Buy Hold Rant
Ep 13: $MSFT $META $GOOGL Earnings, OpenAI Restructure and the AI Bubble
10/29/2025, 6:51:36 PM
Economic Summary
- OpenAI announced a for-profit public benefit conversion after raising large VC rounds; Microsoft owns ~27% and that stake was priced into MSFT, while OpenAI is estimated at a $12–13B revenue run rate this year with ~300% growth.
- OpenAI reportedly has roughly $800B of multi-year purchase commitments with vendors (NVIDIA NVDA, AMD, Oracle ORCL, Broadcom AVGO); if contractual, those obligations could strain expectations and vendor planning.
- Earnings season shows many tech beats (Microsoft MSFT, Meta META, Google GOOGL) but muted or mixed after-hours market reactions, highlighting sensitivity to guidance and expectations.
- Valuation dislocations: Grindr (GRND) trades at high price/sales while Bumble (BMBL) trades at a low multiple despite similar business economics, suggesting potential market mispricing and a mean-reversion catalyst if profitability is properly communicated.
Bullish
- OpenAI converting to a public-benefit for-profit and rapid revenue growth supports very large valuations.
- Meta beat earnings and is attractive around ~$700 per share given EPS strength.
- Bumble appears profitable on a cash basis and looks deeply undervalued versus peers.
- SoFi posted strong beats and is expanding product lines (credit card) supporting future revenue.
Bearish
- OpenAI's huge vendor purchase commitments (~$800B) may be unsustainable or contractual risk.
- AI hype could form a bubble that corrects investor expectations and valuations.
- Founders/executives selling shares can signal dilution or reduced founder alignment (e.g., RJ/Rivian, Whitney sold some Bumble).
- Non-founder leadership concerns for PayPal (PYPL) weigh on conviction.
Bullish tickers
OPENAIMETABMBLSOFI
Bearish tickers
OPENAIPYPLRIVN
OPENAI
Bullish
Conversion to for-profit public-benefit and rapid revenue growth could justify very large valuations and lift investor sentiment.
Bearish
Large growth and valuation but enormous multi-year vendor commitments create execution and contractual risk.
MSFT
Bullish
Owning ~27% of OpenAI (valuation carry) and strong earnings beat support long-term upside.
Bearish
Microsoft's OpenAI exposure was largely priced in earlier, limiting incremental upside for MSFT alone.
META
2 price targets
700705
Bullish
Beat on revenue and EPS; attractive around $700 with a relatively low PE given earnings.
Bearish
Investor concerns around AI hiring/overspending and guidance can pressure the stock despite beats.
GOOGL
MELI
SBUX
CMG
NVDA
Bullish
Key hardware supplier to AI stack; benefits from rapid AI adoption.
Bearish
Heavy dependency on AI demand could exacerbate cyclicality if AI spending slows.
AMD
ORCL
AVGO
SOFI
Bullish
Beat EPS and revenue, slowly launching credit card with measured underwriting limits.
PYPL
Bullish
Inexpensive company profile could be attractive if execution stabilizes.
Bearish
Non-founder/external leadership cited as a reason for hesitancy among some investors.
HOOD
RKLB
Bullish
Founder trimming positions is standard; still seen as a long-term growth name by hosts.
RIVN
3 price targets
506080
Bullish
If Rivian sells 50k R2 units at ~$50k, it could add ~$2.5B revenue and materially boost growth.
Bearish
Insider share sales (RJ) and execution risk on scaling new models could pressure the stock.
BMBL
3 price targets
678
Bullish
Cash profitability and lower current valuation vs. peers imply substantial upside if market recognizes fundamentals.
Bearish
One-time write-downs have obscured earnings and created short-term negative sentiment.
GRND
Bullish
Founder interest in taking private implies belief in upside relative to public valuation.
Bearish
High price/sales (~7.4x) despite negative EPS raises valuation questions.
AMZN
AAPL
FSLR
COIN
MSTR
LLY
NET
ROKU
TWLO
TEAM
GDDY
People mentioned
DustinAdrianWhitney Wolfe HerdRJ ScaringeHamidElon MuskSatya NadellaSundar Pichai