Pressure Points

Pressure Points: Hyperscalers Double Down on AI Capex

The bottom line on the capex outlook, we’re early in the AI buildout. Three of the four hyperscalers hiked their AI spending outlook. I expect in CY26 will come in up closer to 80% vs. up Street expectations of up 64% going into tonight. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

• Transcript

Pressure Points: Meta 1Q'26 Earnings

Meta can’t shake the capex bears. Growth of 33% was better than the whisper of 32%. Guided June to 28% vs. Street at 25%. Investors opted instead to focus on capex growth this year going to 93% growth compared to previous expectations of 73%. I see the concern overblown. Meta has shown they can meaningfully accelerate revenue from capex. March of 25 it was up 16%. This June it will grow 28% plus. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: Google 1Q'26 Earnings

Investors shrugged off the higher capex guide for 2027 because Google Cloud is gaining meaningful marketshare, and Search is at an “expansionary moment” which means Search growth this year will be closer to 17% vs. the Street currently at 13%. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: Microsoft 3Q'26 Earnings

Postive comments about Azure growing at 40% in June vs 39% in March was offset by them talking about the elephant in the room, the need for a new monetization model for software that is usage based. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: Amazon 1Q'26 Earnings

Sounds like they’re keeping capex outlook unchanged. Up 48% y/y in CY26 compared to up 59% in CY25. The kicker is outside of AWS, they still have not had their AI moment. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: Tesla 1Q'26 Earnings

Shares of TSLA sold off on the increased capex comments. It should have traded up because it supports the company’s long-term vision. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: Tim Cook Stepping Down as Apple CEO

Tim crushed it as CEO of Apple. Ternus has an opportunity to supercharge Apple’s multiple by changing the narrative, which is the biggest opportunity in big tech. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com

Pressure Points: SpaceX IPO & Sovereign AI

For the deep dive on our SpaceX Is Building the World’s First Sovereign AI thesis, check out Doug Clinton and I on Pressure Points. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit deepwatermgmt.substack.com