Back from Hiatus | Capital Markets AI Sales Exec | Focus on AI infrastructure, Energy & Compute | Research & Video breakdowns.
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Joined August 2016
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Ok everybody calm down
$GOOGL CFO:
“Given the supply constraint environment, we started utilizing third-party compute capacity at the end of Q3, and will ramp usage in Q4.”
“Expect margin headwinds in the near term as we utilize this capacity.”
Expect our CapEx to increase significantly in 2027
AI Trade key points from $GOOGL earnings
🔹 Cloud growth accelerating to +100% yoy
🔹 Cloud operating margin increasing
🔹 Capex still being raised for 2027 meaningfully.
The spend on AI and cloud is seeing meaningful and increasing ROI.
I don’t actually think this is a panic moment.
But market might dump on this anyway.
$GOOGL: "our full-year 2026 CapEx guidance range of $195 to $205 billion will remain unchanged. We continue to expect our CapEx to increase significantly in 2027."
Feels like this is what you’re looking at re: Ai trade.
Google Cloud:
🔹 Google Cloud Oper Income: $11.1B (Est. $9.75B) 🟢
🔹 Google Cloud Operating Margin: ~36.2%
If you’re in the ai trade you need to look at this carefully. Market could panic here.
$GOOGL Q3 EARNINGS
• Revenue $127.6B vs Est. $127.9B
• EPS $2.12 vs. Est. $3.01
• Operating Income $40.6B vs Est. $43.2B
• Cloud Revenue $30.7B vs Est. $29.1B
• CapEx $51.4B vs Est. $55.8B
Imagine if one company…
- owned to entire AI infrastructure stack
- distributed other frontier models through their cloud
- sold the other AI labs chips to run their models
- owned part of Anthropic
- and had another business that printed unlimited money to fund it
$GOOGL
Great take by @ParadisLabs
Here’s my pov the actual enterprise AI field:
The future (and present) is model choice based on the job and cost.
Enterprises don’t want to be locked into one provider.
Google is the only cloud that offers all frontier models.
You want to own pipes here long term.
The main takeaway here is that one week OpenAI has the best model, then it's Anthropic, then it's Google, in a never-ending cycle of incramental model improvements.
Feel very lucky to be living through this.
PS: feels like this is an early signal that $GOOGL will announce increased CapEx in Q3 earnings later today.
$FPS just got a $58 target from Clear Street, that’s 130% above where it is now.
As a reminder:
🔹 Recent IPO’d as an AI energy pure play
🔹 Put up a monster quarter, beating rev and EPS
🔹 Announced CFO was leaving and market puked it up, down 25% in a day for no reason.
🔹 Responded by announcing they would again beat high end on REV and EPS and clarifying CFO left for personal reasons.
🔹 Multibillion dollar backlog
I very much believe this is an opportunity.
This company is already cash flow positive. It’s right in the $VRT lane of critical suppliers that power the data centers.
It’s a recent IPO but it’s a roll up of several established companies, so the foundation is already strong.
I wrote the below report when it was trading much higher and it was still cheap.
If you don’t know $AXTI yet, you need to.
I made it very simple.
Broke it down in a 2 minute video covering their product and their business.
They report Thursday. I expect a blowout and huge move.
I spent the last few days digging into $AXTI and the photonics chain.
I made a video overview of everything you need to know heading into earnings this week.
Revenue projects to go from $100M to $700M by 2028
Still a tiny company at $3b market cap but supplies almost every major photonics player and has essentially no competition.
After the October AI pullback, its actually pretty cheap if you believe their projections.
Video covers how $AXTI is upstream from $LITE, $COHR, $AAOI, $FN and others.
I started making these videos a few weeks ago, production quality and speed are rapidly improving. I plan to keep kicking them out.
Follow me if you find these helpful... more on the way.
$SKHY
For those who couldn’t listen to the earnings call, apparently there were some audio issues.
But I’ve prepared comprehensive highlights of managements key takeaways here.
⬇️
$FPS Looks like it’s about to run off this $VRT report.
$FPS, $FIX and $VRT look like the ideal triumvirate of data center foundational stocks.
Power, construction, hvac, cooling.
Huge runway and cash low positive.
Can’t get around them.
$FPS still way down from that CFO turnover market scare.
As a reminder they pre-announced they would beat top and bottom line. It was already cheap.
VERTIV $VRT Q3’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $4.3B (Est. $3.76B) 🟢; +61% YoY
🔹 Adj. EPS: $2.21 (Est. $1.83) 🟢; +78% YoY
🔹 Adjusted Operating Margin: 25.2%; +290 bps YoY
🔹 Organic Orders Growth: 100%+
Raises FY26 Guide:
🔹 Revenue: $14.45B-$14.85B (Est. $14.02B) 🟢
🔹 Adj. EPS: $7.10-$7.20 (Est. $6.74) 🟢
🔹 Adjusted Operating Margin: 23.5%-24.5%
🔹 Adjusted Free Cash Flow: $2.6B-$2.8B
Q4 Guide:
🔹 Revenue: $4.3B-$4.5B (Est. $4.31B) 🟡
🔹 Adj. EPS: $2.22-$2.28 (Est. $2.22) 🟡
🔹 Adjusted Operating Margin: 25.3%-26.3%
Cash Flow:
🔹 Adjusted Free Cash Flow: $652M; +50% YoY
🔹 Operating Cash Flow: $794M; +64% YoY
Segment Net Revenue:
🔹 AMER: $3.0B; +75% YoY
🔹 APAC: $779.3M; +50% YoY
🔹 EMEA: $544.7M; +23% YoY
Other Q3 Metrics:
🔹 Organic Net Sales Growth: 55%
Comments:
🔸 “Our more than 100% organic orders growth year over year and our overall performance are clear testaments to that.”
🔸 “I believe there is a long runway ahead and the opportunity only gets bigger from here.”
$VRT is never talked about and it’s one of the most strategically important steady compounders of the AI trade.
Data center liquid cooling and now moving into energy and other infra services.
Currently only up 8% over the last year while Rev is up +60% with expanding margins.
VERTIV $VRT Q3’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $4.3B (Est. $3.76B) 🟢; +61% YoY
🔹 Adj. EPS: $2.21 (Est. $1.83) 🟢; +78% YoY
🔹 Adjusted Operating Margin: 25.2%; +290 bps YoY
🔹 Organic Orders Growth: 100%+
Raises FY26 Guide:
🔹 Revenue: $14.45B-$14.85B (Est. $14.02B) 🟢
🔹 Adj. EPS: $7.10-$7.20 (Est. $6.74) 🟢
🔹 Adjusted Operating Margin: 23.5%-24.5%
🔹 Adjusted Free Cash Flow: $2.6B-$2.8B
Q4 Guide:
🔹 Revenue: $4.3B-$4.5B (Est. $4.31B) 🟡
🔹 Adj. EPS: $2.22-$2.28 (Est. $2.22) 🟡
🔹 Adjusted Operating Margin: 25.3%-26.3%
Cash Flow:
🔹 Adjusted Free Cash Flow: $652M; +50% YoY
🔹 Operating Cash Flow: $794M; +64% YoY
Segment Net Revenue:
🔹 AMER: $3.0B; +75% YoY
🔹 APAC: $779.3M; +50% YoY
🔹 EMEA: $544.7M; +23% YoY
Other Q3 Metrics:
🔹 Organic Net Sales Growth: 55%
Comments:
🔸 “Our more than 100% organic orders growth year over year and our overall performance are clear testaments to that.”
🔸 “I believe there is a long runway ahead and the opportunity only gets bigger from here.”
S&J Investments retweeted
$MU
Memory bears when they are forced to actually look at the data and listen to executive AI commentary:
(The amount of data you have to ignore to be bearish here is truly astounding at this point.)
$MU comments from KeyBanc conference:
1. Micron are supplying less than half of data center demand.
2. Micron's customers are insensitive to memory prices.
3. Micron highlight multi-year demand with some customers signing LTAs to 2030+.
4. Micron says it will be the only company producing memory in the U.S.
This commentary highlights that there is zero cyclicality. No one's signing LTAs years out under inelastic pricing conditions if you think supply catches up next year.
Useful to remember also that the end of prior memory cycles came because supply > demand, where capacity was built ahead of committed demand.
However, in my opinion, the market has re-rated memory back down towards cyclical valuations.
Regardless of continued price increases and GM expansion, surely Micron etc. deserve to be valued higher purely based on the supply/demand gap that's there to be filled over the coming years?
This list is weighted heavily towards company’s that generate and are expanding free cash flow.
Market is pushing stocks that don’t make cash so I wanted that represented.
$SITM wasn’t on my list but now I’m looking into it…
Top 10 High Beta Stocks for a Snap Back End of Year Rally:
1. $CRDO — Credo Technology
• % Off 52W High: -45.8%
• Beta: 3.25
• Gross Margin: 67.1%
• Free Cash Flow: $439M TTM → $1.17B Proj FY27 (+166%)
2. $AXTI — AXT Inc.
• % Off 52W High: -59.3%
• Beta: 1.86
• Gross Margin: 32.2%
• Free Cash Flow: +$3.6M Last Q (Flipped FCF+) → $70.2M Proj FY27 (+393%)
3. $AEHR — Aehr Test Systems
• % Off 52W High: -56.6%
• Beta: 3.07
• Gross Margin: 34.7%
• Free Cash Flow: +$1.1M Last Q (Flipped FCF+) → $16.2M Proj FY27 (+275%)
4. $ALAB — Astera Labs
• % Off 52W High: -42.6%
• Beta: 3.69
• Gross Margin: 75.1%
• Free Cash Flow: $277M TTM → $1.26B Proj FY27 (+355%)
5. $FPS — Forgent Power Solutions
• % Off 52W High: -59.1%
• Beta: 3.87
• Gross Margin: 31.4%
• Free Cash Flow: +$19.1M Last Q (Flipped FCF+) → $283M Proj FY27 (+270%)
6. $MU — Micron Technology
• % Off 52W High: -26.0%
• Beta: 2.23
• Gross Margin: 80.7%
• Free Cash Flow: $59.0B TTM → $135.8B Proj FY27 (+130%)
7. $SITM — SiTime Corp.
• % Off 52W High: -45.6%
• Beta: 2.88
• Gross Margin: 58.7%
• Free Cash Flow: $84M TTM → $548M Proj FY27 (+555%)
8. $WDC — Western Digital
• % Off 52W High: -52.4%
• Beta: 2.17
• Gross Margin: 52.6%
• Free Cash Flow: $4.29B TTM → $7.59B Proj FY27 (+77%)
9. $BE — Bloom Energy
• % Off 52W High: -37.8%
• Beta: 3.78
• Gross Margin: 32.3%
• Free Cash Flow: $440M TTM → $1.30B Proj FY27 (+196%)
10. $LITE — Lumentum Holdings
• % Off 52W High: -24.2%
• Beta: 1.54
• Gross Margin: 41.7%
• Free Cash Flow: $551M TTM → $1.16B Proj FY27 (+110%)
Honorable Mentions:
• $SNDK (Scored #1 mathematically at -44.6% off 52W high, 5.22 Beta, 71.5% GM, $11.5B TTM → $30.8B Proj FCF—moved here since I already have $MU and $WDC in the Top 10 and there’s too much noise around memory right now)
• Next up (#11–#16): $LSCC, $VICR, $STX, $ONTO, $VRT, $MRVL
• Growth-CapEx Outlier: $NBIS (-43.2% off 52W high, 1.46 Beta, 74.3% GM, +$5.26B TTM Operating Cash Flow)
🔷 Methodology:
We screened 115 AI Infrastructure names across 4 equal 25-point pillars: 52-Week High Displacement & Beta (25%), Forward Revenue Growth (25%), Forward PEG & Gross Margin (25%), and Free Cash Flow Generation & FY27E FCF Growth (25%).
🔷 Because this market is ruthlessly punishing cash-burning story stocks, we enforced a strict Free Cash Flow Gate:
Every stock in the Top 10 must either be TTM FCF-positive today or have already flipped FCF-positive in its most recent quarter with explosive FY27 cash flow expansion ahead. That immediately filters out heavy cash-burn traps and isolates the beaten-down, high-beta AI bottlenecks that actually print cash when the tape turns.
S&J
🔷
Top 10 High Beta Stocks for a Snap Back End of Year Rally:
1. $CRDO — Credo Technology
• % Off 52W High: -45.8%
• Beta: 3.25
• Gross Margin: 67.1%
• Free Cash Flow: $439M TTM → $1.17B Proj FY27 (+166%)
2. $AXTI — AXT Inc.
• % Off 52W High: -59.3%
• Beta: 1.86
• Gross Margin: 32.2%
• Free Cash Flow: +$3.6M Last Q (Flipped FCF+) → $70.2M Proj FY27 (+393%)
3. $AEHR — Aehr Test Systems
• % Off 52W High: -56.6%
• Beta: 3.07
• Gross Margin: 34.7%
• Free Cash Flow: +$1.1M Last Q (Flipped FCF+) → $16.2M Proj FY27 (+275%)
4. $ALAB — Astera Labs
• % Off 52W High: -42.6%
• Beta: 3.69
• Gross Margin: 75.1%
• Free Cash Flow: $277M TTM → $1.26B Proj FY27 (+355%)
5. $FPS — Forgent Power Solutions
• % Off 52W High: -59.1%
• Beta: 3.87
• Gross Margin: 31.4%
• Free Cash Flow: +$19.1M Last Q (Flipped FCF+) → $283M Proj FY27 (+270%)
6. $MU — Micron Technology
• % Off 52W High: -26.0%
• Beta: 2.23
• Gross Margin: 80.7%
• Free Cash Flow: $59.0B TTM → $135.8B Proj FY27 (+130%)
7. $SITM — SiTime Corp.
• % Off 52W High: -45.6%
• Beta: 2.88
• Gross Margin: 58.7%
• Free Cash Flow: $84M TTM → $548M Proj FY27 (+555%)
8. $WDC — Western Digital
• % Off 52W High: -52.4%
• Beta: 2.17
• Gross Margin: 52.6%
• Free Cash Flow: $4.29B TTM → $7.59B Proj FY27 (+77%)
9. $BE — Bloom Energy
• % Off 52W High: -37.8%
• Beta: 3.78
• Gross Margin: 32.3%
• Free Cash Flow: $440M TTM → $1.30B Proj FY27 (+196%)
10. $LITE — Lumentum Holdings
• % Off 52W High: -24.2%
• Beta: 1.54
• Gross Margin: 41.7%
• Free Cash Flow: $551M TTM → $1.16B Proj FY27 (+110%)
Honorable Mentions:
• $SNDK (Scored #1 mathematically at -44.6% off 52W high, 5.22 Beta, 71.5% GM, $11.5B TTM → $30.8B Proj FCF—moved here since I already have $MU and $WDC in the Top 10 and there’s too much noise around memory right now)
• Next up (#11–#16): $LSCC, $VICR, $STX, $ONTO, $VRT, $MRVL
• Growth-CapEx Outlier: $NBIS (-43.2% off 52W high, 1.46 Beta, 74.3% GM, +$5.26B TTM Operating Cash Flow)
🔷 Methodology:
We screened 115 AI Infrastructure names across 4 equal 25-point pillars: 52-Week High Displacement & Beta (25%), Forward Revenue Growth (25%), Forward PEG & Gross Margin (25%), and Free Cash Flow Generation & FY27E FCF Growth (25%).
🔷 Because this market is ruthlessly punishing cash-burning story stocks, we enforced a strict Free Cash Flow Gate:
Every stock in the Top 10 must either be TTM FCF-positive today or have already flipped FCF-positive in its most recent quarter with explosive FY27 cash flow expansion ahead. That immediately filters out heavy cash-burn traps and isolates the beaten-down, high-beta AI bottlenecks that actually print cash when the tape turns.
S&J
🔷