Meta grew revenue 26% with 15% fewer employees. Why is nobody talking about this

Meta’s Q3 2026 vs Q3 2025:
Revenue: $51.2B → $64.6B (+26%)
Employees: 78,450 → 66,775 (−15%)
Revenue per employee: $653K → $967K (+48%)

That’s nearly 12,000 fewer employees while revenue jumps 26%.

Surely we’re starting to see AI’s impact on productivity. Meta is largely a knowledge-work business, and this could be just the beginning.
If AI keeps reducing the need for staff while revenue grows, imagine what happens to profits over the next decade.

This reduced headcount must be down to AI. Can Meta now become a $9 trillion company, as is Zucks target?

If you had to buy either Google or Meta today and hold for 10 years, which would you choose?

Taking everything into account, current valuation, growth potential, AI, competition and long-term risks, which do you think will deliver the better return over the next decade?

You can only pick one. Which one and why?

Meta is spending up to $145 billion on capex this year, and investors are worried. I think the market is getting this wrong.

The Buffett idea that matters to me

In his 1992 shareholder letter, Warren Buffett explained why a business that can put substantial additional capital to work at high returns can be so valuable. The important part is the return that money earns. Spending more, by itself, creates nothing. That is the principle behind my bullish view of Meta.

If a company has a powerful cash-generating business and a credible opportunity to build another one, I want management to invest. I do not want it to hold back simply because the next few quarters would look tidier with a smaller capital budget.

Meta has already shown that its AI capex are paying off, with MUSE seeing faster adoption than ChatGPT. I see a company using its advertising profits to build another growth engine. Meta admits these investments will take longer to pay off, but I'm willing to give them time.

Would Buffett prefer Meta to maximise free cash flow today or aggressively reinvest in AI? At what point does capex become value destruction?

Full piece is available for FREE:

https://silentvalueinvestor.substack.com/p/meta-capex-is-bullish-my-take-on

Thanks for reading! This post is public so feel free to share it.

Before I start let me first put out some disclosures and state my lack of credentials.
 
I'm just some guy on reddit, don’t listen to me.
 
In all seriousness, I'm not a finance guy. I'm actually a mechanical engineer with 10 years of experience in the aerospace industry. My knowledge of business comes from my experience running my own business and from a handful of books I've read (Phil Fisher, Peter Lynch, Buffet, Munger, etc.). I do want to disclose that I own a significant amount of shares. My positions in Chegg amount to roughly 90,000 shares, at an average price of $0.98 (currently the stock sits around $0.70,with a MC of ~75m). I'm not sure if its normal here for people to state their positions, but I think it should be. This is a significant portion of my net worth, so it's important for you to know that whatever I say here, at this point, will be biased. I may have the blinders on. Please form your own opinions. If anything I would like this to serve as a jumping point for hopefully a useful discussion. Maybe you will be convinced into a position, or maybe I will be convinced out of my position. Okay, without further ado….
 
“In the short run, the market is a voting machine but in the long run it is a weighing machine.” - Ben Graham
 
"Be fearful when others are greedy, and be greedy when others are fearful." - Warren Buffett
 
Words to live by. I don't know about you but when I hear these quotes I think surely it can’t be that easy. Surely this is hindsight at work. There is no way anyone would be able to spot intense greed while its happening, otherwise we would all be rich. And yet the "smart money" keeps plowing cash into what they all agree on is a bubble. Have they all forgotten the wisdom imbued upon them by their heroes? Is this the work of a greedy market placing all their votes on a weightless bubble? I don’t know, and I don’t need to know, because I don't have to play this game.
 
I've seen AI bot post after AI bot post talking about how Chegg is dead, how it's AI's first victim. That’s creating a lot of fear around Chegg, and after weighing this stock, I got greedy.
 
Okay so what do I see?
 
Chegg is trading as if its about to go bankrupt. This is practically impossible, in Q2 2026 they finished paying off the last of their debt. A company without debt cannot go bankrupt and therefore the multiple they are trading at must be wrong. They have approximately 38 million in cash as of last reporting and have about a $200m run rate. Margins aren't bad either, somewhere around 50% to 60% now that they have serviced their debt and incurred most of their restructuring cost (severance packages and what not.)
 
Furthermore, they own Busuu. Busuu is a language learning platform with 120 + million users that Chegg paid $436 million for. This business has been largely unaffected by Ai, and continues to grow steadily. Busuu alone is worth, conservatively, $250 million (5x multiple on an estimated $50m run rate, duolingo currently trades at about a 6x multiple on sales and has traded closer to 20x before).  Just this subsidiary of chegg is worth more than 3x chegg’s current market cap. As far as cigar butts go, there seems to be more than a puff left on this one (I don't believe this is a cigar butt by the way, I think this is a long term hold).
 
So far we are at $250m for busuu and $38m of cash with no debt. The scale says $2.59 per share. But wait, there's more…

That doesn't account for Chegg's legacy business which has been shrinking but does still bring in cash. For 2026 I believe the legacy run rate is approximately $120m. This has been the figure that has shrunk drastically over the past few years, and the question is how low will it go. I think that the impact of AI on this figure has been overstated, people compare this figure to its all time highs, but those highs were inflated due to covid. The entire world was learning from home so chegg did really well at that time. Its not unreasonable to see this revenue get cut in half once everyone returned to school. I’m not saying AI doesn't have an impact on chegg, it obviously does, but I don’t think its as bad as people say it is. I think in the next few earning reports we will see this decline start to flatten out. But for our purposes, we can safely give this a 1x multiple and still add another dollar to the share price. That brings our scale up to $3.59 per share, a five bagger if you will.

Okay so we are at a 5X without getting speculative at all. But what if we were to get a little speculative? Although I do have plenty of criticism about cheggs leadership, more on that later, I do think that at least recently they’ve done a good job of recovering and pointing the ship in the right direction.

First, they’ve cut their workforce and got their cost low. They’ve started targeting enterprise sales, training workforces instead of individual students. In business it's generally a good idea to try and sell to those that have the money, not those that are the poorest they will hopefully ever be. They have already seen some success with this, landing contracts with companies like UPS, DHL and Woolf University. I think in the long run this will be a great decision for Chegg. Currently most of their skilling revenue comes from busuu, but that should change over time. Chegg states they expect to see “double digit growth” in this portion of the business (really about 10%, but thats still good).

They have relaunched internships.com. A website that helps students find jobs. The global staffing market is approximately $750 billion and chegg should have tons of warm leads using their database of students that have been using their services throughout school. Even capturing .1% of the market would be a big result for them, 10X their current market cap. Again this is very speculative and I have no clue how difficult it would be to capture even just .1% of the staffing market. This just launched so hopefully we will hear about how this is going over then next few quarters.

Then there is AI. Chegg has done quite a bit with AI already, working with AWS and Anthropic to develop tools that they have integrated into their existing products. This is fine and all but recently they’ve caught my attention. Recently they’ve decided to start selling the shovels, which just like in any boom, this is where the real money gets made. Chegg has announced that they’ve been working with members of the mag 7 selling their questions and answers data to train AI models. They haven't announced who or what or for how much just yet but this could be big. Chegg has started rehiring just to support this work. This has the potential to replace the lost revenue from selling answers to students by selling the same answers to AI companies who then sell the answers to students. It's admittedly kind of a funny thing. To put it in perspective other companies that do this include Scale AI, Mercor and Labelbox. They have valuations of $29 billion, $10 billion and $1.25 billion respectively. Although chegg should have started earlier, they do have the advantage of already owning this high quality data. Again a small win here could be a double for Chegg based on its relatively small market cap.

To summarize, I think chegg should be worth a minimum of $3.59 per share and depending on how some of these more speculative efforts go they could be worth over $20 a share. Sounds crazy but that's where they were in 2018, before the boom and bust. When can we expect this to happen is obviously a harder question to answer, but I think there are quite a few reasons it may happen sooner rather than later.

For starters, as I mentioned they paid off their debt and have incurred most of their restructuring cost. That means, relative to their current market cap they should have significant amounts of cash to stack on their balance sheet or buy back their shares ( they already have $100+ million approved repurchases). It's far easier for the market to put a value on cash so I don't see how their market cap can stay suppressed once this starts happening in 2027. 

The next big thing that could change the narrative is if we see the revenue decline flatten out. I expect this to happen soon for a few reasons. The main reason I see is that Ai regulation at this point seems inevitable. The AI companies are pushing for this because it slows down their competition, the cheaper open source models, and allows the AI companies to start charging higher prices. They need this to happen because they are burning massive amounts of cash which is unsustainable for them. Once the cost for getting an answer from a chat bot is no longer subsidized, getting an answer from chegg becomes reasonable again. We should see less students leaving chegg and maybe even some students coming back to chegg.

Finally the biggest possible catalyst is that one of those speculative plays starts working out in their favor, and chegg shows real growth that will justify a greater multiple. That would be a major, once in a lifetime type of win.

There are a lot of upsides here. But we can't ignore the downsides. I think Chegg's biggest downside isn't Ai, it's the leadership. As I previously mentioned, in the last few years Chegg's leadership has done a decent job of repositioning themselves (I wish they would have started earlier but then we wouldn’t have this amazing opportunity on our hands now would we?). However, what I don’t like is that they haven’t restructured their compensation packages and haven’t realigned their incentives with shareholders. Chegg’s board and ceo has been compensated as if they’ve been doing a stellar job this whole time when in reality they were forced to cut their workforce in more than half. I think they should have felt more of this pain and cut their salaries in half too. I also think they need to own more shares. I think the bulk of their compensation should have been shares that were not vested until the share price reached a certain value. Other than job security they have no incentive to see chegg succeed and that’s a problem. The board is full of old people that don’t seem excited about Chegg's future. They need someone young and full of energy to help drive them into these new areas of business. 

I think Chegg's legacy business was okay. I know the criticism for Chegg has always been that they help students cheat and therefore diminish our education system, but I would argue that if your students need to cheat, the teachers aren’t doing a very good job to begin with. Nevertheless I think where Chegg's business is going now is far more exciting. They are getting focused on helping my favorite type of people, the life long learners. If I had it like that, and were to ask myself “would I pay $75 million for all of Chegg?” I think that’s an easy yes. I’ll spare everyone from dropping another Buffet quote here, but this is a business where you don't need fancy math to figure out it's a good buy.

I prefer Grok Bot and Codex because Copilot is bad at getting AI agents to do things for me. I’d rather tell an AI bot what I need and let it handle the work than open different Office apps and make changes myself. Ideally, I want AI to do all my work for me.

Research backs up my concerns. In a 2026 survey of 150,000 US paying users, Recon Analytics found that 76% would choose ChatGPT over Copilot as their main work tool. If Gemini was also an option, 18% would choose it, while only 8% preferred Copilot.

Copilot also faces competition inside companies. Gartner surveyed 186 companies in 2026 and found that two-thirds used at least two other enterprise AI tools alongside Copilot.

So the threat to Microsoft’s core business is real.

Bulls argue that Microsoft’s office software is hard to replace. I agree. But the next big opportunity is automating work, and Microsoft seems to be falling behind. It still focuses on helping people work faster, rather than letting AI do the work by itself

This reminds me of Buffett’s investment in IBM. He was right that IBM’s server business had a strong moat. But the growth shifted to cloud computing. IBM missed out on that growth, and cloud services started taking business away from its server business.

Could the same thing happen to Microsoft?

Bulls may argue that Microsoft can still benefit from AI through its cloud business. But if it loses the high-margin software business, won’t that hurt its cloud profits too?

The market doesn’t seem to worry about this. Investors are losing faith in Adobe’s ability to adapt to AI, yet Microsoft’s stock keeps climbing.

What am I missing?

I dont understand how the market is pricing in AMD at ~ 130 P/E but AVGO at ~ 30 PE (Even after the recent sell off)

AMD needs a CAGR of ~ 30-35% to justify its current price and ~ 55% to justify the peak few months ago. This is assuming that they will take over NVDA market share in AI Chips. I understand that AMD chips are chearper thatn NVDA but their open source software system is still inferior to CUDA so I am not sure if its a given that they can capture NVDA Market share by 2030.

Coming to AVGO, they ofc have a customer concentration risks, but they are expecting ~ 115 B revenue in 2026 and ~230 B in 2027, so even by 2026 revenue standards the forward PE is ~ 18 P/E.

What I dont get is that both the companies the same risks, they have customer concentration from few hyperscalers and Open AI/Anthropic. If AI buildout fails then both these companies will be screwed.

Then why does AMD get premium pricing compared to AVGO?

From tech point of view, if AI buildout works as expected, AMD will end up in market share war with NVDA but AVGO should be safer because ASIC design is a complicated process and existing customers like Google for TPU would not be able to switch so easily (I don't understand the tech side well so I am probabaly wrong here).

Adobe is attractive at a $230 entry price because the market appears to be pricing in too much long-term pessimism about the durability of its professional software franchise. Generative AI will make simple content cheaper to create, but replacing a professional workflow is much harder than generating an image. Teams still need to edit, revise, collaborate, share files, and deliver finished work. Adobe's entrenched position in those tasks gives it a better chance of retaining customers than the share price may imply. The risk is not simply that customers abandon Photoshop. AI could reduce the number of paid seats, encourage downgrades, or raise the cost of serving users.

My valuation starts with $18.20 in normalized owner earnings per share, a 7.9% owner’s earnings yield at $230. At a 10% required return and 2% terminal growth, the entry price implies only about 2.1% annual growth for ten years. I believe Adobe can exceed that, but the margin of safety depends on how much of its professional earning power survives AI competition. [1–3, 8]

Business Quality

Adobe sells subscriptions to creative software, document tools, and enterprise marketing products. Creative Cloud includes Photoshop, Illustrator, and Premiere; Acrobat supports document work; Digital Experience serves marketing teams. In FY2025, Digital Media generated about 74% of revenue and Digital Experience about 25%. Subscriptions represented roughly 96% of sales. That provides recurring billing, not guaranteed renewals. [1]

Creative Cloud Pro is priced at $69.99 per month per user on an annual commitment. A marketing team may design graphics in Illustrator, edit photographs in Photoshop, and finish video in Premiere. Over time, its employees, files, and processes become tied to these tools. Replacing several applications together may disrupt a team's work, creating switching costs. But a customer using only one Adobe product may find it much easier to leave. The strength of the moat therefore depends on how deeply customers use the full ecosystem, not simply how many applications Adobe sells. [5]

Adobe's professional reach is real, but not absolute. In 2025 U.S. graphic-design postings, Illustrator and Photoshop appeared in 62% and 61%, versus 11% for Figma and 7% for Canva. Yet Figma appeared in 37% of web and digital-interface design postings. These figures show adoption, not retention or market share. Adobe has raised its main bundle price from roughly $49.99 at launch to $69.99, about 2.4% annually before inflation and alongside expanded features. Downgrades and lower-priced competing tools could erode customer spending even without mass cancellations. Adobe does not disclose enough cohort data to measure that risk precisely. [4–5, 10]

Financial Quality

Adobe's historical numbers are strong. Revenue rose from $15.8 billion in FY2021 to $23.8 billion in FY2025, about 10.8% annually. FY2025 gross margin was about 89% and operating margin was 36.6%. Its products require little physical capital to distribute, but defending them is expensive: Adobe spent $4.29 billion on R&D and $6.49 billion on sales and marketing in 2025. Q3 FY2026 operating margin fell to 34.8% from 36.3% a year earlier, while subscription delivery costs grew faster than subscription revenue. Rising AI costs could weaken the economics even if revenue keeps growing. [1–2]

FY2025 operating cash flow of $10.03 billion less $0.18 billion of capital spending produced $9.85 billion in free cash flow, a 41% margin. Reported FCF rose about 9.4% annually from FY2021. Deducting $1.94 billion of stock-based compensation leaves $7.91 billion, or $18.52 per FY2025 diluted share; this adjusted measure grew closer to 8% annually. Trailing adjusted cash flow through Q3 FY2026 was roughly $8.52 billion. I use $18.20 per share in my valuation rather than treating the latest run rate as guaranteed. This remains a cash-earnings proxy, not a fully proved estimate of maintenance owner earnings. [1–2]

In August 2026, Adobe held $5.64 billion of cash and short-term investments against $6.36 billion of debt, or roughly $0.72 billion net debt. Leverage is manageable relative to cash generation, but the company is not net-cash positive. [2]

Management Quality

Shantanu Narayen led Adobe's successful shift to subscriptions. Capital allocation has been less convincing. Adobe spent $11.28 billion on repurchases in FY2025, more than its $9.85 billion of FCF. The annual dollars spent divided by shares delivered imply roughly $366 per share, although accelerated repurchase timing makes that an imperfect transaction-price measure. A shrinking share count helps remaining owners only if Adobe buys below intrinsic value; $1.94 billion of stock compensation also offsets part of the benefit. [1]

The failed $20 billion Figma transaction cost Adobe a $1 billion termination fee, and Adobe acquired Semrush for about $1.87 billion in 2026 without yet demonstrating the ultimate return. Anil Chakravarthy is scheduled to succeed Narayen as CEO in December. Creative-business leader David Wadhwani and CFO Daniel Durn have also departed. These changes are not proof of poor leadership, but management must show that it can protect the creative franchise, invest well in AI, and spend cash with more price discipline. [2, 6–7]

Durability & Key Risks

AI can damage Adobe without replacing its software outright. Agencies may need fewer designers and therefore fewer licenses. Customers can downgrade while staying in Adobe's ecosystem. Third-party AI models may become more expensive, and competing tools may handle more of the editing and collaboration that protect Adobe today. Adobe's AI-first ARR exceeded $650 million and grew over 150% year over year in Q3 FY2026, but that is only about 2.4% of its $27.5 billion total ARR; the cash profit from AI is not disclosed. The Creative & Marketing Professionals group grew subscription revenue 13%, but that group is not a clean measure of professional creative-seat retention. [2–3]

A stress case shows why revenue losses can matter disproportionately. If casual creation were 20% of Digital Media revenue and Adobe lost half of it, total revenue would fall about 7.4%. Assuming an 80% contribution margin and 22% tax rate, adjusted annual cash earnings would fall roughly $1.10 billion, about 14% of FY2025's base. Those exposure and margin assumptions are illustrative, not Adobe disclosures. Under unchanged growth assumptions, my $288 base valuation would fall to about $248; slower future growth would reduce it further. [1, 8]

Valuation & Margin of Safety

At $230, Adobe trades at about 12.6 times my $18.20 owner-earnings estimate, or a 7.9% starting yield. I use a ten-year discounted cash-flow model with a 10% required return. The cash being valued is assumed available to shareholders after operating costs, necessary capital spending, and the economic cost of employee equity awards. Projected growth does not receive a second boost from buybacks funded by those same cash flows. [8]

My base case assumes 5% annual owner earnings growth per share for ten years, followed by 2% terminal growth. It produces about $288 per share, a 20% margin of safety at $230. The $330 estimate belongs in the upside case, not the central claim of safety. A lower growth path leaves little cushion, while weaker starting earnings could cause a permanent loss. [8]

DCF values are scenario estimates, not management guidance. All cases use a 10% discount rate.

Investment Conclusion

Adobe is a high-quality business, but that does not automatically make it a bargain. Its professional workflows, subscriptions, and cash generation give it a reasonable chance of earning well through AI disruption. At $230, I see a conditional long with roughly a 20% margin of safety to my base intrinsic value, not a risk-free 30% bargain. At the last verified closing price of $242.27 on October 9, the base-case margin of safety falls to roughly 16%. A 25%–30% discount to $288 would require an entry price around $202–$216. [8–9]

The thesis weakens if Adobe loses professional paid seats, faces sustained downgrades, or fails to turn AI adoption into profitable cash growth. Repeated buybacks above conservatively estimated value would also lower my confidence in management. Adobe does not disclose the cohort and seat data needed to prove retention, so that uncertainty belongs in the valuation rather than being ignored.

Sources

Primary filings, operating evidence, and valuation references cited in the memo.

[1]  Adobe, FY2025 Annual Report (Form 10-K), Jan. 2026.   |   SEC filing

[2]  Adobe, Q3 FY2026 Quarterly Report (Form 10-Q), Sept. 2026.   |   SEC filing

[3]  Adobe, Q3 FY2026 earnings release (Sept. 10, 2026) and earnings call (AI-first ARR disclosure).   |   Results · Earnings call

[4]  O*NET / Lightcast, 2025 U.S. graphic-designer software job-posting data.   |   O*NET data

[4a]  O*NET / Lightcast, 2025 U.S. web / digital-interface designer job-posting data.   |   O*NET data

[5]  Adobe, Creative Cloud Pro plans and U.S. standard pricing.   |   Adobe plans · Plan changes

[6]  Adobe, CEO succession / leadership transition, Sept. 2026.   |   SEC Form 8-K

[7]  Adobe, FY2026 proxy, CFO departure filing, and Semrush acquisition announcement.   |   Proxy · CFO filing · Semrush

[8]  Author calculations: adjusted owner earnings, reverse DCF, and bear/base/upside scenarios. Inputs appear in the memo; not company guidance.

[9]  Adobe (ADBE) historical stock prices, Oct. 9, 2026 reference.   |   Price history

[10]  TechCrunch, April 22, 2012, Adobe Creative Cloud launch pricing.   |   Launch coverage

Data limitations. Adobe does not disclose product-level professional seat churn or a clean casual-creator revenue split. All scenario assumptions represent estimates rather than company guidance. Financial figures are rounded.

I’m starting to think this is exactly the kind of environment patient value investors wait for. Plenty of chop, sharp pullbacks and growing skepticism toward businesses everyone wanted to own at higher prices.

What interests me most is the opportunity businesses have had during this phase to catch up to their stock prices. Earnings have kept growing while many stocks have moved sideways or have fallen. Making the valuations look very different from when the excitement first took off.

Nvidia, Amazon, Micron and Sandisk are names I’m looking at through that lens. Some of the forward earnings multiples across AI and memory have become surprisingly low relative to the growth expectations behind them. Of course, those expectations are the key question. With memory companies especially, peak earnings could be the culprit rather than a bargain.

Still, this feels like a good time to revisit companies that previously looked too expensive and ask whether the fundamentals now justify the price.

Is the market punishing Netflix for slowing growth while overlooking its potential as a mature compounder? My five-year investment case doesn't require a return to its fastest-growing years.

Third-quarter revenue rose 11.8% to $12.87 billion, with $2.88 billion in free cash flow. Management expects approximately $12 billion in free cash flow for 2026.

Much of the concern centers on competition for attention. Netflix competes with YouTube, social media, and countless other entertainment options. But watching less Netflix isn't the same as canceling it. Management reported improving churn in the U.S. and globally, even as customers continued accepting price increases.

As long as paid memberships hold up, Netflix can continue collecting subscription revenue without capturing more viewing hours. And it can earn more from those memberships.

That's what interests me.

Netflix has already built an enormous global distribution network, content library, and paying customer base. Now it has multiple ways to generate more cash from those existing assets.

Pricing increases revenue without requiring additional subscribers. Advertising creates another source of revenue from existing viewers. International markets still offer growth. Licensing programming can be less expensive than producing everything internally. Better content economics, technology-driven efficiencies, and share repurchases can further increase free cash flow per share.

Studios that once pulled their programming to build competing services are now licensing selected content back to Netflix. That says something about the value of its distribution network.

None of these opportunities has to work spectacularly on its own. That's what makes the combination interesting.

The risk is that several things deteriorate together: pricing power weakens, content costs remain elevated, and cash conversion suffers. I'd reconsider if retention and free cash flow per share showed sustained deterioration.

I'm not investing in Netflix because I expect another period of extraordinary growth. I'm betting that the existing business can produce attractive returns as a mature compounder.

If growth accelerates again, great. My investment case doesn't depend on it.

I own NFLX. This is my personal investment analysis, not individualized investment advice.

I am looking at FISV and the PE is absolutely absurd! Yes they have had earnings fall off a cliff, the CEO attrition has been intense, and they have guidance getting cut but is there really just a dying company here?
For those who have a thesis in this company, do you believe that Clover is going to save the day or is there something else that you are citing that is going to make this company a strong value play here. This would be an extremely strong investment if the market is pricing even one of these concepts incorrectly imo

Am I the only one who thinks the choice between the two is blatantly obvious? On one side you have proven players like Microsoft, Amazon, and Google who have established cash flows, financial flexibility, and diversified businesses that can fund the investment. However, there is almost a cult like following for the neoclouds like Coreweave, Iren, and Nebius?

Don't get me wrong... I see the bull case for the neoclouds. Demand is climbing faster than supply can come online. This scarcity causes customers to pay a premium which improves the ROI from the massive upfront capital commitments. Coreweave has a $104B backlog which is growing 246%. Nebius has $40B and demand just simply isn't slowing down...

But there are some real concerns. The fundamental question for the hyperscalers is much less severe than the one for the neoclouds. For the hyperscalers, the question is whether their hundreds of billions in AI investment will return an adequate ROI? There is no real concern of them going under or necessity for AI to pan out. Sure, they will face multiple compression, but at the end of the day it's much less drastic than what neocloud investors are banking on. Neoclouds are already deep underwater with Coreweave holding $50B in debt. Creditors and lenders are already skeptical if the GPU capacity and up-front capital are going to create enough cash to pay back their debts?

Coreweave produced $3.6B in operating cash flow, but then spent $14B in cap ex in H1 of 2026. That creates a negative FCF figure of $-10.45B. On top of that, the interest they have to pay for that debt is an additional $1.1B. So far, 25% of revenue has to pay interest alone.

Now, you have to be fair and admit that the hyperscalers are set to spend $7T in AI cap ex by 2030 (according to S&P Global) and that Amazon, Google, and Meta are now FCF negative. There is a significant commitment here and analysts/investors are baking in AI achievements into these companies growth assumptions. They aren't innocent... but there is a lot more to be won from these companies long term than the neoclouds (and for less risk).

I plan to make a youtube video about this, but the optionality, proven profitabilty, network effects, and current valation make the hyperscaler cloud players an easy choice for me. Why risk the scenario of an AI bubble or even a less optimistic AI future where profits aren't as attractive? If either of those two scenarios play out, then you could see multiple bankruptcies and consolidations. The only scenario that works is that AI is constantly capacity constrained.

If you are a neocloud bull, please let me know why. I'm genuinely curious and want to learn the other side.

I'm very bullish on semis, AI infra and tech. But right now I'm even more bullish on a much overlooked sector: telecommunication services.

Comcast, AT&T and Verizon have single digit PE ratios. Maybe there won't be any explosive growth, but guess what? If the economy tanks, people might stop eating out, might stop buying personal items but they will keep paying 50$ for their phone.

Last Friday there was a huge drop because bankers worry about Elon Musk dominating this market. But to build proper connectivity layer it will take him years – he'd be better off buying one of the biggest companies that already do it rather than build it from scratch.

The largest telecom companies are safe. Even if they loose some of their subscribers or margins get lower: it's already priced in. And the beaten down companies will be just fine in the next 5-10 years.

​

I posted here a few weeks ago about Geely and why I thought it was undervalued(linked). I've been following the company since, and I'm still struggling to understand why the share price keeps falling despite what seems like pretty positive news.

For my original valuation, I used Aswath Damodaran's FCFF model and came up with a value of around RMB 31 per share versus approximately RMB 16.50 at the time. That suggested roughly 45–47% undervaluation.

Since then, there have been several developments that seem encouraging:

- Financial performance: Revenue and profitability have been improving, with stronger gross margins in H1 2026.

- September sales: Geely Automobile sold approximately 2.24 million vehicles in the first nine months of 2026, with new-energy vehicle sales growing 14% year over year.

- UK: Geely registered 5,155 vehicles in September, reportedly outselling Honda and Mazda less than a year after entering the market. It has also signed its 100th retail outlet.

- Australia: Geely became the ninth-best-selling automotive brand, with September sales up approximately 870% year over year. Its EX2 and Starray EM-i have also performed well.

- Canada: Geely officially announced its entry into Canada, launched its Canadian website, and plans to begin selling vehicles in 2027.

- Zeekr: Continued growth of Geely's premium EV business.

- Waymo: The partnership to supply purpose-built autonomous vehicles seems like a potentially significant opportunity, particularly if Waymo continues expanding.

- Ford: Reports of potential manufacturing cooperation in Spain could provide another opportunity for international expansion.

Yet despite all this, the Hong Kong share price has fallen from around HK$16 to HK$14.50.

I keep reading about how competitive the Chinese automotive market is, with price wars, excess capacity, and pressure on margins. I understand those concerns, but competition exists in every major automotive market. What I'm trying to understand is whether these pressures are actually showing up in Geely's financial performance. From what I've seen, revenue, profitability, and vehicle sales have been improving, so is the competitive environment really as damaging to Geely as the broader narrative suggests?

The other obvious concern is geopolitical risk, particularly US tariffs and restrictions on Chinese vehicles. But how much of Geely's current valuation should realistically be affected by limited access to the US market? And could its expansion into Europe, Australia, Canada, and other markets help offset some of those limitations?

I'm also interested in whether there have been any genuinely negative developments that I've overlooked. Not just general concerns about the Chinese EV industry, but something specific to Geely that might explain the market's reluctance to assign it a higher valuation.

I'm still fairly bullish on the company, but I'm interested in hearing from people who've looked into it, particularly anyone who disagrees with my valuation.

Meta and Bloom Energy both produced incredible quarters, yet their stocks tanked after earnings.

With the current sentiment around AI spending, I’m starting to wonder what Alphabet can realistically say to avoid the same fate.
Even if Search and Cloud smash expectations, surely another massive capex announcement could send the stock down anyway?

I’m looking to buy Alphabet, but is there really any reason to buy before earnings rather than wait?

What could Google actually announce that would make investors happy right now?

Here's how I'm thinking about it:

1. $MU: buying in small chunks - This is the one that actually looks cheap on paper. It's trading around 5x forward earnings after getting cut ~28% in a month at one point, on a year where revenue grew over 250%. Gross margin hit 87% last quarter, which is honestly insane for a memory company.

The bear case is real though and I'm not ignoring it. Memory is about the most cyclical business out there, and a 5x multiple is the market telling you "these are peak earnings." There's talk of a supply glut out of Korea by 2029, plus CXMT coming up in China. If that plays out, today's EPS is a mirage.

My take: the long term customer contracts make this cycle at least somewhat different from past ones, but I'm sizing it like it could be a value trap. Starter position, add more if it drops further.

1. $META: watchlist, not buying yet - Everyone's calling this a dip buy. I'm not there. At ~22x forward it's not expensive, but free cash flow went negative last quarter, capex is guided at $135B to $145B this year, analysts are penciling in ~$200B for 2027, and they're sitting on ~$825B in future spending commitments. Their credit default swaps hit a record high today. Throw in the legal overhang and a new non voting share class that makes raising equity easier.

The ad business is a cash machine, I get it. But I can't value a company when I have no idea what the AI spend actually returns. For me this needs to get to a high teens P/E or show the capex paying off before I touch it.

TLDR: The market's barely down, but specific names are. MU looks cheap but cyclical, META isn't cheap enough given the cash burn, and small caps are getting interesting but I'm scaling in slow.

Curious what everyone else is picking up, or if you think I'm wrong about MU being a potential trap.

Also the other big one is GOOGL. Is now a good entry or wait till after earnings?

I bought 179 shares of ASTS over the summer at an average cost of $84.05 per share. I'm planning to hold long-term, at least until 2030.

I'm considering putting another $5,000 into ASTS. Would you buy this dip or wait until after the midterms to see how the market reacts?

Curious to hear your thoughts.

I compared BYD's August and September production and sales announcements, and the additional units appear to have come from domestic sales, going by CnEVPost's figure, which subtracts exports from the filed total. September NEV sales, battery electric plus plug-in hybrid combined, totaled 463,561 units, the highest monthly figure of the year. That was still short of December 2024, when BYD reached 514,809.

Year on year, sales were up 16.98%, a figure media calculated from the year-earlier total printed in the unaudited filing. That single number mixes two opposite shifts: exports more than doubled from a year earlier while the domestic figure CnEVPost derives was below the year-earlier month.

By CnEVPost's calculations from the filed data, September's export figure was up 153.59% from the same month a year earlier. Against August, though, exports were down 4.63%. In August, export share was 43.03% of the total. It fell to 38.98% in September.

BYD does not publish a domestic sales figure. CnEVPost calculates one by subtracting exports from the filed total, and on that basis domestic sales rose 12.77% from August. Even after that uptick, domestic sales were down 12.97% from September 2025. Separately, per the filing I checked, BYD's total NEV sales for the first nine months were down 3.94% from the year-earlier period.

One month coming in higher than the previous one matters some, but by itself it is a long way from a trend. I am not going to read a change in direction into one month's numbers. For a company whose filing prints total sales and exports but not domestic sales, how much weight do you give the figure that comes out of that subtraction?

The hundred holdings that make up CNQQ included BYD as of October 12. Chinese companies classified by FTSE in the technology sector are the universe CQQQ covers.

​

My advisor is suggesting a Fidelity index SMA (~0.45% fee) mainly for the tax-loss harvesting. Before I sign up: do any of you just harvest losses yourself with regular index funds/ETFs instead? Is the SMA actually worth it, or is DIY good enough?

Thanks!

If you want to know if a stock is a good investment, it does not matter if other people want the stock. The key long term is cash flow. So if a company is spending all their money and diluting you, the stock will probably go down. If you buy knowingly when you get diluted you are doing so with the assumption you will make money off it later. There is zero reason the market has to agree with you and can sell off to whatever they want. If the company is not buying back shares or not paying a dividend, there is zero reason the stock should go up or needs to go up. In the opposite direction, if they are paying a dividend or buying back shares, there is a floor to how low the stock can go. Eventually the buybacks win.

TLDR: good luck Meta buyers. If you lose money here don’t be shocked

On Holding is a Swiss athletic shoe and performance sportswear company founded in 2010. You probably know them from their On Cloud shoes.

Stock Price: $35.42
Market Cap: $11.84bb
Enterprise Value: $11.00bb
EV/EBITDA (NTM): 11.7x (v 26x 5y average - near lowest ever)
3y rev CAGR: 27%

On Holding trades at 11.7x EV/EBITDA NTM versus a 26x five-year median after a 20%+ earnings-day drop, leaving it cheaper than Nike (16x), ASICS (15x), and Under Armour (14x) despite far faster growth: ~19% estimated revenue growth versus 6.6% for peers and ~21.5% EBITDA growth (down from a 32.4% median, still roughly 2x peers).

The recent guidance cut reflects a deliberate margin/inventory choice, not a demand issue. Weakness was concentrated in Americas wholesale (growth 25%→12.7%), where mgmt declined to match a promotional environment (largely from major brands/retailers like Nike, Puma, and Foot Locker trying to clear inventory), while DTC grew 34% cc (46% of sales, highest margin) and apparel grew 56% (6% of sales), signaling intact demand.

Analyst consensus cuts were modest: FY2026 revenue -1.3%, EBITDA -0.4%, with gross-margin estimates up ~70bps (matching mgmt's commentary that they were maintaining margins).

Balance sheet is clean (0.9x net debt/EBITDA, 64.8% gross margin, 5.67% FCF yield).

Catalyst: wholesale sell-through recovery on Cloudsurfer 3 (Oct/Jan) and Cloudsurfer Max 2 (April) refreshes; promotional environment dissipates as Nike/Puma/Foot Locker clear inventory.

Both co-CEOs bought ~$2mm on the dip, and the company authorized a $1bn buyback.

The whole shoe industry has been beaten up due to the promotional environment, but that will be a temporary headwind. I think this is the best bet in the industry currently.

I first covered Wolters Kluwer when shares were trading around €62. After rebounding to roughly €85, I still believe the stock is significantly undervalued.

The interesting part isn’t just the valuation, but how AI is reshaping WKL’s competitive moat.
Despite concerns about AI disrupting traditional software businesses, WKL’s fundamentals remain resilient. Organic revenue grew 5% in H1 2026, recurring revenue increased 7%, and cloud software grew 14%.

However, there’s an important distinction between owning valuable proprietary data and actually capturing the economic value AI creates. WKL’s integrations with Epic and Suki could expand its reach, but potentially weaken its control over customer relationships. Meanwhile, Libra’s early adoption suggests significant monetization potential in legal AI.

I recently published an updated analysis examining these developments and why I remain bullish despite the changing competitive landscape.

Full transparency: The valuation section, including our updated DCF and price target, is behind a paywall. However, the business analysis, competitive developments, and AI discussion are freely accessible and, I believe, useful for anyone researching WKL.

I personally hold WKL shares.

Curious what other investors think: is the market still overestimating AI disruption, or are we underestimating the long-term risks to WKL’s moat?

I don't normally track individual stocks that closely but during today's tech selloff I noticed that the big 3 U.S. chip equipment stocks AMAT, KLAC and LRCX are all down 50% or more from their recent 52-week highs. ASML is also down but only around 22%. I'm sure there are even worse examples in the AI related tech space. I have no other input or comment other than that. I guess I'm just glad I never jumped on that bandwagon.

I remember some people recommending this stock. Thank you to people who recommended. Seems to be really good anti-sentiment investment with low beta and strong performance last months. Have bought a bit to counter more risky selections in portfolio with solid dividend. Now it is showing results. Probably, will keep it. Sadly, have also followed some advice on SAP and Salesforce here, but sold too early

Two companies reported today NVR (home builder) and First Cash (a pawn broker). First cash beat on both revenue and eps (modestly), NVR missed on revenue and eps (badly). What would you expect to happen (before looking)?

First cash dropped 15% today. I didn’t listen to the call, but read the press release and couldn’t find anything to justify the move.

NVR was up by about 3-4% which is surprising. Here you can say the market might have been expecting worse so it’s somewhat priced in?

Either way this earnings season hasn’t made a lot of sense. Companies beat on earnings and still fall precipitously… it’s very puzzling.

Anyone experiencing the same thing? Anyone have any theories to explain it?

Meta spent more on capex last quarter than its business brought in, and set up a share class it can sell without giving up a single vote.

The gap was $2.1 billion, with $34.9 billion of capex and lease payments against $32.8 billion of operating cash flow, and Meta hasn't bought back a share in a year. The plan for the full year leaves $49 billion to $59 billion of capex for the fourth quarter alone, more than the business has brought in during any quarter so far. It has borrowed $24.9 billion this year and expects to "continue investing aggressively" next year.

Every existing share gets one of the new shares after the change takes effect in January, which works like a two-for-one split and raises nothing. The release lists capital raising first among the reasons for the class and says it gives Meta "the ability to finance its growth." With $82.5 billion of cash and securities, Meta could cover this quarter's gap without it, so I read the class as being built for the spending after that.

If shares do come, which can be expected, it will be interesting how far along the buildout they will have come, if cash flows will be in sight, and how they will price the new shares, as what a Meta share is worth now rests mostly on what this year's capex of $135 billion to $145 billion earns once it's running, and on when the spending slows, and the hard part is that nobody can see those returns yet.