Stonks: Prefer low starting multiple + margin expansion + robust topline
Joined April 2020
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BetterIRR retweeted
Free newsletter: Anthropic’s S-1 uses an anomalous quarter to con investors into becoming its exit liquidity, and explicitly states that its costs will grow aggressively as margins decline. Its $430bn in non-cancellable contracts are yet to start hitting.
wheresyoured.at/exit-liquidi…
Lot of value in these @PlanetMicroCap events, already pitched an interesting (potential) multibagger during the networking session.
Even if you pay with a convertable note, it would still be recorded as an expense no? Unless there is some funky SPV stuff.
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BetterIRR retweeted
The AI boom is narrower than almost anyone admits.
The top 10% of firms account for 99.5% of all model-serving spend, 99% of neocloud, and 95%+ of OpenAI and Anthropic billings. And 80.4% of the heaviest AI spenders run on venture capital, not their own revenue.
This is a concentrated, circular buildout. A handful of companies are the entire trade.
BetterIRR retweeted
Is the AI boom a bubble outside Tech?
📉 Rev per worker: S&P 493 flat
📉 Profit margins: S&P 493 flat
📉 Productivity boost: None
Non-tech sees AI token spend as a cost center, not growth. The macro AI story will be decided in the S&P 493, not the Mag 7. T at Apollo
If you think they can get there in say 5 years you're looking at a tripling of pre-tax income in 5 years.
On top of that, you likely have a housing recovery sometime within those 5 years further juicing things.
The base biz will also be growing, REAL had impressive share gains.
Your hyperscalers are dead money for 2 to 3 years:
-> Over earning across the board (implemented price hikes on non AI workloads via compute + memory constraints)
-> Neocloud BKs will lead to distressed GPU pricing
-> Equity investors will start paying attention to massive
1/x
