Bloomberg Tech – “Tech Earnings Show Heavy AI Spending Continuing”
Episode Date: October 30, 2025
Host: Ed Ludlow, Caroline Hyde (Bloomberg)
Guests/Analysts: Brent Silvan Jefferies (Jefferies), Dave Bazooki (CEO, Roblox), Kelsey Griffith (Bloomberg Entertainment), Oscar Deshkai (Swissquote), Ryan Vistelliker (Bloomberg Equities)
Episode Overview
This episode of Bloomberg Tech dissects a jam-packed week of tech earnings, focusing on the “heavy spending on AI” by giants like Alphabet, Microsoft, Meta (referred to as “Matter”), and Roblox. The show explores investor reactions to surging capital expenditures (capex), especially in datacenter construction, infrastructure, and cloud computing, and examines implications for the broader tech sector. Additional segments cover Amazon and Apple’s anticipated earnings, Comcast’s ongoing broadband struggles, and the geopolitical backdrop of US-China tech tensions.
Key Discussion Points & Insights
1. Tech Giants’ Earnings and Surging AI Spend
Alphabet (Google):
- Capital expenditures guided between $91–93 billion, with particular emphasis on growth from generative AI products.
- Revenue from products built on Google’s AI models grew by over 200% YoY.
- Despite market concerns, Alphabet shares rose after results, contrasting with declines at peers.
Notable Quote:
“Revenue from products that are built on Google's generative AI models grew more than 200% from a year earlier...they have better AI underneath the hood than they're articulating.”
— Brent Silvan Jefferies [06:37–07:45]
Meta (Matter):
- Spending set to increase “notably” in 2025–2026, but no detailed long-term sales outlook provided.
- Investors spooked by margin compression, despite CEO Mark Zuckerberg’s insistence that under-investing in AI would be more damaging.
- Analyst sees recent stock drop as a “buy on the pullback.”
Notable Quote:
“So yeah, it doesn't have anything to do with the fundamental position. It's: are we going to see margin compression and then when does that return come back? But we already know that they have a return...this whole concept that AI doesn't pay off is silly.”
— Brent Silvan Jefferies [04:52–05:14]
Microsoft:
- Azure cloud revenue up 39% YoY, but company unable to keep up with AI demand due to capacity constraints.
- Market underappreciates Microsoft’s massive backlog and bookings growth (over 50% in RPO/backlog, more than 110% commercial bookings).
Notable Quote:
“I don't understand the market because they just put up over 50% RPO or backlog growth and...commercial bookings. Those numbers are insane. And that didn't even include OpenAI's $250 billion incremental dollars.”
— Brent Silvan Jefferies [08:50–09:27]
Market Reaction:
- Investors are favoring companies demonstrating direct AI-related revenue growth (Alphabet) over those only increasing capex without short-term revenue visibility (Meta).
- Rotation observed from tech to infrastructure, energy, and “enabling” sectors.
Notable Quote:
“We're in a momentum market...if you have capex going this high, the pushback is: why do I invest in Internet and software right now? I should be invested in energy and land and all the enabling infrastructure.”
— Brent Silvan Jefferies [05:35–06:10]
2. Roblox: Growth vs. Infrastructure Spend
- DAUs reached 151 million (+70% YoY), bookings almost $2bn for Q3, but shares down due to rising costs.
- Significant investment in safety and cloud infra, including new AI-driven facial age estimation for user safety.
- Vision: grow Roblox to 10% of the global gaming content market.
- Claims robust content ecosystem and technology that supports diverse experiences and devices.
Notable Quotes:
“With all of this growth...we are going to be spending on infra...But the final thing I want to generate is the cash flow that we generated on the platform...over $440 million of free cash flow in Q4.”
— Dave Bazooki [11:59–12:50]
“With new advances in AI, we’re going to use facial age estimation...I’m really optimistic. This is the long-term good play for Roblox...”
— Dave Bazooki [13:24–14:08]
3. Upcoming Earnings: Amazon & Apple
Amazon:
- Skepticism about Amazon Web Services (AWS) keeping pace in the “AI era.”
- High expenditures on both datacenter and logistics cloud buildouts; margin concerns remain primary focus.
Apple:
- Strong iPhone 17 sales, with upgrades driving optimism despite lack of new AI features.
- Valuation at $4 trillion prompts the question: “Is all this optimism justified?”
Segment Quote:
“There's absolutely people looking at the results we saw last night from Microsoft and Alphabet and kind of extrapolating into what we could expect from Amazon.”
— Ryan Vistelliker [30:04–30:20]
4. Macro & Markets: Rates, Risk, and Capital Allocation
- Analyst Oscar Deshkai (Swissquote) highlights the necessity for tech giants to outspend to avoid future capacity constraints—“over-investing” seen as less risky than under-investing in the face of exponential AI demand.
- Meta’s $25bn bond sale seen as evidence of tech’s appetite (and ability) to tap debt markets instead of equity.
- Blend of monetary policy (Federal Reserve doubts about near-term rate cuts) and capex anxiety feeds short-term volatility but not a “bubble pop.”
Notable Quote:
“These companies must spend in order to keep up with demand...not keeping up with the demand or risking to head into capacity constraints is worse than over investing right now.”
— Oscar Deshkai [33:12–34:21]
5. US-China Tech Tensions & Nvidia
- Trump/Xi meeting offered a short-term “trade truce,” but fundamental tech/national security issues unresolved.
- Nvidia’s new Blackwell chip: no progress toward sales to China; US remains opposed.
Report:
— “It certainly dampens any speculation that Washington would go on to approve the sale of such chips to China.”
— Tyler Kendall [22:45–23:30]
6. Additional Noteworthy Stories
- Comcast: Slowing rate of broadband subscriber losses, focus on content, and possible Warner Brothers acquisition.
- OpenAI: IPO filing rumored for 2027, at potential $1T valuation.
- ServiceNow: CEO Bill McDermott shares that 90% of back-office work at his company is now handled by AI agents.
Notable Quotes & Segment Timestamps
| Quote | Speaker | Timestamp | |---|---|---| | “The investments in AI are paying off and they just need more of them...” | Brent Silvan Jefferies | 03:51–04:51 | | “...Google is demonstrating...they have better AI underneath the hood than they're articulating. And it's now coming out, you can see it.” | Brent Silvan Jefferies | 07:00–08:00 | | “The market's got this wrong, honestly...you got to look at the backlog. The backlog is leading indicator of health. The reported Azure number does not matter.” | Brent Silvan Jefferies | 08:50–09:27 | | “We made a commitment...to what we believe will be the gold standard for safety on platforms like Roblox, and...we're going to use facial age estimation...” | Dave Bazooki | 13:24–14:08 | | “If you do not invest today...you might head into bigger capacity constraints...these spending plans have been almost entirely put out there. So...this is not a surprise coming in right now.” | Oscar Deshkai | 34:35–35:42 |
Conclusion
Theme:
This episode offers a deep dive into the current dynamic where tech’s “Magnificent Seven” are aggressively investing in AI infrastructure—sometimes to the worry of short-term investors. There’s a clear message that in this AI arms race, not investing is riskier than overspending, with demand for compute expected to double every 9–18 months. Yet, markets remain highly reactive to any signals of uncertain ROI or longer payback periods.
For Listeners:
Expect continued volatility in tech stocks as companies report rising capex and race to roll out AI products, but underlying fundamental growth and market opportunity remain strong for those able to keep up. The episode concludes with anticipation for Apple’s and Amazon’s earnings, all while watching geopolitics and macro policy for clues about the sector’s next moves.