00:00Let's talk about those tech earnings.
00:01Mandeep Singh of Bloomberg Intelligence joins us now with a preview of this week.
00:05We'll see you next week's results and a sneak peek next week as well with Alphabet and Amazon on deck in early February.
00:10Mandeep, welcome to the programme.
00:12What are you focused on when these guys report later this week?
00:15Look, I mean, for me, it's always about cloud growth.
00:20When it comes to the hyperscalers and last quarter, we saw Microsoft hit.
00:2540% growth for their Azure business.
00:28And it was a.
00:30It was created by, you know, AI.
00:32That's where all the CapEx dollars are going.
00:34So you.
00:35We want to see that cloud momentum carry on.
00:38Even Alphabet saw.
00:4035% growth in their cloud segment.
00:42So that to me is the real sort of.
00:45ROI indicator when it comes to these CapEx investments.
00:49The other.
00:50One thing to keep an eye is there was a pushback last quarter on Oracle.
00:55In terms of, you know, their debt really reaching a point where a market felt.
01:00It was reaching a limit, you know, it exceeded their operational cash flow.
01:04So would.
01:05Would there be any other company that would be put in that sort of basket this quarter?
01:10And especially someone like Meta, which plans to spend over $100 billion in.
01:15CapEx with no cloud business.
01:17I would be curious to see how market reacts to.
01:20You know, them raising CapEx.
01:21I mean, obviously their top line growth has been super strong.
01:25But that would be of interest for me in terms of the pushback that market may have, you know.
01:30One company is really spending more on CapEx.
01:32Mandeep, I'm right there with you.
01:34I think that's got to be.
01:35An important one to look for, particularly given what we saw in the final few months of last year.
01:40And what we saw from these guys, the amount they're spending.
01:42Mandeep saw an estimate, a number that came from JP.
01:45Morgan Asset Management, Michael Semblis put this out, that 40% plus of the GDP growth.
01:50It came in the first three quarters of last year, came from the spending of tech companies.
01:55Mandeep, ridiculous numbers.
01:57Do you think with Meta alone, they're an...
02:00Isolated case of weakness, or are you seeing other examples of that in the space?
02:05Look, I mean, all the NeoCloud guys, they're much smaller than a Meta, but...
02:10At the end of the day, you are spending so much up front with the hope that it's going to...
02:15Translate into recurring cloud revenues down the line.
02:18Amazon as well.
02:19Any kind...
02:20A company that is now spending in excess of their operational cash flow.
02:24I think...
02:25It's a fair question to be asked in terms of how long will this last, and then...
02:30What is the recurring revenue down the line that investors can hope for, and if you...
02:35Don't have that visibility, which was the case with Oracle, that's where you start to see push...
02:40So I do think the NeoClouds would also face that kind of scrutiny, and that's...
02:45That's why this CoreWeave-NVIDIA partnership is of significance, because now you have that...
02:50A buffer in terms of, okay, you have some cash that you're getting from NVIDIA to spend.
02:55Mandeep, appreciate your take, as always, sir.
02:57More from Mandeep through the week.
02:59Mandeep Singh there.
03:00Bloomberg Intelligence to build on this conversation.
03:02Mama Q of PSP Growth joins us now for...
03:05Mama, welcome back to the programme.
03:06I'm sure you heard some of the comments from Mandeep Singh just moments ago.
03:09Do you believe this could...
03:10It could be the year of investor pushback.
03:13I think it depends on where you sit.
03:15First of all, good morning.
03:16It's great to be back on the show.
03:18Big week for tech earnings.
03:20Investors are focused on who is at the centre of the AI workload.
03:25We're shifting now from AI in terms of building and training a model to inference, which is...
03:30So if you're sitting at the core of AI infrastructure, like we saw...
03:35With core weave this morning, then you're in a great spot.
03:38We're even seeing this not just in the public market.
03:40But in the private markets, there are a lot of inference market leaders out there, like Together, FAO.
03:45Fireworks Space 10 that are seeing record revenue growth.
03:48So the companies that are positioned...
03:50At the centre of the AI wave in terms of running and execution will be well positioned.
03:55If your strategy is not necessarily at the core of those, if you're still figuring...
04:00Out your AI strategy, then investors are going to have scrutiny over you in terms...
04:05In terms of where all that investment is going.
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