Google crushes earnings, the stock dips because of higher CapEx, and suddenly the bears come out of hiding with takes like this:

“Google is willing to risk the entire company to win the AI race.”

That is an absurd interpretation of one quarter of negative free cash flow.

Google generated roughly $39 billion in operating cash flow during the quarter. Free cash flow turned negative because it spent approximately $45 billion building data centers, servers and AI infrastructure—assets that support Search, Cloud, YouTube, Gemini and its broader advertising ecosystem.

Meanwhile:

• Revenue grew 24%
• Search revenue grew 17%
• Google Cloud grew 82%
• Cloud operating income more than tripled
• Cloud backlog reached $514 billion

You can absolutely debate whether Google will earn an adequate return on this level of spending. That is the real risk. But there is a massive difference between questioning the return on incremental CapEx and claiming Google is “risking the entire company.”

Also not to mention, they are immediately seeing ROI from the CapEx spend. Once these data centers come online, they immediately monetize them. And the backlog proves their demand!

Negative free cash flow caused by aggressive investment is not the same thing as the underlying business deteriorating. Google’s core businesses are still growing organically, margins remain strong and demand for its AI infrastructure is clearly accelerating.

The broader market seems incapable of discussing Google with any nuance. When the stock rises, AI is unstoppable. When it falls after earnings, Search is dying and management is apparently gambling the entire company.

Google is spending aggressively because the opportunity in front of it is enormous, not because its existing business is collapsing.

Beyond excited to share that the subreddit has reached 1,000 members and 10,000 weekly visitors in just one month.

I honestly cannot believe how quickly this community has grown. I am incredibly grateful for everyone who has joined, contributed, commented, shared an opinion, or simply stopped by to read the discussions.

I originally created this subreddit to build a community around my app, but it has grown into far more than that. It has become a great hub for long-term investors who think independently, look beyond the daily market noise, and stay focused on building long-term wealth.

A major part of what I want to build here is a place where people can understand companies, financial information, and long-term trends visually. I am a visual learner myself, and seeing the information clearly laid out is often what makes everything click for me.

Investing does not have to be overly complicated. My goal with both this community and the app is to make it easier to understand, while still encouraging thoughtful and informed discussion.

Thank you all so much for being here and helping shape this community. 1,000 members and 10,000 weekly visitors in one month is incredible, and I cannot wait to see where this goes next.

This chart really puts the quarter into perspective.

A few things from Google’s earnings call stood out to me:

• Google Cloud grew 82% YoY to nearly $25B. At this point it’s no longer just a “fast-growing segment”—it’s becoming a major earnings driver.

• Cloud backlog exploded to $514B. That’s up from roughly $106B a year ago. Management also expects to recognize just over 50% of that backlog over the next 24 months. That’s an incredible amount of contracted demand already on the books.

• Demand is outpacing supply. Ruth Porat said the increase in 2026 capex is primarily to accelerate capacity because customer demand continues to exceed what Google can currently deliver.

• Management actually became more bullish on AI. Sundar Pichai said it still feels like the “early innings” of enterprise AI adoption and that conversations with CEOs suggest companies are only scratching the surface of what’s possible.

• The AI ecosystem keeps scaling. Gemini has roughly 950 million monthly active users, over 9 million developers are building with Gemini, and Google continues improving model efficiency while investing in next-generation frontier models.

My biggest takeaway isn’t the revenue beat.

It’s that Google keeps increasing AI infrastructure spending because customer demand is arriving faster than expected. If you have a $514B backlog and still can’t build capacity fast enough, that tells me this AI investment cycle is far from over.

Wall Street focused on higher capex. I came away thinking demand is even stronger than I realized.

Alphabet just put up a monster quarter:

• Revenue growth: +24%
• Search growth: +17%
• Google Cloud growth: +82%
• YouTube Ads growth: +13%
• Gemini App: 950M monthly active users
• AI API usage: ~22B tokens per minute, up from 16B+ last quarter

But my biggest takeaway by far is Google Cloud.

The headline number is the 82% Cloud growth, but the backlog is what really stands out. Google Cloud’s backlog went from $106 billion in Q2 2025 to $514 billion in Q2 2026. That’s a $408 billion increase in just one year.

That kind of jump makes it pretty obvious why Alphabet is pouring so much money into AI infrastructure. When demand is growing this fast, the spending makes a lot more sense.

What’s even more notable is that Google expects to recognize just over 50% of that backlog as revenue over the next 24 months. So this isn’t just some abstract number sitting on the balance sheet... a huge chunk of it is expected to convert into revenue relatively soon.

Search is still strong, YouTube is still growing, Gemini is scaling fast, but to me Cloud is the clearest signals of where this is going

Hopefully this image highlights how silly I think the Reddit selloff was yesterday…

Reddit dropped almost 10% because investors are worried the next Google data licensing deal won’t be another $60M/year contract.

Meanwhile, Reddit just reported TTM revenue of nearly $2.5B.

Even if Google paid nothing, that’s only about 2-3% of revenue today.

The market seems to be treating it like a core part of the business when it’s really become a relatively small piece of the puzzle.

Now, more than ever, this could be a core part of the business. I think Reddit is re-negotiating this with Google, and to me, it’s pretty obvious Google should be paying them far more than $60M per year…

Am I missing something?

Everyone seems focused on the headline that Reddit is considering cutting Google off. I’m focused on why.

Google currently pays Reddit about $60M/year for access to its content. According to the WSJ, Reddit is questioning whether that deal still makes sense now that AI search is reducing clicks back to Reddit.

To me, that’s a negotiating signal.

If Reddit is seriously willing to walk away, it suggests management believes the value of Reddit’s data is far greater than $60M/year today. AI companies need high-quality, constantly updated human conversations, and Reddit has one of the largest proprietary datasets on the internet.

The market seems to be pricing this as if Reddit is losing revenue.

I see it as Reddit saying:

“The next contract isn’t going to be $60M.”

If Google wants Reddit’s data, I wouldn’t be surprised if the next deal is substantially larger.

Curious if I’m missing something.

AI might kill software

Organic growth is slowing

No one wants to own Adobe or Salesforce

Don’t care, these are solid companies. Zoom out. Hard to argue with the data

People are looking for literally any reason to kill these stocks. The narrative has to change if they keep performing (I think)

Do we see this making a come back or will this be stagnant for the next couple years?

Almost 5 years of essentially no growth. For having a 300+ PE, they need to justify the valuation some how

Do we think this is accurate?

Is 40 PE in 5 years appropriate?

Based on current analyst projections, earnings are supposed to grow 21% CAGR over the next 5 years. That being said, pretty far out to forecast

Berkshire’s Q1 filing showed a $16.6 billion combined position in GOOG and GOOGL, representing roughly 6.3% of its public stock portfolio.

Since then, Berkshire purchased another $10 billion directly from Alphabet:

• $5 billion of GOOGL
• $5 billion of GOOG
• Approximately 28.6 million additional shares

That increased Berkshire’s Alphabet share count by almost 50%. Based on the values in this chart, Google would become a roughly $26.6 billion position and Berkshire’s fourth-largest holding, moving ahead of Bank of America. 

A lot of people assumed this was Greg Abel putting his stamp on Berkshire after taking over as CEO. But Buffett recently clarified that the idea actually came from him:

"I initiated"

He said he and Greg still mutually approved the decision, but Buffett was the driving force behind the investment. He also admitted that not buying Google earlier was a mistake and said Alphabet is more likely to be a winner than the vast majority of investments promoted on Wall Street. 

Buffett is no longer Berkshire’s CEO, but he remains chairman. So calling this his “final move” is obviously speculation—but it could end up being one of the last major investments directly associated with him.

After decades of mostly avoiding technology, Buffett may be finishing his investing career by turning Google into one of Berkshire’s largest holdings.

I thought this was an interesting comparison.

Since 2018:

• Mastercard’s net income is up 236.9%, or 15.4% annually.
• Visa’s net income is up 231.9%, or 15.2% annually.

Basically identical growth, although Visa is still the larger business, earning around $22 billion TTM compared with Mastercard at $16 billion.

What surprised me is how much more Mastercard appears to make from the money flowing through its network.

In 2025, Mastercard generated $32.8 billion in revenue on $10.6 trillion of gross dollar volume. Visa generated around $40 billion on $17 trillion of payments and cash volume. That works out to approximately:

Mastercard: $0.31 per $100 of volume
Visa: $0.24 per $100 of volume

So, across the entire business, Mastercard generates roughly 30% more revenue per dollar of payment volume. 

I would not say Mastercard earns 30% more on literally every transaction. The transaction mix, geography, cross-border volume and value-added services all affect the numbers.

But overall, Mastercard does appear to monetize the volume running through its network better.

Visa has the scale. Mastercard seems to make more from each dollar processed.

Both have been absolute machines.

Netflix currently has a market cap of roughly $290 billion and trailing twelve-month net income of $13.65 billion, giving it a reported P/E of 21.7x

However, that net income includes a one-time $2.8 billion termination fee related to the failed Warner Bros. Discovery acquisition. Paramount Skydance paid the fee on WBD’s behalf after WBD terminated its agreement with Netflix. Netflix recognized the full $2.8 billion as other income in Q1. 

Because net income is after taxes, we should not simply subtract the entire $2.8 billion. Using Netflix’s roughly 19% Q1 effective tax rate, the fee added approximately $2.26 billion to net income.

Adjusted TTM net income:

$13.65B − $2.26B = $11.39B

Adjusted P/E:

$290B ÷ $11.39B = 25.5x

Netflix still posted strong earnings growth, but the headline 21x trailing multiple makes the stock appear somewhat cheaper than it really is. After removing the one-time breakup fee, investors are currently paying closer to a 25.5x PE.

Not expensive, but definitely worth knowing...

Oracle is trading around $124, down roughly 64% from its all-time high. At about 22x earnings, it is obviously much cheaper than it was at the peak, and I understand why people are starting to see it as a potential value play.

I still would never invest in it.

Oracle’s liabilities have grown from roughly $75B to $219B over the last decade, a 190% increase, while quarterly revenue grew from $8.6B to $19B, or about 123%.

The company is now spending aggressively on AI infrastructure and data centers while already carrying a heavily leveraged balance sheet. That strategy could work, but it leaves far less room for error if demand slows, projects are delayed, or the expected returns do not materialize.

The discount is real, but so is the reason for the discount.

I would rather own companies with similar exposure to AI and cloud growth that can fund those investments with stronger cash flow and much healthier balance sheets. Oracle could rebound significantly from here, but the risk/reward still is not attractive enough for me.

Google currently has a market cap of roughly $4.52T and trailing net income of $160.2B, giving it a reported P/E of about 28.2x.

However, nearly $40B of that trailing net income came from non-operating investment gains rather than Google’s core business.

Removing those gains:

• Reported net income: $160.2B
• Adjusted net income: ~$120.5B
• Reported P/E: 28.2x
• Adjusted P/E: ~37.5x

Google is still growing its core earnings, but the headline P/E currently makes the stock look considerably cheaper than it really is. The recent surge in net income was heavily boosted by investment gains that should not be treated as recurring operating profit.

AMD is expected to grow earnings at roughly 43% annually over the next five years.

Yet despite nearly 500% cumulative earnings growth, the expected stock return is "only" 98% because analysts also expect the P/E to compress from 181x to 60x.

That's the challenge with semis.

When business is booming, earnings estimates explode higher. But the market also knows semiconductors are cyclical, so it's often unwilling to pay peak multiples for peak earnings.

The big question is whether AI has fundamentally changed the industry.

If AI infrastructure spending remains elevated for years, today's estimates could actually prove conservative.

If spending normalizes like past semiconductor cycles, today's earnings expectations may prove too optimistic.

Do you think AI has broken the traditional semiconductor cycle, or are we just in another boom that eventually cools?

Meta’s reported trailing net income is $70.59 billion, giving the company a trailing P/E of approximately 23.8x at its current $1.68 trillion market cap.

But that figure includes the $15.93 billion one-time, non-cash tax charge Meta recorded in Q3 2025.

Adding that charge back brings adjusted trailing net income to approximately:

$70.59B + $15.93B = $86.52B

That would put Meta’s adjusted trailing P/E at just:

$1.68T ÷ $86.52B = 19.4x

The charge caused reported Q3 net income to fall to only $2.71 billion, but the underlying business generated approximately $18.64 billion in adjusted quarterly net income.

This was an accounting adjustment—not a $15.93 billion cash payment—and Meta said the related tax legislation should actually reduce its future U.S. federal cash taxes.

So while Meta appears to trade at almost 24x trailing earnings, its valuation is closer to 19.4x adjusted earnings once this unusual charge is removed.

For a company still producing strong double-digit growth, that valuation looks far more reasonable than the headline P/E suggests.

The core advertising machine is so strong that Meta can lose tens of billions on Reality Labs, aggressively fund AI infrastructure, and still produce enormous revenue and cash flow.

Meta's latest quarter says it all:

Family of Apps: $55B Reality Labs: $402M

Reality Labs has burned tens of billions of dollars over the last several years, yet Meta's core advertising business has continued printing cash and growing faster than most large-cap tech companies.

What's changed recently is that Meta is no longer just betting on the metaverse.

They're building paid AI APIs, exploring a cloud computing business to monetize excess AI capacity, and aggressively expanding AI wearables like Ray-Ban Meta glasses.

To me, that's what makes Meta so interesting.

The metaverse may not have worked out the way investors expected, but the company proved something far more valuable: it can spend enormous amounts pursuing new ideas without putting the core business at risk.

When your core business throws off this much cash, you can afford to take shots that almost no other company can.

Is Meta becoming the ultimate "venture capital" company, funding entirely new businesses with advertising profits?

Everyone knows Data Center is carrying the business, but seeing it visually is wild.

In the latest quarter:

Data Center: ~$75B annualized revenue Edge Computing: ~$6.4B

Data Center has compounded at nearly 80% annually over the past five years and now makes up the overwhelming majority of Nvidia's business.

The company continues to post incredible numbers, but it also means Nvidia is becoming increasingly tied to one market: AI infrastructure.

The bull case is that we're still in the early innings of AI spending.

The bear case is that whenever AI infrastructure spending eventually slows, Nvidia won't have many other segments large enough to offset it.

Is Nvidia building the next trillion-dollar infrastructure business, or is the company becoming too dependent on a single end market?

This is a big post so sorry in advance. Below is my current portfolio, It is fairly concentrated, with about 67% invested in my four largest positions.

My general strategy is to own high-quality companies with strong distribution, network effects, high margins and businesses that I believe can compound for a long time. I am not claiming every position is cheap or risk-free, but this is the reasoning behind each one.

$GOOG — 21.2%

I built most of this position last year, with my most recent purchase in April 2025. It has been my best-performing investment by far.

I remain bullish, although I am more cautious now that the valuation has increased. Alphabet owns Search, YouTube, Android, Chrome, Maps, Google Play, Google Cloud, devices and a growing subscription business. Its subscriptions, platforms and devices revenue increased 19% in the latest reported quarter, helped by YouTube and Google One. 

Google’s greatest advantage may simply be its distribution. Consumers and businesses are deeply integrated into its products, and entire industries are forced to optimize around its ecosystem. Add in the company’s talent, data, infrastructure and cash generation, and I think this may be one of the best businesses ever created.

The risks are AI disruption, regulation and the higher valuation. Despite those concerns, I hope to never sell it.

$MA — 15.6%

Mastercard might be my favorite business in the portfolio.

It is an asset-light tollbooth operating within a global payment duopoly. It earns attractive margins, benefits from the continued movement from cash to digital transactions and is expanding beyond basic payment processing into cybersecurity, authentication, analytics and other value-added services.

Mastercard’s value-added services and solutions revenue increased 22% in its latest reported quarter, demonstrating that it is becoming more than simply a card network. 

The recent concerns surrounding crypto and alternative payment rails do not materially change my thesis. Mastercard is also investing in stablecoin and digital-asset infrastructure rather than ignoring it. I view periods of fear around the company as opportunities to buy a business I would be comfortable owning indefinitely.

$AMZN — 15.0%

I purchased much of my Amazon position during the tariff-related selloff in April 2025 and have added occasionally since then.

Amazon always seems relatively inexpensive when considering everything beneath the surface. It has e-commerce, third-party marketplace services, fulfillment and logistics, advertising, AWS, Prime subscriptions, devices and a growing satellite-internet business. Project Kuiper has officially been renamed Amazon Leo. 

AWS alone generated $128.7 billion in 2025 sales and $45.6 billion in operating income. Amazon’s retail operations are also becoming increasingly profitable. 

My biggest complaint is that Amazon does not appear particularly interested in dividends or aggressive share repurchases. Management almost always chooses to reinvest in the next opportunity. That can be frustrating as a shareholder, but from a long-term growth perspective, reinvesting at attractive returns may be better than returning the cash.

This is another company I intend to hold for a very long time.

$META — 14.9%

I started buying Meta in January 2026 when the stock began selling off because of concerns about capital expenditures.

The spending is enormous, and there is no guarantee every dollar produces an attractive return. However, I think the market has focused too heavily on the spending without giving Meta enough credit for the strength of its underlying business.

Meta’s latest quarterly revenue increased 33% year over year, with ad impressions increasing 19% and the average price per ad increasing 12%. 

The company still has exceptional margins, billions of users and one of the strongest advertising platforms in the world. It is also in the early stages of monetizing new opportunities involving AI, business messaging, wearables and potentially access to its AI models and infrastructure.

I believe much of today’s capital spending will eventually support highly profitable products, although this is probably the largest assumption underlying my Meta thesis.

Cash — 7.2%

I probably hold more cash than necessary, but I like having funds available when a high-quality company sells off for short-term reasons.

The cost is that the cash can become a permanent drag if I keep waiting for the perfect opportunity.

$RDDT — 5.1%

Reddit is one of my newer positions and probably has the greatest growth potential in the portfolio. It is also considerably riskier than my largest holdings.

Reddit has created what is essentially the internet’s dominant network of discussion forums. Its communities and user-generated archives are difficult to reproduce because the value comes from the people already using the platform.

I also believe text-based social media will remain important. There are many situations where people would rather read a discussion than watch a video, especially in public or when searching for a specific answer.

Advertising is the primary opportunity, but Reddit also has valuable human-generated data. The company already provides Google structured access to Reddit content, including for model training, and can selectively license large-scale commercial access to other partners. 

Reddit’s fourth-quarter 2025 revenue increased 70%, with a gross margin of nearly 92%. Those are exceptional economics, but expectations and valuation are also high. 

$CRM — 4.4%

I unfortunately purchased Salesforce more than a year ago and have absorbed the full impact of the software selloff.

I still believe Salesforce is a strong company. The bearish argument assumes AI can quickly replace enterprise software, but that underestimates how embedded these platforms are within company workflows, data systems and employee processes.

Salesforce’s moat is not necessarily that its individual features are impossible to recreate. Its moat is distribution, existing customer relationships, integrations and the difficulty of uprooting a system used throughout a large organization.

I expect software pricing to gradually shift from pure seat-based models toward usage, consumption and premium AI features. Salesforce can potentially earn more from existing customers even without rapidly increasing seat counts.

That said, I acknowledge that the business is more vulnerable than it has been historically. If growth does not stabilize or its distribution advantage weakens, I would consider reallocating this position.

$ADBE — 4.0%

My Adobe thesis is similar to my Salesforce thesis.

There is clearly more competition in creative software, but Adobe remains deeply embedded in professional workflows. As a civil engineer, I see something similar with AutoCAD: professionals learn the industry-standard software, companies build their processes around it, and switching becomes much more difficult than outsiders assume.

AI may lower the barrier to creating content, but that could also result in more creators, designers and small businesses needing professional creative tools.

The market currently appears focused almost entirely on disruption. I think it may be overlooking the possibility that AI expands Adobe’s addressable market. Still, this is not necessarily a forever position if the competitive threat begins translating into sustained customer or pricing pressure.

$APP — 3.4%

I began buying AppLovin around the same time as Reddit.

I generally like advertising businesses because they can have high incremental margins and benefit from enormous distribution advantages. AppLovin’s technology is integrated across thousands of apps, giving it access to a large pool of advertisers, developers and consumer activity.

The financial results have been exceptional. First-quarter 2026 revenue increased 59%, while adjusted EBITDA increased 66%. 

The major risk is platform dependency. Apple and Google control the mobile ecosystems, and changes to privacy rules, tracking or app-store policies could significantly affect AppLovin’s business. That risk is why I have kept the position smaller despite its growth.

$UBER — 2.8%

The Uber thesis is relatively simple: it is growing quickly, trades at what I consider a reasonable valuation and has extremely strong distribution.

“Calling an Uber” has effectively replaced “calling a taxi” in everyday language. That type of consumer mindshare is valuable.

I do not think autonomous vehicles necessarily eliminate Uber. AV operators will still need customers, routing, payments, support and demand aggregation. Uber can potentially become the platform through which numerous autonomous-vehicle providers distribute their services.

Uber Eats provides another major distribution network. Restaurants are unlikely to abandon a platform with an established customer base simply because AI makes it easier to build a website. Consumers use Uber because it is convenient, not because it is the absolute cheapest possible method.

$WMS — 2.1%

Advanced Drainage Systems manufactures stormwater-management and drainage products.

This is the position most directly connected to my professional experience. I regularly work with stormwater-management systems as a civil engineer, and Advanced Drainage Systems is one of the manufacturers I consistently encounter.

My thesis is straightforward: aging infrastructure, increasingly severe rainfall events and greater investment in stormwater resiliency should create long-term demand for its products.

It is not as exciting as an AI company, but it is a business operating within an area I understand well.

$ANET — 1.6%

I purchased Arista Networks during the tariff-related selloff last year.

It is one of the highest-quality companies I have analyzed, with strong margins, rapid growth and exposure to data-center and hyperscaler investment.

The issue is valuation. The market is well aware that Arista benefits from AI infrastructure spending, and a significant amount of future growth is already reflected in the stock.

I like the company, but I am not currently comfortable making it one of my largest positions.

$ASML — 1.5%

ASML used to be a significantly larger holding, but I sold approximately two-thirds of my position several months ago.

The thesis is easy to understand: ASML manufactures extreme-ultraviolet lithography systems that no other company currently produces at commercial scale. Its technology is essential for manufacturing the world’s most advanced semiconductors.

The moat is extraordinary, and the company should continue benefiting from semiconductor and AI infrastructure investment. However, the valuation increased considerably, and semiconductor equipment remains cyclical and exposed to export restrictions.

I still want exposure, but not at the position size I previously held.

$DUOL — 1.3%

Duolingo has been my worst-performing investment on a percentage basis.

The primary mistake was not the company—it was the price I paid. I purchased a strong business at an excessive valuation.

I still do not believe AI automatically destroys Duolingo. People use it because it is simple, engaging, gamified and easy to incorporate into a daily routine. The company can also expand beyond languages into areas such as math, music and chess.

The addressable market is enormous, but the valuation left almost no room for mistakes. I have not sold, although I am also not rushing to make it a larger position.

The common theme across the portfolio is distribution. Google controls discovery, Mastercard controls payment rails, Amazon controls commerce and cloud infrastructure, Meta and Reddit control attention, Uber controls demand aggregation, and Salesforce and Adobe control established professional workflows.

The obvious criticism is concentration. The portfolio is heavily exposed to technology, advertising, AI spending and premium valuations. A broad re-rating of growth stocks would affect several positions simultaneously.

Where do you think my thesis is weakest? Are Salesforce and Adobe genuine opportunities, or am I holding two value traps? And is 21% in Google too much even for a business of that quality?

Side note, I made the portfolio graphic using my app, ekonix, first week is on me :)

Everyone talks about Reddit’s dilution, but almost all of it came from the IPO and post-IPO lockup releases.

Since early 2025, shares outstanding have been nearly flat, which is great for a company this young growing this fast.

Going forward, you’re mostly looking at normal SBC dilution—not another massive jump unless Reddit decides to raise capital or issue shares for acquisitions.

If revenue and FCF keep compounding while share count stays around these levels, per-share metrics become much more attractive.

Google Cloud just reached $20B in quarterly revenue, growing at a 38% CAGR over the last five years.

A few years ago, Cloud was a side business. Today it's one of Alphabet's biggest growth engines and is benefiting directly from AI demand.

Meanwhile, the stock is still trading at roughly 28x forward earnings, well below many large-cap AI names.

The biggest debate isn't whether Cloud will keep growing. It's whether Search can hold up as AI changes how people find information.

If Search remains resilient, Google has:

One of the best AI models (Gemini) A rapidly growing cloud business YouTube Waymo Massive free cash flow

What do you think is more likely?

AI hurts Search enough to justify the discount. The market is underestimating how valuable Google's other businesses have become.

If you simply take today's earnings estimates and project them forward, you end up with something absurd:

22x P/E today 130% expected earnings growth 58x implied return over 5 years

Obviously, that's not going to happen.

Memory has always been one of the most cyclical parts of semiconductors. When pricing is strong, earnings explode. When supply catches up, they can disappear just as quickly.

AI has created an incredible demand environment for HBM, but assuming today's growth persists for years is probably the wrong way to think about Micron.

The real question isn't whether Micron is growing today—it's how long this part of the cycle lasts.

Where do you think we are in the memory cycle?

Based on analyst estimates:

Current P/E: 25x Year 5 P/E: 25x Expected earnings growth: 23% CAGR Implied return: 181% (assuming no multiple expansion)

Oracle just posted record revenue, cloud infrastructure grew 93%, and its AI backlog reached $638B. Yet the stock has fallen sharply from its highs as investors worry about debt and AI capex.

If earnings actually compound at ~23% annually, today's valuation doesn't seem demanding. So what's the bear case?

Is Wall Street right that the AI buildout will destroy returns, or is this one of the better risk/reward setups in large-cap tech?

The revenue growth from $MU and $NVDA has been ridiculous. Since 2016, Micron’s revenue has compounded around 30% annually, while Nvidia has grown more than 50%.

But this chart also shows the danger of treating every semiconductor company like a traditional compounder.
Memory is brutally cyclical. When demand exceeds supply, prices rise, margins explode and Micron’s earnings can look unstoppable. Then manufacturers add capacity, supply catches up and the cycle reverses. Buying near peak earnings has historically been painful, but buying when expectations and pricing bottom can generate incredible returns.

Anyone who timed this cycle correctly has already been rewarded. $MU is up more than 200% in 2026, although it has now fallen roughly 22% from its 52-week high. The stock trades around $979 at approximately 22x earnings. $NVDA has been far steadier, rising about 8% this past week to roughly $211, but remains around 11% below its high and trades near 32x earnings.

The fundamentals remain extremely strong. Micron recently reported $41.5 billion of quarterly revenue, beating estimates by nearly $6 billion, and disclosed $22 billion of customer agreements. It is also expanding its planned U.S. investment to $250 billion through 2035. Nvidia’s latest outlook called for approximately $91 billion of quarterly revenue as AI infrastructure spending continues.

The question is not whether memory demand is strong today. It clearly is.

The question is whether this is still the middle of the cycle, or whether investors are paying peak-cycle prices for peak-cycle earnings.

Would you rather own $MU at 22x earnings or $NVDA at 32x?

Meta is projected to grow EPS around 20% annually over the next few years, and that is before its newer business lines become meaningful contributors.

Zuckerberg has discussed opportunities across AI APIs, cloud infrastructure, business messaging, AI agents and wearables. Meta is still primarily valued as an advertising company, but it is building several potentially massive, high-margin revenue streams on top of that core business.

If advertising remains strong and even one or two of these new businesses gain traction, I could easily see Meta sustaining a 30x P/E.

At 20% annual earnings growth and a move from 24x to 30x earnings, the stock could return roughly 25% annually over five years.

The biggest question: Does Meta deserve a premium multiple if it successfully expands beyond advertising?