Cook on the new Siri beta that's been our for three week is that its "really really great", and "could not be more excited about where the product is"
My take: Thats to be expected.Source: Gene Munster
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Cook said there are other "enormous opportunities for Apple in AI. Excited about Siri AI, and the ability to run some percentage of requests on device is strategic and a competitive weapon"
My take: The meat of Apple's AI opportunity over the next couple of years is the new Siri AI's ability to power to an upgrade cycle and bring in new users because it would be AI that just works. Other new "enormous" opportunities that will be opened up because of inference on device is likely something on wearables and an AI first device. $Apple(AAPL.US)Source: Gene Munster
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Cook adds helpful color about why supply constraints will be more significant in September.
Cook says iPhone 22% and Mac 29% growth in June was much better than expected so they pulled supply forward into June from September "and will have one quarter that they will be scrambling for supply".My take: I believe Cooks take. While the Street was modeling for iPhone (half of revenue) to grew at 21% in June, the company guided for closer to 17%, and 22% reported is higher than 17%. As for the Mac (~10% of revenue) definitely was better than the 8% they expected, finishing up 29%.Source: Gene Munster
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I think $Apple(AAPL.US) will guide September revenue inline to slightly higher than the Street.
That outlook will be impacted by two new forces, a headwind of the likely shift to a staggered iPhone release schedule over the next six months, and the tailwind of the price increase.I expect the net of those should results in the overall revenue guide for September to be inline to slightly better than the Street, which now sits up 12% y/y.My optimistic outlook may come across as aggressive considering the high bar, with the Street looking for 21% iPhone growth in June, and 18% in September, compared to the segment that was up on average 2% per year from FY22-FY25.The reason for my optimism:1. iPhone is riding the upgrade wave from the FY21 monster 39% growth.2. The staggered upgrade schedule will force people who have historically bought the new lower priced model and need a phone now to trade up to a Pro model. I expect fractional at best shipments of the foldable phone in September.3. The price increase will likely average 15%. While that jump will soften demand, the next effect should still be a net positive.Source: Gene Munster
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Important comment on $Meta Platforms(META.US) capex on the last question on the call.
CFO Susan Li says 2028 capex will focus on keeping their options open. They will spend on land and power and hold off on buying the expensive "chips" until "more cards are turned over.My take: FY28 Meta capex will go higher. If they need all of the capacity they can make through the end of 2027, they will likely need more in 2028. We are just getting started on the AI uses cases.Source: Gene Munster
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$Microsoft(MSFT.US) guide was impressive. Stock jumps from up 2% to up 8%.
Sounds like growth rates in cloud software will be stable in the teens, which suggest no bot boggy man in this guide.Sept Azure growth of 45% vs. 43% reported in June. No increase in capex.Source: Gene Munster
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$Meta Platforms(META.US) drifting lower. Now down almost 9% (was down 7% before the comment) in after hours on Cloud comments that it's not a priority.
As for timing of building a Cloud business, Zuck says that while they have a lot of demand for compute, but their higher ROI opportunities is not to sell compute, rather use the compute to drive intelligence for Meta. He kept the door open for them to build a cloud business longer. My take: Don't expect anything big on Cloud anytime soon.Source: Gene Munster
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Susan Li takes about Meta One subscriptions. New tools to create and stand out. Says new tools are coming.
My take: She did not give any numbers which means they're low. Long term subscriptions are a measurable opportunity.Source: Gene Munster
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Update on Superintelligence Lab.
Zuck says there is the intelligence aspect and data aspect. He talks about the fly wheel that data builds intelligence, which builds data and more intelligence. My take: They're not there on the data flywheel, which means they have more to go on the intelligence.Zuck keeps talking about that consumer personalized agents as a breakthrough point. That would ramp the data that Superintelligence taps exponentially.Source: Gene Munster
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Zuck talking about the broader tech industry says "there is no where near enough compute compared to the demand"
My take: Street is looking for capex from the hyperscalers to be up around 27% next year. I bet it's more than 40%. Thats good for AI infrastructure companies. $Meta Platforms(META.US)Source: Gene Munster
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Susan Li says long term it's hard to predict exact timing of buildout. Says long term investment in capex will continue to grow in 2028 and beyond. That gives them flexibly to the pace of AI adoption.
My take: Good for AI infrastructure trade.Source: Gene Munster
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$Intel(INTC.US) says they won't ramp Capex unless they were confident in customer commitments. Since they're raising Capex "significantly" next year, that means they're confident in those 10 long term customers.
Source: Gene Munster
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$Intel(INTC.US) CFO gets asked for more details on 2027 Capex "up significantly in 2027"
CFO would not give an exact number, but said they will release it at the start of next year and wanted to give investors "line of sight".My take is it will be up 20% next year. Street currently looking for flat. I expect hyperscalers to grow Capex next year by 40% plus. So yes, it's growing fast, but not as fast as the more aggressive tech companies.Source: Gene Munster
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$Intel(INTC.US) CFO says they may tap capital markets to fund Capex. That's a well traveled road with Google and Amazon doing that recently. No shame in that approach.
Source: Gene Munster
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$Intel(INTC.US) likely going lower on Capex guide.
Raising 2026 Capex $20B vs. Street at $15B.2027 is expected to be up significantly. Street is currently at $17B. I bet that it goes to $20-$25B next year.Source: Gene Munster
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$Intel(INTC.US) up 11% on June earnings.
• My bottom line. What's going on is much bigger than INTC. Results are a sign that we are still much early in AI than many think.• I think of Intel CPUs as an accessory to the AI buildout. Its business is getting pulled along by NVDA.• To put it into perspective, $NVIDIA(NVDA.US)’s GPU business is 13x bigger than Intels most exciting segment, DCAI, with NVDA expected to grow at 96% in July. Intel DCAI just printed 59% growth. Intel is more successful at beating the law of large numbers. • Intel is great and there are better AI companies to own to invest in AI. Deepwater does not own shares.• The guide ups have been getting larger over the past two quarters. Assuming they hit the high end of guidance, they guided Sep revenue up 11% this quarter, up 13% in Mar-25, up 1% in Dec-25, and up 3% in Sep-25.• This is important because it’s a sign analysts are having a hard time keeping up with the true growth. That means the Street still doesn’t get the big picture of what’s going on. What is going on is we are earlier than most believe in AI infrastructure buildout.• Margins are likely going to be flat in September, at 42%. That’s a good sign vs what we say from GOOG last night.• NVDA is 13x bigger and almost 2x.Valuation: Intel trades at 61x CY27 EPS. NVDA at 17x, and AMD at 40x.More to come on the call.Source: Gene Munster
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The odds that $Tesla(TSLA.US) and $SpaceX(SPCX.US) come together just increased.
They got a question about the topic on the call, and I was surprised they even entertained it. Elon said they have a great relationship but couldn't comment on further integration, handing it off to legal.After legal said they couldn't say much, Elon took the mic back and elaborated on the benefits the two companies bring each other, like Starlink preventing Robotaxis from going into a "Bermuda Triangle of connectivity." He said there are other benefits, too.My take: Going into the call, I thought there was an 80% chance the two companies come together in the next few years. I'm raising that to 90%.Source: Gene Munster
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Ashok Elluswamy, VP of AI Software from $Tesla(TSLA.US) says eventually Robotaxi will turn on entire states at a time.
The message from the company on Robotaxi is they're doing what they said they would. Keep it safe, learn, and reading between the lines, they think they can eventually drop a bomb on Waymo.Source: Gene Munster
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Question from the call on Robotaxi rollout: What milestones are you looking for to increase the pace of rollout?
Elon said the economics will be "so compelling" and "demand will outstrip supply". Elon says the hold up on getting more aggressive at the rollout is the march of nines. That is does 99.9% safe enough or 99.99999%.He is saying he wants more data on the safety. They have 380k miles. It's not enough to have confidence in a full rollout. $Tesla(TSLA.US)Source: Gene Munster
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Sundar says Waymo has delivered 1m home delivers through Walmart and DoorDash. Fun use case for autonomy. $Alphabet - C(GOOG.US)
Source: Gene Munster
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$Alphabet - C(GOOG.US) dips slightly more. Now down 4% on CFOs comment that Cloud margins they will go down in the back half of this year because they need to go to third parties, aka $SpaceX(SPCX.US) , to meet the demand. $Alphabet - C(GOOG.US)
As for TPU's would not answer the question about margins on TPU vs Cloud, now at 35.6% which is a record. TPUs are likely dilutive to margins but it's still small.Source: Gene Munster
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$Alphabet - C(GOOG.US) CFO says TPU sales are recognized in the $514B in Cloud backlog. The TPU number is small and will become more measurable in 2027.
Bottom line: TPU does not move the needle for GOOG and is not competitive enough to measurable hurt $NVIDIA(NVDA.US).Source: Gene Munster
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Company increase capex guide by $10B or about 4%. Said next year will continue to have significant capex investments.
Currently the Street is looking for Google to grow capex next year by about 35%. I'm at 55%.Source: Gene Munster
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$Alphabet - C(GOOG.US) Cloud up 82% y/y vs Street at up 63% and the stock is flat because fractional misses Search and Margins
Search: Street was looking for 17.1% growth, came in at 16.8%. Operating Margins: Came in at 34.0% vs. Street at 34.5%.My take: Given what we now know, the stock should be up tomorrow. The Cloud number is the most important number and it was a massive beat. Now we have to wait for the call.Source: Gene Munster
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Tonight for $Alphabet - C(GOOG.US), the key number is Cloud growth.
Streets expecting Google Cloud growth of 63% yy, unchanged from 63% in March. I think it will be above 65% with language that they’re supply constrained. For comps: AWS is expected to be 32% vs. 28% in March. Azure is expected to be 40% vs 39%. Bottom line is Google cloud is gaining share in a growth market.Source: Gene Munster