Motley Fool Money – "Big Tech Earnings and Reckless Predictions"

Date: November 3, 2025
Host: Tim Byers
Co-hosts: Rick Benares, San Migueo

Episode Overview

This episode dives into the latest earnings reports from the major “Big Tech” companies, analyzing key trends, surprising details, and what it all reveals about the broader market and economy. The hosts break down individual company performance (Meta, Alphabet, Microsoft, Amazon, Apple), share personal observations, and close with "reckless predictions" for the future of technology and investing.

Macro Themes in Big Tech Earnings (00:35 – 03:21)

Key Points:

• Relentless AI & Cloud Scaling: Microsoft to raise AI capacity by 80% and double data center footprint in two years.
• Legal Headwinds: Apple faces fresh antitrust lawsuits.
• Capital Intensity: Amazon’s 2025 cash CAPEX forecast is $125 billion—and growing.
• Market Strength: Big Tech firms widen their lead over the S&P 500 and Russell 2000.

Notable Quotes:

• “Relentless scaling of all of the AI cloud infrastructure... Microsoft will increase total AI capacity by 80% this year...”
  — Tim Byers (00:35)
• “The rich keep getting richer... you continue to see the Mag 7 or in this case the Big Tech 5... continue to outpace the S&P 500…”
  — Rick Benares (01:44)
• “A bifurcated economy where you have... big tech companies spending a lot, making a lot... but then you have the consumer... struggling.”
  — San Migueo (02:39)

Memorable Light Moment:

• Joking about Chipotle as a "tech company" because of its burrito-wrapping “wizardry.”
  (03:27–03:41)

Outlier Insights from Individual Earnings Reports

Meta (04:07 – 04:43)

• Highlight: Joint venture with Blue Owl Capital to co-develop a Louisiana data center campus—structured off-balance sheet.

• Concerns Raised: Off-balance sheet financing invokes memories of Lehman Brothers and risky financial engineering.

  • “It’s going to be off balance sheet and that always worries... as I worked at Lehman Brothers and we had off balance sheet mortgage companies. Need I say more?”
    — San Migueo (04:07)

Alphabet (Google) (05:12 – 06:01)

• AI Search Impact: Despite fears that AI search answers would reduce ad clicks and SEO value, ad revenues remain strong.

• Massive Cloud Growth: Cloud business backlog up 82% year-over-year, now 10x annual cloud revenue.

  • “Every time I’m on Google... I get these nice AI responses.... So I’m not clicking on ads... Alphabet has to feel the pain...[but] they haven’t.”
    — Rick Benares (05:12)

Microsoft (06:25 – 06:52)

• Surprise Loss: $4.1B net loss from its OpenAI stake, despite others making money from similar bets.

• Aggressive CapEx: $34.9B, with 50% spent on GPUs—demonstrating commitment to AI and cloud.

  • “OpenAI is in full court press, spend it all as soon as we get it mode. And that is having some tail risk, I guess, for Microsoft.”
    — Tim Byers (06:52)

Amazon (07:39 – 09:50)

• Steady Acceleration: Sales growth re-accelerates to 13% after modest growth years.

• AWS & Margins: AWS continues to drive profits; international business also outpaces US growth.

• Anthropic Valuation: $9.5B one-time gain from revaluing its stake in Anthropic.

• Server Depreciation Shift: Reduced depreciation life for servers from 6 to 5 years—a rarity—implying increased refresh and spending cycles.

  • “Amazon is slowly, gradually starting to pick up momentum. It’s like an old car that’s just starting to pick up speed here.”
    — Rick Benares (07:39)
  • “Amazon decided... to reduce the useful life of their servers and networking gear... from six years down to five. That is very rare.”
    — Tim Byers (08:27)

• Retail as Foundation: Amazon leverages deep consumer data, treating retail as a "loss leader" for higher-margin businesses.

  • “They’re putting together these pieces and I feel like sometimes they’re playing 3D chess.”
    — San Migueo (09:50)

Apple (10:51 – 11:46)

• AI Catch-Up Needed: Apple seen as falling behind in generative AI arms race, with Siri and AI features lagging.

• Services Edge: Services now a $100B+ annual revenue stream, outpacing hardware growth.

• Tariff Uncertainties: Tariffs could impact key business lines.

  • “What I worry about... is... are they falling behind in the AI race and how are they going to... capture the fact that everyone's walking around with a device ... that could have embedded AI?”
    — San Migueo (10:51)

Reckless Predictions Segment (12:54 – 18:16)

The panel shares bold, long-range forecasts—knowing full well they may be wildly wrong, but aiming to broaden their own thinking.

Rick Benares (13:52)

• Prediction 1: "MAG7" (now six tech firms plus Tesla) will break up in three years, just as the "FANG" moniker became outdated.

• Prediction 2: Within five years, an unexpected, currently unknown player will become a major force in AI—possibly even Apple, or an international newcomer.

  • “My bigger prediction... within five years there is going to be a major player in AI that isn’t even on anyone’s radar right now... Maybe even Apple... Maybe Apple becomes that major AI play, but I think it’ll be unexpected…”
    — Rick Benares (15:46)

San Migueo (15:49)

• Prediction: Amazon will unify its consumer and AI businesses through Alexa Plus and its "ambient AI" approach, managing more of users’ daily lives and services—driving a new, high-margin subscription layer that could push Amazon’s valuation to $4 trillion.

  • “I think they’re about to unify both... through their... Alexa Plus... ambient AI strategy... AI will start managing users’ homes... and it kind of creates a... high margin subscription and services layer.”
    — San Migueo (15:49)

Tim Byers (16:44)

• Prediction: Big Tech R&D spending will outpace capex within the next three years, driven by the need for software and AI innovation. The "Distinguished AI Engineer" title will become a coveted, top-dollar Silicon Valley position.

  • “…Big tech R & D expense will start to scale faster than capex in the next three years... distinguished AI engineer is going to become a serious thing and it's going to pay a lot, a lot of money.”
    — Tim Byers (16:44)

Additional Highlights & Tone

• The discussion was lively, with the hosts fusing sharp analysis and humor ("Guacamole is biotech in and of itself"—Tim Byers, 03:41).
• They emphasize humility in forecasting ("The point... is to give yourself a frame for how you're going to look at a market... when your reckless prediction goes wildly wrong... you start learning things." — Tim Byers, 12:54).
• The show maintains a casual, accessible tone—balancing in-depth market insight with self-aware investing commentary and jokes.

Key Timestamps

| Timestamp | Topic / Segment | |-----------|----------------------------------------------| | 00:35 | Macro themes in Big Tech earnings | | 04:07 | Meta’s off-balance sheet data center JV | | 05:12 | Alphabet’s ad & cloud business dynamics | | 06:25 | Microsoft’s OpenAI-driven net loss & CapEx | | 07:39 | Amazon’s re-acceleration & infrastructure | | 09:50 | Apple’s AI lag and Services business | | 12:54 | "Reckless Predictions" segment begins | | 13:52 | Rick’s predictions (MAG7 and AI disruptor) | | 15:49 | San’s prediction (Amazon ambient AI) | | 16:44 | Tim’s prediction (R&D overtakes capex, AI engineers) |

Conclusion

This episode provided a thorough, entertaining review of the big tech earnings wave, highlighting how AI, capital investment, and business model adaptation are shaping the future for tech giants. The reckless predictions segment encouraged listeners to consider how quickly technology leadership and market dynamics can shift—sometimes in unexpected directions.