Profit is up 20% YoY. Google is a money printing machine, and they printed over $40B last quarter. Are you kidding me.
Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
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Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#102Earlier quoted context omitted.
Not sure where you got 3.33%, looks to me like GOOGL is +9.44% YTD while GOOG is +9.1%.
Might be related to the massive drop this morning. According to yahoo finance, YTD GOOG is +1.81% and GOOGL +2.33%
Amusing how volatile these stocks are. In any case, my intent was not to boost Alphabet but to denounce the overheated state of the tech sector in general, so having the entirety of the Mag 7 fall below the baseline is no skin off my nose.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#103These alarms have been going off for a long time now. Everyone is already in too deep to admit that there’s a problem.
Sergey Brin said he would rather Google go bankrupt instead of losing the AI race. That is where the bar was set.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#104I've been seeing quite a few companies juicing short term margins and quarter to quarter maxxing even more than before, one such example: https://x.com/MaxAnderson/status/2080229375773941871 https://xcancel.com/MaxAnderson/status/2080229375773941871 --- As someone who has personally spent $500k / mo+ on Google Ads for years, I can tell you with certainty: This revenue growth in Search is artificial & extremely unheal…
> “exact match (close variant)”
I have to laugh to keep from crying.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#105Earlier quoted context omitted.
The question will be whether customers can switch. Can you install a near-SOTA model on a cluster in a data center? Of course. Compliance and operations are the sticking points. I work in healthcare IT, and it's amazing how tight the data compliance requirements are. I can't have someone in Canada look at prod data. If we told hospitals that we were handing off PHI/PII to Chinese models, they'd end our relationship d…
My primary role is cybersecurity in a regulated entity in a regulated industry, I am highly confident it is straightforward to do so based on work accomplished in only a couple of weeks. Stand up a router, stand up a Kubernetes cluster if you don't have one, stand up the necessary VMs and compute for serving inference. Two pizza team, in my experience. Customers can switch (although we can argue the speed and pain of…
> Stand up a router.
it has to be some amazing router and while the models are open-weights, the knowhow to run them efficiently surely is not?
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#106Profit is up 20% YoY. Google is a money printing machine, and they printed over $40B last quarter. Are you kidding me.
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Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#107Earlier quoted context omitted.
I'm pretty sure they didn't plan to just spend cash without any return. It raises an alarm because there is no end in sight for the money burning
Since when is investing in infrastructure burning money? If there is a huge demand for shipping goods internationally, investing in ships and planes isn't burning money. There is massive demand for compute in the world right now, Google is investing in that area. That's a good thing.
> "If there is a huge demand for shipping goods internationally,
> investing in ships and planes isn't burning money.
> There is massive demand for compute in the world right now"
There's enough hype and exuberance in the AI market that it's likely some players are going to be left holding the bag with a write-down on assets.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#108i dont understand the concern. they are putting up great financials. you have to invest ahead of the outcome. this is just classic quarterly public company earnings BS, where public markets dont reward innovation investment. they just want crank the handle financials.
The bigger issue is on the model front, can Google compete; Gemini doesnt seem to be able to compete on the heavy expert end; they are doing well on lighter faster models.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#109It could absolutely harm their long term value but keep in mind Alphabet and the other hyperscalers are generally flush with cash. Is this a lot of debt? Absolutely but the businesses are generating a lot of cash too.
Re: Alphabet's cash burn raises alarm for Big Tech as AI spending climbs
#110These alarms have been going off for a long time now. Everyone is already in too deep to admit that there’s a problem.
The alarms in this case are that the profits and margins won’t be as high as we’ve come to expect from cloud companies. Other than Oracle’s questionable spending spree, these big tech companies are still in very good financial positions. The enormous R&D and infrastructure spends are just feeling unusual to investors who got comparable with the unusually high margins and low costs for SaaS companies. Now they have to…
And then they'll be valued like more normal companies as well. Which will mean a drastic re-rating.