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AI upside remains missing in latest earnings spate
11/5/2025, 8:48:43 PM
Economic Summary
- Markets may be at an inflection point where AI spending and valuations are being scrutinized; investors will prioritize companies converting AI headlines into real revenue, increasing downside risk for firms that can't demonstrate monetization.
- AMD (AMD) beat earnings and guidance but its Q4 guide disappointed whispers; AI upside remains absent even after giving roughly 10% equity to OpenAI to secure business, raising questions about the economic return on that deal.
- Hyperscalers are bifurcating: Amazon (AMZN) and Alphabet (GOOGL) were rewarded for AI infrastructure spending and custom chips that boosted cloud growth, while Microsoft (MSFT) and Meta (META) sold off due to lost OpenAI compute rights and heavy spending without clear cloud revenue.
- Google's in-house model Gemini (GOOGL) is reportedly set to power a revamped Siri in a deal with Apple (AAPL) worth $1 billion a year, representing a tangible revenue stream and strategic product integration for Google.
Bullish
- Amazon rewarded for AI infrastructure and custom chips driving cloud growth
- Alphabet's Gemini plus a reported $1B/year Siri deal with Apple provides direct revenue upside
- Oracle, Broadcom, and NVIDIA surged on AI partnership headlines
- Hyperscalers' custom chips help offset the 'NVIDIA tax' on AI compute
Bearish
- AI valuations face increased scrutiny, risking multiple compression if revenue doesn't follow hype
- AMD's AI revenue upside is missing despite beating earnings; 10% equity given to OpenAI raises ROI concerns
- Microsoft lost right of first refusal on OpenAI compute deals, reducing its AI competitive advantage
- Meta is spending like a hyperscaler without a cloud business to monetize that spending
Bullish tickers
ORCLAVGONVDAAMZNGOOGLAAPL
Bearish tickers
AMDMSFTMETA
ORCL
Bullish
Surged on AI partnership momentum and investor enthusiasm for infrastructure plays.
Bearish
AI valuation scrutiny could pressure Oracle despite AI partnership headlines.
AVGO
Bullish
Broadcom rallied as investors priced in AI-related partnerships and demand for infrastructure.
Bearish
AI hype could be re-rated if revenue growth doesn't materialize for Broadcom.
AMD
Bullish
Beat earnings and guidance and secured OpenAI business, indicating customer traction.
Bearish
AI upside missing in results; Q4 guide light and gave ~10% equity to OpenAI, raising ROI concerns.
NVDA
Bullish
Surged on OpenAI partnerships and strong demand for AI compute.
Bearish
Hyperscalers building custom chips can offset NVIDIA's advantage, making valuations vulnerable.
AMZN
Bullish
Rewarded for AI infrastructure spend and custom chips that boosted cloud growth.
Bearish
Heavy infrastructure spending could be scrutinized if revenue doesn't scale commensurately.
GOOGL
Bullish
Custom chips and Gemini model drove cloud growth; reported $1B/year Siri deal with Apple adds clear revenue upside.
Bearish
AI valuation pressure remains a risk if monetization expectations are unmet.
AAPL
Bullish
Reportedly partnering with Google to use Gemini for Siri, implying product improvement and strategic alignment.
Bearish
Not directly discussed as a revenue driver; potential risk if integrations underperform.
MSFT
Bullish
Still benefits from a strong cloud business and enterprise positioning despite the OpenAI compute development.
Bearish
Sold off after reports; lost right of first refusal on OpenAI compute deals, reducing a strategic advantage.
META
Bullish
Investing heavily in AI infrastructure which could pay off if monetization paths emerge.
Bearish
Spending like a hyperscaler without a cloud business to monetize that spend, prompting investor concern.
People mentioned
Mackenzie SegalosScott