MSFT, TSLA, COIN, MGM and LYFT Face Bearish Trends
Something I'm thinking about a lot. What happens to the economics of the tech industry when capex goes exponential with unknown payoff?
Is there balance sheet risk (mis-understanding depreciation of GPUs)?
Are these now utilities?
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Tesla's energy business happened to reach an inflection point in Q3 2022.
What else happened in Q3 2022? The IRA was passed!
If Trump rolls back the IRA (in particular PTC for batteries) the energy business likely goes to zero margin because...batteries are a commodity.
3. $Coinbase Global, Inc.(COIN)$
Look at how the revenue mix has shifted over the past 5 years.
Coinbase isn't the company it was in the last crypto cycle.
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4. $MGM Resorts International(MGM)$
MGM stock is down 23% in the past year.
If management just keeps the buyback level flat, it could reduce shares outstanding at a 20%/yr pace right now.
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A 25% revenue CAGR AND FCF positive?
Don't sleep on Lyft.
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- Sandyboy·2025-01-26I agree on the Capex risk of $Microsoft(MSFT)$ especially on the data centres which are AI driven, after all AI can also be phased out by better technology as we see Deepseek being disruptive. The Capex may not be meaningful or may become obsolete very fast this is a risk for First adopters like MicrosoftLikeReport