Gene Munster

$META is down 5% mostly the margin miss. Operating margin (GAAP) 30.9% vs Street 35.6%. Only beat revenue by 0.8%. Capex of $30.1B was below the Street $33.9B. Key on the call is what Zuckerberg says about building a cloud business, and what the costs will be.

Siri is 16 years old and is nearing its biggest growth spurt: https://t.co/3IzqhJnjPf

Getting ready for earnings this week:

$INTC investors seem to be OK with a bump up in CapEx. I think they’re getting the benefit of the doubt when Google did not because investors believe the Intel is a better capital allocator. Some of their confidence may have come from a comment from the CFO tonight emphasizing they would not be making these CapEx investments unless they were highly confident in customers showing up. https://t.co/valLeaZxRN

$INTC's results and guide are yet another example that we’re in the 3rd inning. https://t.co/WeyiinHi8c

$INTC says they won't ramp Capex unless they were confident in customer commitments. Since they're raising Capex "significantly" next year, that means they're confident in those 10 long term customers.

$INTC CFO hints that they will get a “lift” in December when supply improves, but they still won’t be able to keep up. My take: Investors are going to read that as December could be much stronger than expected. Currently the Street is looking for the DCAI segment to grow at 34% in Dec.

$INTC CFO says they may tap capital markets to fund Capex. That's a well traveled road with Google and Amazon doing that recently. No shame in that approach.

$INTC CFO gets asked for more details on 2027 Capex "up significantly in 2027" CFO would not give an exact number, but said they will release it at the start of next year and wanted to give investors "line of sight". My take is it will be up 20% next year. Street currently looking for flat. I expect hyperscalers to grow Capex next year by 40% plus. So yes, it's growing fast, but not as fast as the more aggressive tech companies.

$INTC likely going lower on Capex guide. Raising 2026 Capex $20B vs. Street at $15B. 2027 is expected to be up significantly. Street is currently at $17B. I bet that it goes to $20-$25B next year.

Lip-Bu Tan says 14A customers are showing up even though the chips won’t be out until second half of 2027 and ramp in 2028. My take: There is a light year gap between strong customer interest and actual sales. That said, he is setting a bar, and likely wants to meet or beat it. Bottom line is 14A customers are showing up, and that’s a positive for growth in 2028, so investors can sleep well at night knowing there is a big catalysts out there. $INTC

Lip-Bu Tan starts call saying $INTC can't keep up with demand. My take: We heard it from Google Cloud last night and investor did not bite. They're bitting tonight with INTC up 11% in after hours.

$INTC up 11% on June earnings. • My bottom line. What's going on is much bigger than INTC. Results are a sign that we are still much early in AI than many think. • I think of Intel CPUs as an accessory to the AI buildout. Its business is getting pulled along by NVDA. • To put it into perspective, $NVDA’s GPU business is 13x bigger than Intels most exciting segment, DCAI, with NVDA expected to grow at 96% in July. Intel DCAI just printed 59% growth. Intel is more successful at beating the law of large numbers. • Intel is great and there are better AI companies to own to invest in AI. Deepwater does not own shares. • The guide ups have bee…

So what did we learn about the AI trade from Google and Tesla earnings? The infrastructure trade is intact based on higher capex outlooks and margins have been under pressure. Overall, I still believe we’re in the 3rd inning. https://t.co/zjvZOlVoRN

The massive Cloud beat got buried by higher capex guidance and expectations for lower Cloud margins going forward. As for Search, AI Mode monetization is beginning, which should be a long term growth driver. https://t.co/8vjnqqfnXc

While TSLA shares will likely be down tomorrow, the long term story continues to improve. Elon is all in on capex, FSD adoption is accelerating, Robotaxi is rolling out slowly to prioritize safety before scaling, and the odds of a SpaceX-Tesla merger just inched higher. https://t.co/9SQva4mVSY

More on capex from the $TSLA call. Capex is for scaling factors: TeraFab, Solar manufacturing, Optimus, Cybercab, Semi. Elon says it’s a capital efficiency vs. time tradeoff question. It’s ok to be less capital efficient in the near term if they get stuff done faster because that will deliver a higher NPV later. My take: Elon's all in on capex, as long as it’s not “wasteful.” I expect 2027 to be $25B vs. Street at $21B

The odds that $TSLA and $SPCX come together just increased. They got a question about the topic on the call, and I was surprised they even entertained it. Elon said they have a great relationship but couldn't comment on further integration, handing it off to legal. After legal said they couldn't say much, Elon took the mic back and elaborated on the benefits the two companies bring each other, like Starlink preventing Robotaxis from going into a "Bermuda Triangle of connectivity." He said there are other benefits, too. My take: Going into the call, I thought there was an 80% chance the two companies come together in the next few years. I'm…

Question from the call on Robotaxi rollout: What milestones are you looking for to increase the pace of rollout? Elon said the economics will be "so compelling" and "demand will outstrip supply". Elon says the hold up on getting more aggressive at the rollout is the march of nines. That is does 99.9% safe enough or 99.99999%. He is saying he wants more data on the safety. They have 380k miles. It's not enough to have confidence in a full rollout. $TSLA

$TSLA shares paired some of the after hours decline on Ashok's Robotaxi rollout will be slow than fast. No details of how many cities are next was given.

$TSLA says they now have 380k miles of unsupervised Robotaxi with zero incidents. My quick math is that its about 20% of total Robotaxi miles and about 1% of compared to Waymo. I'm fine with that gap between Waymo given Tesla is making the right call to putting safety first.

Welcome deliveries back to the $TSLA story. Elon talked about growing the core business. The CFO says they have the strongest backlog since 2023 and won't be able to keep up with demand. Street is looking for deliveries to be down 8% yy in September. I expect them to be flat. For December Street at up 10%, based on CFO comment its likely 10-15%. Deliveries matter because more cars mean more shots on goal for FSD and learnings for autonomy.

$TSLA dips another 2% on Elon's comment that this will be a massive capex year. He didn't detailed numbers. We likely get them from CFO later on the call. The key is next year. Street at $25B in capex for CY26 and $21B in CY27. That number next year is likely above $25B.

$GOOG dips slightly more. Now down 4% on CFOs comment that Cloud margins they will go down in the back half of this year because they need to go to third parties, aka $SPCX , to meet the demand. $GOOG As for TPU's would not answer the question about margins on TPU vs Cloud, now at 35.6% which is a record. TPUs are likely dilutive to margins but it's still small.

$GOOG CFO says TPU sales are recognized in the $514B in Cloud backlog. The TPU number is small and will become more measurable in 2027. Bottom line: TPU does not move the needle for GOOG and is not competitive enough to measurable hurt $NVDA.

The $GOOG capex guide is good news of the AI infrastructure trade. The question is will investors give these companies credit in tomorrow's trading. So far the answer they will get some credit. In after hours NVDA is unchanged on that comment, but $VRT up 1% and $COHR up 2%.

$GOOG stock drops about 3% in after hours on the capex guide, about 4% higher than the Street for this year and they said it would continue to aggressively invest next year. Translation: Street looking for about 37% growth next year. I expect analyst increase that to 45% tomorrow, and eventually it will be above 55%.

CFO says to expect Search growth rates to decline starting in September because of tough comps. The Street is already there given Street growth for Sep is 15% (down from 16.5% in June), Dec 14%, CY27 13%

Company increase capex guide by $10B or about 4%. Said next year will continue to have significant capex investments. Currently the Street is looking for Google to grow capex next year by about 35%. I'm at 55%.

Waymo deliveries hitting 1m data point from the $GOOG call was likely over the past year. That would compare to about 26m paid rides over the past year. In other words, deliveries are just under 5% of usage. That number is going higher.