News about cloud computing

The author warns that the S&P 500 Shiller CAPE ratio, above 41, is extremely elevated, and says investors should favor companies with durable advantages before a downturn. Alphabet is highlighted for products embedded in everyday life, a diversified mix of advertising and Google Cloud, and vertical integration including custom TPU chips. In the second quarter, Alphabet reported revenue of $119.8 billion, up 24%, Google Cloud revenue up 82% to $24.8 billion, operating cash flow of $39.1 billion and $242.5 billion in cash and marketable securities. The article notes Alphabet fell 55% in 2008, about 31% in the COVID-19 crash and about 39% in 2022, and the author suggests buying gradually during dips and holding long term.

Nebius Group (NBIS) shares have fallen about 40% from their record close of $286.69 on June 18 to around $165, mostly in October, with no company news clearly explaining the drop beyond broader selling in AI cloud stocks. Revenue rose to $582 million in the second quarter, up 454% year over year, but management's 2026 forecast of $3.0 billion to $3.4 billion implies about $2 billion in second-half revenue, more than double the first half's $981 million. The company also posted a net loss from continuing operations of around $190 million and capital expenditures of about $5.7 billion in the quarter, while three customers accounted for 59% of second-quarter revenue. Trading at around 15 times expected 2026 sales, the author says the stock is still not cheap enough and would wait for a third-quarter report showing revenue heading toward $1 billion a quarter and backlog growth from customers beyond Microsoft and Meta.

The article highlights three stocks where discounted cash flow models suggest value above current prices. Amazon.com's AWS generated about USD 148.4 billion in revenue and grew roughly 20% in 2025, which the article attributes to AI demand, with a market cap of about USD 2,696.6 billion. Gamma Communications, whose enterprise operations contribute about GBP 136 million in annual revenue, sells cloud calling and connectivity tools with recurring cash flows. Yadea Group Holdings generated about CNY 34.1 billion from electric two-wheelers and trades below SWS DCF fair value, though the article notes an unresolved pressure on future margins.

Amazon is scheduled to report third-quarter earnings on October 29, and the author expects the stock could rally again if cloud momentum continues. AWS revenue rose 37% to $42.2 billion in the second quarter, its fastest growth in 18 quarters, while operating income reached $16.6 billion versus $10.2 billion a year earlier, and its AI business has an annualized run rate above $25 billion. Capital expenditures are expected to reach about $220 billion this year, pushing free cash flow to negative $7.6 billion over the 12 months to June 30, compared with $18.2 billion previously. The author discounts the $53.4 billion non-operating pretax income, mostly tied to the $13 billion Anthropic investment, and says AWS revenue and operating income matter more.

The article compares Amazon (AMZN) and Walmart (WMT) as 2026 investments, weighing Amazon's high-growth tech, e-commerce and cloud businesses against Walmart's stable physical retail base. For fiscal 2025, Amazon reported revenue of about $716.9 billion, up roughly 12.4%, and net income of about $77.7 billion, with $122.9 billion in cash against $251.6 billion in debt. Walmart's fiscal 2026 revenue reached about $713.2 billion, up 4.7%, with net income of about $21.9 billion, $11.5 billion in cash and $75 billion in debt. The author would choose Amazon for its 28% share of the global cloud market and its role in AI infrastructure, while noting Walmart's AI shopping assistant Sparky and a 23% rise in global e-commerce sales in the second quarter of fiscal 2027. Both face risks, from Amazon's antitrust proceedings to Walmart's exposure to tariffs and geopolitical instability.

The article argues that the Magnificent Seven together account for more than one-third of the S&P 500's market capitalization, and the author would choose Alphabet as the single stock to own for the next decade. According to the piece, YouTube held a 14.2% share of U.S. daily TV viewing time in July per Nielsen, Waymo was completing 500,000 rides a week, and Google Search made up 53% of Alphabet's revenue. Google Cloud posted second-quarter revenue of $24.8 billion, up 82% year over year. However, Alphabet expects to spend about $200 billion on infrastructure at the midpoint of its plan, free cash flow turned negative in Q2, and the author says investors must be very patient.

AI stocks have had a rough time as investors question whether heavy data center spending will pay off, but Microsoft is bucking the trend, with shares up around 8% over the past month. Azure cloud revenue topped $100 billion for the first time, up 41% from a year earlier, and management expects Azure revenue to rise 45% in fiscal 2027, showing that Microsoft's roughly $175 billion in capital spending this year is paying off. The new Copilot desktop app, which helps users code and completes some tasks autonomously, had 30 million paid subscribers before its launch, a 50% jump in just a few months. The article also argues that the company's enterprise strength and AI focus position it well for the long term, and notes its trailing P/E of 27 is below the tech sector average of 33.

Nvidia shares have gained 899% over the past five years (as of Oct. 15), and November has been mostly positive this decade, with the only decline coming in November 2025, when the stock fell 13%. Data center revenue rose 117% year over year to $89 billion in fiscal Q2 2027, with hyperscalers contributing about $49 billion. The article argues the key risk to this pattern is hyperscaler capital spending, which depends on the momentum of their cloud businesses. Hyperscaler backlogs have exceeded $2 trillion, and four of the top five will report third-quarter results within two weeks. If cloud growth slows, hyperscalers may cut capex, which would weigh on Nvidia's data center business.

J.P. Morgan analyst Doug Anmuth raised his price target for Alphabet stock to $425, about 23% above the current price, betting that selling its custom TPU AI processors to other companies will accelerate cloud revenue. Google Cloud sales rose 82% to $24.8 billion in the second quarter of 2026, and Anmuth thinks cloud revenue could double in the third quarter. Piper Sandler's Thomas Champion estimates Google's processor sales could reach $104 billion by 2028, compared with Alphabet's total second-quarter revenue of $120 billion. Alphabet reported Q2 EPS of $9.11, up 294%, but some investors worry about its roughly $200 billion AI infrastructure spending this year. The stock trades at a trailing P/E of about 17, versus a tech sector average of 33.

Alphabet (GOOGL) shares gained 3.43% over six months to October 15, but its 17.62x trailing P/E is misleading because reported earnings were inflated by large investment gains. Google Search revenue rose 17% to $63.3 billion in Q2 2026, even as ChatGPT and Claude offer alternatives to traditional search. Google Cloud revenue jumped 82% to $24.8 billion with a 35.6% operating margin, and its $514 billion backlog is more than half expected to convert to revenue over the next 24 months. About $99 billion of gains, largely unrealized, could reverse if valuations fall; a rough adjustment puts the trailing multiple near 26x, versus a 22.83x forward P/E.

Oracle shares have fallen 53.84% over the past year, yet 80% of covering analysts still rate the stock a buy, with a median target 78.48% above the current price, according to CNN. The article notes revenue grew almost a third in the latest quarter and earnings grew faster, though that does not explain the drop. Analysts are weighing contracts to supply computing capacity worth $638 billion, far above annual revenue, while the market is focused on cash flow: capital spending of $75.66 billion over the past year exceeded $46.94 billion of operating cash, a gap funded by borrowing. The article frames the core question as whether returns on this spending arrive before the debt becomes a problem. The shares trade at 17.76 times expected next-year earnings.

The author predicts Alphabet's Google Cloud revenue will more than double in the third quarter, after growth accelerated to 82% in the second quarter. Management says it is still capacity-constrained and expects to recognize half of its $514 billion revenue backlog over 24 months, averaging $32 billion per quarter. Alphabet is also expanding use of third-party neocloud capacity as a bridge, which CFO Anat Ashkenazi warned will pressure margins, and plans to sell TPU chips directly, with inventory rising to $10 billion from $2.4 billion. Reaching 100% growth would require revenue above $30.3 billion, about $5.5 billion more than in the second quarter. Investors remain concerned about negative free cash flow, and the stock trades at 26 times forward earnings.

CoreWeave (CRWV) shares fell sharply this week, pushing its six-month decline to 46%, as two factors collided: its corporate bonds across maturities were sold off on fears of an AI slowdown and concern over its precarious balance sheet. A Gartner report forecasting that over 80% of neocloud providers will cease independent operations by 2030 added to the pressure. CoreWeave said it is confident in its funding, and several Wall Street firms defended it, including BofA's Tal Liani, who called the move sentiment-driven rather than about the company's ability to pay its debt and maintained a $140 price target. Liani expects fundamentals such as revenue growth to matter once the period of concern passes.

U.S. inflation reached 3.7% in September as energy costs jumped, prompting investors to look for fast-growing companies where insiders hold meaningful stakes. The article features CoreWeave, an AI cloud infrastructure provider with $7.59 billion in revenue from data processing and a market value of about $33.9 billion, and flags a risk that major cloud providers bringing compute in-house could leave it with stranded assets alongside a high-interest debt burden. Tesla is also highlighted, with its Automotive segment generating about $90.8 billion, energy generation and storage about $12.8 billion, and a market value near $1.4 trillion. The piece notes that Tesla is pursuing ambitious and speculative bets such as AI, robotaxis, humanoid robotics and battery storage, where competition is intensifying.