Shawn Burns is Solve the Riddle

  AMZN FH26 RESULT It may sound glib, but in many ways AMZN is the quintessential growth holding in a portfolio. AMZN continues to invest large amounts of capex, almost exclusively organically, and, for the most part, creates new and profitable businesses from this spend. That means the intrinsic value marches higher over time. Meanwhile, the amount of capex and its impact on FCF, as well as the large and economically sensitive retail business, means the AMZN SP can move around a lot and creates opportunities, which is a positive as well, IMO. The last result was one of AMZN’s best since I've held it, mainly driven by AWS. Management also started to give some numbers around ROI on AI/DC spend, and the returns look attractive. The narrative is eerily similar across the hyperscalers, but AMZN put more numbers around the thesis.  In aggregate, the results for the half-year showed revenues up 18% and adjusted Operating income up 33%. Operating metrics for the business continue...

  META FH26 Note My thoughts There is little doubt that Meta is a complex story, and markets do not like complex stories. In addition to this, markets usually do not price in a derisked scenario for a stock if capex is still growing strongly; it will wait for signs of an inflexion in capex growth or clearly strong returns on that capex, and we are not seeing that yet here. I like to think of Meta as three stories in one, the first being the traditional business infused with AI, which is growing phenomenally well, perhaps the best example of what AI can achieve in a traditional business. The second, which has some overlap with the first, is Meta Superlabs' goals and developments. MSL will be the driver of new products and expansions for Meta. That business is heavy on spend and generating little revenue so far, but promises a large payoff if successful. The last business is Reality Labs, which continues to generate losses; Meta signalled a slowdown in losses, but they remain l...

  GOOGL Q2 RESULT My thoughts To cut to the chase, the most important conclusion to come to regarding GOOG is whether the massive capex will deliver attractive returns. The most recent result showed some promising signs, but the comment that capex will again significantly increase into 2027 will push out any hard conclusions. Traditionally, the market has priced stocks higher when we can see a peak in the capex cycle, and that may be the case here, even if the returns are attractive. The Q2 results were strong, with revenues up an astonishing 24%, with the highlights being a huge acceleration in GCP (AI infrastructure and cloud) revenues of +82% and margins much higher. Of course, this is where the bulk of capex is going, so it is reassuring to see strength here. Search is also accelerating, which can be traced to Gemini’s integration with search, and it appears that GOOG has found the way to monetise AI-initiated queries. YT was solid and is integrating with Gemini as well. ...