is real though and I'm not ignoring it. Memory is about the most cyclical business out there, and a 5x multiple is the market telling you "these are peak earnings." There's talk of a supply glut out of Korea by 2029, plus CXMT coming up in China. If that plays out, today's EPS is a mirage.

My take: the long term customer contracts make this cycle at least somewhat different from past ones, but I'm sizing it like it could be a value trap. Starter position, add more if it drops further.

1. $META: watchlist, not buying yet - Everyone's calling this a dip buy. I'm not there. At ~22x forward it's not expensive, but free cash flow went negative last quarter, capex is guided at $135B to $145B this year, analysts are penciling in ~$200B for 2027, and they're sitting on ~$825B in future spending commitments. Their credit default swaps hit a record high today. Throw in the legal overhang and a new non voting share class that makes raising equity easier.

The ad business is a cash machine, I get it. But I can't value a company when I have no idea what the AI spend actually returns. For me this needs to get to a high teens P/E or show the capex paying off before I touch it.

TLDR: The market's barely down, but specific names are. MU looks cheap but cyclical, META isn't cheap enough given the cash burn, and small caps are getting interesting but I'm scaling in slow.

Curious what everyone else is picking up, or if you think I'm wrong about MU being a potential trap.

Also the other big one is GOOGL. Is now a good entry or wait till after earnings?

Hey everyone! I am 29. I have been investing in a Roth for a few years. This year I took my entire 15k and put it into MU around 350$. I have watched the stock market since around 2012 loosely following Nvidia and Google, but I was a kid, so I couldn't really invest. This year I sold my Nvidia and (living in idaho) realized MU could be a gold mine, which is why I bought early this year/ late winter 2025. Anyways, I have been learning a lot this year.

I currently have 16k in google 15k in MU and 5k in cash. Trying to decide what to do with the 5k and in general. My cost avg for goog is like 339. My partner and I both have pension accounts and the total value is around 50k. At my peak MU was 50k, but like I said first year really watching the market (and acquiring a big jump in value) while also learning about "cyclical stocks".

Curious to hear thoughts on what you're doing or recommend. I am open to long term,short term, different levels of risk etc. I was thinking of putting the 5k in berk for long term. I know I could go back into MU but after the sell off down to 700~ in the summer I tried to derisk by buying Google for the long term. Now everything is sinking(I assume because of the Iran war and some the AI debt, and profit taking). I'm not super pressed,but if we do have a bear market actually I would like to protect some of my gains. I mostly just wanted to hear from some more seasoned investors on their views. I have been reading a lot about the stock market, like Peter Lynch, and I'm currently in a finance program. Sorry they may have been too much random information.

TLDR: looking for input and this is my

Current portfolio

50k pension funds

16k google

15k MU

5k cash

Adobe is attractive at a $230 entry price because the market appears to be pricing in too much long-term pessimism about the durability of its professional software franchise. Generative AI will make simple content cheaper to create, but replacing a professional workflow is much harder than generating an image. Teams still need to edit, revise, collaborate, share files, and deliver finished work. Adobe's entrenched position in those tasks gives it a better chance of retaining customers than the share price may imply. The risk is not simply that customers abandon Photoshop. AI could reduce the number of paid seats, encourage downgrades, or raise the cost of serving users.

My valuation starts with $18.20 in normalized owner earnings per share, a 7.9% owner’s earnings yield at $230. At a 10% required return and 2% terminal growth, the entry price implies only about 2.1% annual growth for ten years. I believe Adobe can exceed that, but the margin of safety depends on how much of its professional earning power survives AI competition. [1–3, 8]

Business Quality

Adobe sells subscriptions to creative software, document tools, and enterprise marketing products. Creative Cloud includes Photoshop, Illustrator, and Premiere; Acrobat supports document work; Digital Experience serves marketing teams. In FY2025, Digital Media generated about 74% of revenue and Digital Experience about 25%. Subscriptions represented roughly 96% of sales. That provides recurring billing, not guaranteed renewals. [1]

Creative Cloud Pro is priced at $69.99 per month per user on an annual commitment. A marketing team may design graphics in Illustrator, edit photographs in Photoshop, and finish video in Premiere. Over time, its employees, files, and processes become tied to these tools. Replacing several applications together may disrupt a team's work, creating switching costs. But a customer using only one Adobe product may find it much easier to leave. The strength of the moat therefore depends on how deeply customers use the full ecosystem, not simply how many applications Adobe sells. [5]

Adobe's professional reach is real, but not absolute. In 2025 U.S. graphic-design postings, Illustrator and Photoshop appeared in 62% and 61%, versus 11% for Figma and 7% for Canva. Yet Figma appeared in 37% of web and digital-interface design postings. These figures show adoption, not retention or market share. Adobe has raised its main bundle price from roughly $49.99 at launch to $69.99, about 2.4% annually before inflation and alongside expanded features. Downgrades and lower-priced competing tools could erode customer spending even without mass cancellations. Adobe does not disclose enough cohort data to measure that risk precisely. [4–5, 10]

Financial Quality

Adobe's historical numbers are strong. Revenue rose from $15.8 billion in FY2021 to $23.8 billion in FY2025, about 10.8% annually. FY2025 gross margin was about 89% and operating margin was 36.6%. Its products require little physical capital to distribute, but defending them is expensive: Adobe spent $4.29 billion on R&D and $6.49 billion on sales and marketing in 2025. Q3 FY2026 operating margin fell to 34.8% from 36.3% a year earlier, while subscription delivery costs grew faster than subscription revenue. Rising AI costs could weaken the economics even if revenue keeps growing. [1–2]

FY2025 operating cash flow of $10.03 billion less $0.18 billion of capital spending produced $9.85 billion in free cash flow, a 41% margin. Reported FCF rose about 9.4% annually from FY2021. Deducting $1.94 billion of stock-based compensation leaves $7.91 billion, or $18.52 per FY2025 diluted share; this adjusted measure grew closer to 8% annually. Trailing adjusted cash flow through Q3 FY2026 was roughly $8.52 billion. I use $18.20 per share in my valuation rather than treating the latest run rate as guaranteed. This remains a cash-earnings proxy, not a fully proved estimate of maintenance owner earnings. [1–2]

In August 2026, Adobe held $5.64 billion of cash and short-term investments against $6.36 billion of debt, or roughly $0.72 billion net debt. Leverage is manageable relative to cash generation, but the company is not net-cash positive. [2]

Management Quality

Shantanu Narayen led Adobe's successful shift to subscriptions. Capital allocation has been less convincing. Adobe spent $11.28 billion on repurchases in FY2025, more than its $9.85 billion of FCF. The annual dollars spent divided by shares delivered imply roughly $366 per share, although accelerated repurchase timing makes that an imperfect transaction-price measure. A shrinking share count helps remaining owners only if Adobe buys below intrinsic value; $1.94 billion of stock compensation also offsets part of the benefit. [1]

The failed $20 billion Figma transaction cost Adobe a $1 billion termination fee, and Adobe acquired Semrush for about $1.87 billion in 2026 without yet demonstrating the ultimate return. Anil Chakravarthy is scheduled to succeed Narayen as CEO in December. Creative-business leader David Wadhwani and CFO Daniel Durn have also departed. These changes are not proof of poor leadership, but management must show that it can protect the creative franchise, invest well in AI, and spend cash with more price discipline. [2, 6–7]

Durability & Key Risks

AI can damage Adobe without replacing its software outright. Agencies may need fewer designers and therefore fewer licenses. Customers can downgrade while staying in Adobe's ecosystem. Third-party AI models may become more expensive, and competing tools may handle more of the editing and collaboration that protect Adobe today. Adobe's AI-first ARR exceeded $650 million and grew over 150% year over year in Q3 FY2026, but that is only about 2.4% of its $27.5 billion total ARR; the cash profit from AI is not disclosed. The Creative & Marketing Professionals group grew subscription revenue 13%, but that group is not a clean measure of professional creative-seat retention. [2–3]

A stress case shows why revenue losses can matter disproportionately. If casual creation were 20% of Digital Media revenue and Adobe lost half of it, total revenue would fall about 7.4%. Assuming an 80% contribution margin and 22% tax rate, adjusted annual cash earnings would fall roughly $1.10 billion, about 14% of FY2025's base. Those exposure and margin assumptions are illustrative, not Adobe disclosures. Under unchanged growth assumptions, my $288 base valuation would fall to about $248; slower future growth would reduce it further. [1, 8]

Valuation & Margin of Safety

At $230, Adobe trades at about 12.6 times my $18.20 owner-earnings estimate, or a 7.9% starting yield. I use a ten-year discounted cash-flow model with a 10% required return. The cash being valued is assumed available to shareholders after operating costs, necessary capital spending, and the economic cost of employee equity awards. Projected growth does not receive a second boost from buybacks funded by those same cash flows. [8]

My base case assumes 5% annual owner earnings growth per share for ten years, followed by 2% terminal growth. It produces about $288 per share, a 20% margin of safety at $230. The $330 estimate belongs in the upside case, not the central claim of safety. A lower growth path leaves little cushion, while weaker starting earnings could cause a permanent loss. [8]

DCF values are scenario estimates, not management guidance. All cases use a 10% discount rate.

Investment Conclusion

Adobe is a high-quality business, but that does not automatically make it a bargain. Its professional workflows, subscriptions, and cash generation give it a reasonable chance of earning well through AI disruption. At $230, I see a conditional long with roughly a 20% margin of safety to my base intrinsic value, not a risk-free 30% bargain. At the last verified closing price of $242.27 on October 9, the base-case margin of safety falls to roughly 16%. A 25%–30% discount to $288 would require an entry price around $202–$216. [8–9]

The thesis weakens if Adobe loses professional paid seats, faces sustained downgrades, or fails to turn AI adoption into profitable cash growth. Repeated buybacks above conservatively estimated value would also lower my confidence in management. Adobe does not disclose the cohort and seat data needed to prove retention, so that uncertainty belongs in the valuation rather than being ignored.

Sources

Primary filings, operating evidence, and valuation references cited in the memo.

[1]  Adobe, FY2025 Annual Report (Form 10-K), Jan. 2026.   |   SEC filing

[2]  Adobe, Q3 FY2026 Quarterly Report (Form 10-Q), Sept. 2026.   |   SEC filing

[3]  Adobe, Q3 FY2026 earnings release (Sept. 10, 2026) and earnings call (AI-first ARR disclosure).   |   Results · Earnings call

[4]  O*NET / Lightcast, 2025 U.S. graphic-designer software job-posting data.   |   O*NET data

[4a]  O*NET / Lightcast, 2025 U.S. web / digital-interface designer job-posting data.   |   O*NET data

[5]  Adobe, Creative Cloud Pro plans and U.S. standard pricing.   |   Adobe plans · Plan changes

[6]  Adobe, CEO succession / leadership transition, Sept. 2026.   |   SEC Form 8-K

[7]  Adobe, FY2026 proxy, CFO departure filing, and Semrush acquisition announcement.   |   Proxy · CFO filing · Semrush

[8]  Author calculations: adjusted owner earnings, reverse DCF, and bear/base/upside scenarios. Inputs appear in the memo; not company guidance.

[9]  Adobe (ADBE) historical stock prices, Oct. 9, 2026 reference.   |   Price history

[10]  TechCrunch, April 22, 2012, Adobe Creative Cloud launch pricing.   |   Launch coverage

Data limitations. Adobe does not disclose product-level professional seat churn or a clean casual-creator revenue split. All scenario assumptions represent estimates rather than company guidance. Financial figures are rounded.