00:00What is the number one thing? Is it basically justifying the big CapEx that we're going to be looking at
00:04for today?
00:05That's one of the biggest questions we've gotten going into it is, you know, are these companies going to raise
00:11their fiscal 26 CapEx guide?
00:15And the precedent from last year would would say yes, because last year, as the year was progressing, the CapEx
00:23kept rising in absolute dollar terms.
00:25But going into it, we actually kept our CapEx forecast for Alphabet, Amazon and Meta intact.
00:32We're right around where they guide it.
00:35And the main reason is they gave themselves wiggle room when they set the CapEx guide at the 4Q prints.
00:41And what I mean by that is Amazon exited 2025 at about a little over $150 billion of CapEx.
00:49They set their CapEx guide at $200 billion for fiscal 26.
00:53Alphabet gave themselves more room.
00:55They exited over $110 billion.
00:57They got it to $180 billion at the midpoint.
01:00And Meta, it was a similar kind of story.
01:02They gave themselves $40, $50 billion of wiggle room, which are big dollars and gives the companies an opportunity to
01:09have CapEx step up over the year.
01:12But yeah, so we don't think they're going to raise.
01:15Some investors have said, oh, maybe, you know, kind of Alphabet and or Meta raises at the low end.
01:20But we're either at the midpoint or high end for all the guides.
01:24So but that is going to be, you know, a big one for tonight.
01:28And it's obviously a big night, as you alluded to.
01:30Was yesterday instructive at all, John, for understanding how this market might react?
01:34Just a Wall Street Journal story about Sarah Fryer and OpenAI questioning or discussing not being able to hit the
01:41internal targets and that being enough to cause a market sell-off.
01:44Does it feel like we're just at a very fragile moment that not getting close or even just meeting expectations
01:49is just not enough?
01:51Yeah, it's a good question.
01:54I think tonight we're going to get some data points that are going to be impactful one way or the
01:59other for the stocks.
02:00And I would go to just talk about Amazon and Alphabet here, their cloud businesses.
02:05Another big topic will be what is the revenue growth at AWS?
02:10What is the revenue growth at Google Cloud?
02:12At AWS, investors are looking for high 20s, low 30 percent revenue growth versus 24 percent in 4Q.
02:20And that growth is being driven by their AI stack and their core business.
02:26And one thing, one positive in CEO Jassy's shareholder letter from a couple of weeks ago, he said, oh, you
02:33know, AWS AI revenue is at a $15 billion run rate, which is more than what we had modeled.
02:39So I thought that was instructive and helpful, but that's a key number tonight, AWS top line growth.
02:44And then Google Cloud saw a massive acceleration in revenue growth in 4Q.
02:49And investors are looking, it grew 48 percent year over year.
02:53Investors are looking for mid-50s to mid-60 percent growth.
02:56So another big step up acceleration in Google Cloud revenue growth.
03:00And that's been driven by their AI stack, their leading model, Gemini, their chips.
03:06And the other thing that's interesting about Google Cloud that's instructive as well is last year they signed more $1
03:15billion deals than the prior three years combined, which gives us a little insight into the demand for their cloud
03:22business and also kind of governs what they're spending on CapEx because they're doubling CapEx this year.
03:28Hey, John, I got less than a minute here, but I just wonder how much you're going to hear from
03:32these companies about efficiencies.
03:33The news, for example, from Meta to cut 10 percent of its workforce.
03:37Will that also be a defining feature?
03:41Yeah, we'll get headcount.
03:43You know, we'll get headcount.
03:45It's a little bit skewed because with the rising CapEx, you have rising depreciation, which we're going to see.
03:51And that's expected.
03:53Meta actually guides to a full year OpEx guide.
03:58So I think people are going to are looking to see are they going to are they going to cut
04:01that at the low end because of these headcount cuts.
04:05But yeah, and it'll be interesting to see what the margins look like.
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