Transcript
John (0:00)
You're watching TVPN. Today is Wednesday, April 29, 2026. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital. What a day in financial markets and technology markets. There is a ton of news today. Gurgavan summed it up well, huge day tomorrow. He's posting this yesterday. 10:00am Canada interest rate decision 2:00pm this is Eastern time USA interest rate decision that is in Fed held rates constant. So sort of a nothing burger I guess. Not the best news. I think some people were hoping for a cut but everyone sort of expected this. It met expectations. But the news is that just five minutes ago the Federal Reserve has kept interest rates on hold at a range of 3.5 to 3.75% at Wednesday's meeting. And Jerome Powell is giving a speech in just 30 minutes at 2:30 Eastern. Then at 4pm Google earnings, Amazon earnings, meta earnings and Microsoft earnings. It is a massive no big deal.
Jordi (1:11)
They only represent just under 20% of the total market cap of the S&P 500.
John (1:18)
Let's go. All reporting within but people are optimistic. Semi analysis put out a note this morning According to YC Yield Chad expecting hyperscaler capex to be revised upwards and beat stream expectations as hyperscaler cloud revenue is accelerating and they are seeing positive ROI on cloud investments. I can go through my earnings preview. It's a tech earnings quad kill today and the big question is just how is the AI buildout going? Obviously the CapEx numbers were huge the first time ever We've seen a $200 billion number from Amazon last quarter but everyone's up in the. Is there even a word for triple? It's like what, 11 digits or something like that. 100 billion. Everyone's in. Everyone's spending at least 100 billion these days. At least if you're in the mag seven and but financial performance has actually been strong even in sort of legacy areas such as search. Google search is growing E commerce sales, Amazon core businesses growing enterprise software seats. Microsoft 365 we're going to have more news on all of that. Even though all of those businesses they're working, they're chugging along. The big question is around durable revenue tied to AI infrastructure because you have this matching problem. You spend a bunch of money, there's depreciation. When do you actually get the cash flow back? How durable is this revenue? What are the moats around this revenue? What do growth rates and margins look like in this new era of something that looks maybe a Little bit more like a railroad business, an oil business, as opposed to something like you build a website, people just show up and it's 80% margin, which was the dream of the previous software era. We're going into an entirely different era, but it is very exciting and we're getting a lot of data today. So everyone has seen cash flow from these hyperscalers to Nvidia to power companies to data center builders. But everyone's wondering what's the exact conversion cycle to higher revenues and higher profits? What's the pathway? There's because you don't want to just be drawing down on cash endlessly, eventually you stop making money entirely. So let's start with Google. Google has the most fully integrated AI stack arguably they have consumer distribution, they have model training with DeepMind, they have custom chips with the TPU and a bunch of product services where they can stuff AI features. Google Workspace, Google Workspace, Underrated Search, YouTube, Android Cloud. They can deploy solutions all over the place. And so the flywheel should be spinning very, very quickly. The key question that investors are asking is does AI change the unit economics of search too quickly? Does AI do LLMs do AI search overviews? Gemini generally, are they able to monetize those results fast enough to offset any potential declines in search ad revenue? And so people will be looking, how is search monetizing? How are the new AI disruptors monetizing? But there are tons of places to pick up growth. Even if growth does slow down in the core search business, tons of opportunity in cloud. But the question again is AI overviews in Gemini, are they expanding search usage, are they increasing ad ROI or are they compressing the model, the financial model? And so Microsoft is also coming off a strong quarter. Honestly, everyone's coming off strong quarters. Everyone's doing very well. Revenue is up 17% at Microsoft with Cloud, which includes Azure M365, some LinkedIn stuff, it's a big bucket cloud. Microsoft cloud is growing at 26% but if you dive in and you double click on Azure, Azure is growing at 39%. And of course Azure is a bigger lever on capex which is run rating around 150 billion. Not bad. The biggest number in the Microsoft earnings is RPO. Remaining performance obligations. Last quarter it was listed at 625 billion, up 110%. That was the eye popping number of the last earnings. About 45% of that is coming from OpenAI. But they have lots of other partners that have signed on for really long compute contracts and that is starting to show up in the financials saying hey, we're spending all this capex but we have this RPO and we have these deals signed where companies are. It's not just us that we're forecasting some really high growth here. The entire industry is forecasting high growth. And so we have done deals to justify the capex that we're spending right now, even with depreciation, which seems like a less of an issue than people thought it was since H100 still seem to be monetizing just fine. But we can go into that. So Microsoft has the cleanest read on enterprise AI monetization, which I think is something people have been really looking for numbers. They know that subscription LLM chat apps monetize at a decent rate, that the margins at a lot of these companies are okay, the token the APIs are working. But what does it actually mean to deploy AI into the American economy, into everyday businesses, into large scale businesses? All of those businesses are on Microsoft overwhelmingly. And so there are a ton of data points that can help you understand how AI is flowing through the global economy, but also the American economy. So what are we talking about specifically Azure growth? How much cloud hosting is going on, gross margins for Microsoft cloud. That's very important. Are you seeing cloud compression? Because if you go to to your Microsoft cloud provider and you say hey I'm going to this teams thing, I'm paying a lot of money for it. I actually vibe coded something you got to give me a discount that would show up in cloud margins. Will it show up? I don't think it will, but we'll see. I think it's going to be fine. Copilot Adoption and arpu. How much are they actually rolling these out? Are they actually getting incremental spend? Are companies willing to send more of their hard earned dollars to Microsoft for better AI services, better features, copilots, then M365 seat growth, that's a really important one. Are people adding more seats? Are they hiring? Like we've seen some layoffs in big tech, but how is the overall economy doing? How many more seats are being rolled out? Again with the question of does your AI agent need a seat and so you have more seats or does your AI agent replace 20 seats and then you only have one seat and you have 20 agents that are all logging in through the same M365 seat. These are more long term questions, but we're getting an early read today. GitHub copilot momentum. This will all paint a picture of what is happening with AI Adoption in enterprises broadly. Interestingly, Copilots at Microsoft, it hasn't been the Most hyped product. GitHub Copilot early, very, very early to the party. Huge run rate rocketed up to 500 million ARR very, very quickly. But the horse race has always been Windsurf Cognition and Cursor and Codex and Claude Code and the battle, the startups for the most part, Gemini's been in there. GitHub Copilot has felt like it hasn't been dominating the narrative, but we're gonna find out. Is it still growing? Because the market is really, really big. It's possible that everything's growing even if there's a horse race back and forth between the leading labs. And so there will be a bunch of other questions answered around how nuanced is the diffusion adoption question. So Microsoft has an incredible go to market team, incredible go to market motion, enterprise sales motion. And so is there an advantage that they have that they can press GitHub copilot even if it's not the sexiest product next to whatever's hot this week? Can they get that into Slack and teams? Right, same thing. Yeah. Yeah, Slack was definitely like the hot one, the hyped one and teams wound up doing very well. And so. So we'll get a stronger read on what's going on there. And then of course that M365 seat growth will tell us a lot about what does the future look like for seat based enterprise software, the SaaS model, broadly. Because if all of a sudden that's falling off a cliff, well, it probably doesn't look good for other seat based SaaS companies. For Amazon, everyone wants to see strong AWS acceleration to justify the MAG7 topping capex numbers. They got it at 200 billion in capex in 2026. So expect a lot of focus on AWS revenue growth and margins. Q4 was healthy though. Net sales up 14% for Amazon, AWS growing at 24%. The sneakily huge ads business over at Amazon grew 23% to $21.3 billion. They're almost making $100 billion a year just on ads. That's remarkable. And that's a lot of cash flow to fund CapEx and other AI initiatives. And so operating income overall was 25 billion for last quarter and they generated free cash flow of 11.2 billion. So still huge cash flows. They're obviously drawing down on those. And that 11.2 billion number was down because of increased AI spending. So if AWS accelerates all the CAPEX looks like buying scarce capac ahead of demand. Like they will be GPU rich or just compute rich Generally at a time when it's good to be GPU rich and compute rich and they will look like geniuses. So people are hoping for strong AWS acceleration. Consensus for AWS revenue is around 36.7 billion with growth in the mid 20% range. But the market's really hoping that it starts at the 3. Everyone's hoping for 30%, something like that at least this year. At some point point re acceleration would be a treat for the market. Lastly, Meta. Meta's in an interesting spot. Super clean Q4. Nothing really to prove today. Despite all the FUD, all the fear, uncertainty and doubt around the talent wars. New team members, the new lab, sometimes clunky model releases they didn't get behemoth out. Different adoption of Meta Vibes, the video app. There's been all these questions about the AI strategy. All of that needs to be put to the side in the face of just AI is already working for Meta