Gene Munster

Sundar says they aren't seeing cannibalization in Search, despite Gemini usage ramping up from 650M to 750M weekly active users over the past three months. $GOOG

Native Gemini subs are now 750m weekly, up from 650m in September. OpenAI is at 900m. The gap is 150m today. Six months ago it was about 300m gap. Sundar said also had a “sharp increase in usage” by each users. My take: More users, more usage by each user. $GOOG

About half of Capex will go to Cloud business this year.

$GOOG Cloud revenue growth hurdles. Sundar says compute capacity around chips and power in an efficient way is their #1 challenge. Sundar said they’re “meeting the moment well and spending time on it” My take: Google Cloud growth will likely be impacted at times with more supply constraints.

What does $GOOG management have to say about the software sell off. Mark Mahaney asked the question on the call. Sundar said this moment for software leaders need to deeply incorporate AI into workflows and drive efficiencies within the organization. My take: Doesn't tell us anything. He added token usage from software companies has been "very robust" in December. My take: The software companies know that they have to rebuild their business with AI, which speaks to them understanding the reality of what's around the corner.

Waymo closed a $16B round on February 2, which set the post-money valuation at $126B. At the surface, this valuation is a bargain. I think the reason why its not higher is because the risk that Tesla ramps fast in the coming two years.

Regarding the question about how early we are in AI? $GOOG guided Capex this year to grow at 108% at $175-185B. Previously the Street was expecting 30% growth, or $116B. Meta is now well behind Google at 74% growth. Let the arms race continue.

$GOOG Backlog up 40% qq vs up 46% qq last quarter. My take: Its a win given its still a big number off of a higher base.

I still believe $GOOG will be the top performing Mag 7 this year. Google Cloud crushed it. Grew at 48%. Whisper number was 38% growth. Search had a solid quarter too. Grew at 17% vs. the Street whisper 15% and compared to 14.5% in Sep, 11.7% in June, and 9.8% in March. Highest search growth quarter since March of 2022. Bottom line: AI is working for Google Cloud & Search in a more meaningful way than I expected going into tonight. Let’s see what they say on the call about ad coverage in AI Overviews and AI Mode.

Google Cloud crushed it. Grew at 48%. Whisper number was 38% growth. $GOOG is down 1% after hours. Tough crowd.

$QCOM Earnings Prep Notes: Bottom line is that Qualcomm has more headwinds than tailwinds. * Growth: The business is expected to grow by 2% in March, and things will likely get worse in next year as Apple revenue (about 20% of sales) begins to go away. The AI play at the edge is real and could be a positive for ASPs, and the AI Datacenter opportunity is small today, and will remain small in the future. * Street Expects a Beat: Whisper is they hit the high end of their guidance of $12.6B, vs. in print Dec revenue estimate of $12.1B. This would imply 8% growth. * Guidance: Revenue is expected to be $11.2B, which implies 2% revenue growth. …

$GOOG Earnings Prep Notes: Bottom line: I think GOOG will be the top performing Mag 7 this year. * Dec Beat Expected: The whisper number calls for $112.5B vs. consensus of $111.5B. If they hit the $112.5B, revenue would be up 16.6% y/y compared to up 15.9% in Sep. If they come in line, growth will be 15.6%. * Guide. They don’t give guidance, only forward looking crumbs on the call. The Street is $104B in March or 15.3%. * Cloud: Cloud whisper revenue is $16.5B. In print is $16.2B. The in print implies a growth rate acceleration to 35.5% y/y vs. 33.5% in Sep, 31.7% in June, and 28.1% in Mar ’25. If they hit the Whisper, it will be up 38.0%…

US News & World Report ranked $LOUP as a top 7 tech ETF. In our view, we're still early in AI, and we'll aim to be early on the next mega theme. https://t.co/mfxwa2iJnk To learn more, visit https://t.co/AJupDwCrqJ.

This combo makes sense. More on Pressure Points below. https://t.co/pNRd7DURIR

Apple Has a Widening Gap Between Thrilled Customers and Frustrated Investors $AAPL https://t.co/rT4BOyahlK

Why is $AAPL up only 1% despite a much better-than-expected December quarter and March guide? The explanation begins in June 2024. https://t.co/Wdl3qKWtpW

Cook doesn't want to estimate when supply and demand will be in equilibrium. My take is it will be in June. June is the lowest quarter for iPhone sales, down typically 20% from March to June. That means they have time to catch their breath.

$AAPL * The March revenue guide could have been even higher than the 13-16% vs. the Street at 10%. Reason is March inventory is low because demand in December was stronger and given the memory environment they’re unable to quickly ramp production in March. *I believe March constrains will be a positive for June. Currently the Street is looking for June growth of 6%. I expect it will land at up 8% after model updates. Stock is still up only 1%

$AAPL guides up for March on revenue and margins and stock is still up only about 1%. Expects revenue growth of 13-16% vs. Street at 10% Gross Margins of 48-49%, vs. Dec at 48.2%. This is inline with typically margins improve from Dec to Mar.

$AAPL active devices up 6.4% year over year. The last datapoint we had was a year ago, and that was up 6.8%. Apple's flywheel is alive and well.

$AAPL is flat in after-hours because we are waiting on the guide. The goodness around just reported revenue and gross margin (reported 48.2% vs. 47.5% estimate) could be reversed. My sense is revenue guide will be positive. The Street is at 10% yy growth in March and they just reported 16%. The margin guide is a wildcard with the memory trends.

My math suggests they beat iPhone estimates outside of China. * iPhone China likely grew at 38%. * That means that iPhone outside of China grew at 17% vs. the Street up 13%. $AAPL

Holy China. $AAPL up 4% on earnings. China was up 38%. Street was thinking it would be flat to up slightly. Last quarter it was down 4%, and down on average 5% over the past two years. The $25.6B in China revenue essentially ties its all time high at $25.8B in Dec of 2021. My take: It's evidence that Apple's brand is teflon when it comes to US-China geopolitical noise.

$AAPL reports in an hour. The memory constraints is resulting in some fractional increases in lead times. Could have a fractional impact the March guide. What really matters is will they start to change how investors think about their chops in AI. Last April Google was faced with similar skepticism, and they should improve Gemini and launch Nano Banana. Tonight investors will want to hear the new Siri is on track for spring, what's going on with https://t.co/Y0EVSrDb2A and hint that there can be more to come in AI this fall (the new new Siri chatbot).

Elon's company's will always play nice with each other. * SpaceX wants xAI for the datacenter in the sky. * Tesla wants xAI for Grok for FSD and Optimus. If SpaceX buys xAI, Tesla will still get access to Grok.

Reuters reports SpaceX is in talks to merge with xAI. Over the next three years, I put the odds at: * 35% that SpaceX buys xAI * 45% Tesla buys xAI * 20% xAI remains standalone. SpaceX and Tesla have each invested $2B into xAI. My take: Investors would likely approve the deal (either SpaceX or Tesla buying xAI) because it's Elon thinking big, future versions of Colossus belong in space.

Shares of $TSLA are up 2% in after hours. Regardless of how it trades tomorrow, the company is making real progress when it comes to autonomy. https://t.co/CkvkcFh0hd

Zuck’s AI bet is paying off $META https://t.co/DZgFjjR8Wn

The fact that $TSLA is disclosing FSD subscriptions is all you need to know about its progress. That progress makes Robotaxi expansion a reality. https://t.co/qSn8K4Hm6b

$MSFT continues to further fade. Now down 7%. 45% of the backlog being due to OpenAI.