TMTB Mid-day Wrap

An early one today as I won’t be around post-close.

QQQs +90bps on a day where breadth looks as solid as I’ve seen in the past few weeks - large cap internet is up, software is ripping, and semis are doing their thing (up). Even analog semis and AMZN catching a bid!

We’ve been digesting Stratechery’s interview with OpenAI’s Sam Altman this morning, with the key tidbits that caught our attention was Sam’s mention of a plan that will come together in a “few months”:

Give us a few months and it’ll all make sense and we’ll be able to talk about the whole — we are not as crazy as it seems. There is a plan.

As I said, please give me the grace of a few more months to finish. I promise to tie the whole thing together.

Some interesting discussion in TMTB chat here and here about what this could be - maybe something to do with power or gov’t support. Gov’t support would make sense to us as the beautiful thing about building DCs is that all stakeholders aligned up and down the ecosystem, including and especially the gov’t for strategic reasons but also bc building DCs is a massive boon economically.

The AI vibes seem to be improving today after a bit of a breather the last couple of weeks (remember NVDA/TSM and others didn’t budge off highs despite the AI skepticism going around…in other words if stocks held up with all the skepticism the past couple weeks, what happens if that eases?). Set up decent here for that with hyperscale capex, possible “plan” and NVDA’s GTC all before the end of the month.

Onto to the recap….

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INTERNET

• NFLX +1.7% nice follow through after yesterday’s upgrade — Wolfe was out today with a positive note saying they are buyers of NFLX and that NFLX stock should CAGR in-line with 20%+ EPS growth. We don’t disagree.

• RDDT -2.5% breaking down below $200: Saw a couple charts being passed around today showing decreasing visibility within ChatGPT. Remember, the neg read-through is two fold here: 1) less traffic to RDDT; 2) if ChatGPT relying less on RDDT means less leverage when LLM deal comes up for renewal. Charts: