$Amazon(AMZN.US)'s AWS growth outlook justifies a new investment narrative. Today, AWS is about 25% of sales. In five years it will likely be at least 50% of revenue.
Source: Gene Munster
Gene Munster
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$Amazon(AMZN.US) gave good news for the AI hardware trade.
Commentary on long-term Capex: said it will be “meaningful,” a “once-in-a-lifetime opportunity,” and that “we’re going to invest.”Source: Gene Munster
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From the call, it’s clear $Amazon(AMZN.US) management wants the Street to think of the company as a AI data center and chips company. Forget retail.
That been the consistent message on the call, underscored by them doing the unthinkable: giving two-year AWS revenue growth guidance of 40%+ in each of 2027 and 2028, above the just-reported 39%. They typically only guide AWS one quarter out.They’re also saying AWS will be a trillion-dollar business in 5–10 years. In CY28 the Street is at $306B. Bottom line: they’re telling the Street that AWS is going to be much, much bigger.Source: Gene Munster
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The $Intel(INTC.US) (down 17% in after hours) guide down should not be extrapolated on $NVIDIA(NVDA.US) (down 1.3%).
Bottom line: Main issue is PC demand. If there is pricing pressure on DCAI it suggests they are likely losing share.The company is calling like it is, demand is slowing because of high memory costs.That’s a read on how customers fell about their chips. If customers were demanding them, high memory costs would have little impact on demand.Nvidia has been beating numbers despite high memory costs and Jensen was bullish last week at GTC Berlin. $SpaceX(SPCX.US), $Meta Platforms(META.US), $Alphabet - C(GOOG.US) all said Capex in CY27 will be signfnalty higher than 2026. The Street is looking for 42% growth compared to $82% this year.Source: Gene Munster
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$Amazon(AMZN.US): Google results were a warning sign to Amazon investors.
Tonight the Street will likely discount favorable Sep results and an inline Dec guide because the long-term (starting second half of 2027) risk that personalized bots pose to the business is increasingly real. Some of that is getting priced in today, with shares down 3.5% going into the print vs. Nasdaq down 1.5%.Personalized bots will make it easy to find just what you’re looking for, making them a logical starting point for anything we buy.Amazon wins for three reasons: 1. Finding what you want, 2. Speed, 3. Trust. The first will increasingly be under attack.Source: Gene Munster
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AI Mode and AI Overviews are weighing on Search growth. History would say they’ll fix it over time given their new ad unit. The challenge is they now have to factor in personalized bots. $Alphabet - C(GOOG.US)
Source: Gene Munster
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Sundar recognizes the importance of personalized bots to compete with Muse, Grok Bot, Dot. Says "Agents will operate as a unifying layer across our products, so you will see us extend these agentic experiences beyond search in the Gemini app to Chrome, Android, and our workspace products as well."
My take: I want to better understand what a unifying layer means for the user experience. $Alphabet - C(GOOG.US)Source: Gene Munster
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$Alphabet - C(GOOG.US) is down 7% after Search revenue growth of 12%, below the Street’s 15% estimate. Search had been beating estimates since March of 2025.
If this was a clean miss with no one-time factors, it will likely restart fears that generative AI and increasingly personalized bots will nibble away at growth.Look for comments on the call about how they plan to navigate this upcoming wave.Source: Gene Munster
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I'm getting more concerned about $Alphabet - C(GOOG.US) because they need an answer to personalized bots.
Three key topics for earnings tonight:1. Cloud growth outlook. Expect 92% growth in September and 95% in December. I think they guide to a slight step-up in growth in December.2. Capex. Street at $201B in CY26 and $312B in CY27. I think that's the right number.3. How do they win with personalized bots? Can Google have an AI Overview and AI Mode encore to direct search traffic into personalized bot usage?Source: Gene Munster
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We're in the early stages of a multi year Mac super cycle.
This morning, $Apple(AAPL.US) announced some Mac updates, including 14-inch MacBook Pro and iMac models (M6 chips). Still waiting on the first touchscreen Mac announcement later this morning.Pricing is unchanged today. Keep in mind that late in June they raised the price of the MacBook by 18% and the iMac by 16%.My take: There is upside to the Mac over the next two years. Mac has gone from 8.6% of revenue in June 2025 to 9.5% in June 2026. Last quarter it grew 29%. The Street is expecting 12% y/y in Sep ’26, going to 6% growth in FY27 and FY28.Most important: I believe we are in the early stages of a multi-year AI-powered hardware upgrade cycle. Consumers and businesses will need to buy new hardware, even at higher prices, to fully leverage AI. That’s good for Mac growth. I expect FY27 Mac to grow above 10% (Street at 6%) and FY28 above 10% (Street at 6%).Source: Gene Munster
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I spent the weekend pushing the new Siri and am happy to report it's leap forward.
But once you've used personal agents, you ask Siri to do things it can't.That begs the question; Which is harder to copy: Apple's ecosystem or a great personal agent? I used to think the ecosystem. Now I'm not so sure.$Apple(AAPL.US) reports next Monday. The most important topic is the shifting AI goal posts. In June the conversations was around was when will the new Siri come out. Now it's what's their answer to Muse, Grok Bot and Dots.Source: Gene Munster
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Duo line watch: Apple Southdale MN had about 80 phones and sold out before doors opened at 8a.
Line at 8a opening was 75. Some people bought two. My take: the 75 line is a win for $Apple(AAPL.US) given the high price point and anyone who showed up today did not have a reservation, only fingers crossed. The line of 75 compares to other major launches. In 2018 when the first iPhone Max came out, there were 110 people in line at the Southdale store.So lines are 47% shorter, but price is 82% higher. iPhone XS Max $1.099 (2018)iPhone Duo $1,999 (2026)Source: Gene Munster
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Regarding the big AI selloff this week, we heard from Elon, Zuck, and Jensen that we’re still early, and I agree with them:
Source: Gene Munster
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Final thought going into Duo’s launch tomorrow. Don’t read too much into tomorrow because of supply noise. I still expect they’ll sell 20M units in FY27 vs. Street at around 10M.
My guess is each store will have a dozen on hand. I’ll be at a store to confirm.Lead times still showing late January, unchanged from last week.If it’s true that each store only gets a handful, many investors will discount the positive read on long online lead times over the past week, attributing them to tight supply.My read is supply is crazy tight today, but in January it will be much better. They quickly pushed preorders to late January and have held there, which tells me a big ramp is planned. $Apple(AAPL.US)Source: Gene Munster
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Fathom is live.
A new @deepwatermgmt podcast that goes deep on generational tech companies. It explores what makes the best ones great and why they will continue to matter over the next decade, focusing on lasting importance instead of the daily noise.Episode 1 covers $Apple(AAPL.US) with @dougclinton YouTube:Source: Gene Munster
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My favorite quote from last nights $Tesla(TSLA.US) call underscores why shares are going higher.
Ashok Elluswamy (head of AI) responding to a question of how close are traditional auto makers from getting autonomy right “Yeah. It's easy to get to the first 90% and make a cool-looking demo. But when you get in the long tail of this problem, it's so long that people don't realize anyone with their sane mind should not attempt to solve this problem”.Source: Gene Munster
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Elon suggests EV winter is ending.
Goal is 5m vehicles per year starting in 2030. They'll do around 2m in CY26. Implies 25% compound growth through 2030. $Tesla(TSLA.US)Source: Gene Munster
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Elon says demand for vehicles is exceeding production by a large margin and they're ramping production.
FSD is the selling point. My take: I agree FSD is now part of the conversation for many new car buyers, but not the majority. In a few years, it will be the majority. $Tesla(TSLA.US)Source: Gene Munster
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Even though there are only around 10m daily Muse users (my estimate), the product is losing a lot of money, more than any other products they've launched. Reading between the lines.
Zuckerberg says not to worry, the math will work to build out compute to get to scale to get the take rate on commerce. $Meta Platforms(META.US)Source: Gene Munster
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$Meta Platforms(META.US) CFO Susan Li says they're not giving detailed guidance for 2027, but to expect "strong" growth.
Street is currently looking for 21% growth, vs. 27% in 2027. I would consider 25% "strong".Source: Gene Munster
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Elon says in one year to 20k Optimus units per week. I would guess he is talking about exiting run rate at the end of 2027.
That implies about 1m in 2028.My take: The Optimus conversation is still considered optionality for most investors. That call option that has massive value. $Tesla(TSLA.US).Source: Gene Munster
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Zuck reminds investors that Muse (combo of models and agents) will become the center of $Meta Platforms(META.US)'s universe.
My take: In three years, Muse will become the lens consumers engage with Instagram, FB, Whats App, Reels.Source: Gene Munster
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SPCX should be up 30% today.
Here’s a great example of how Wall Street discounts what Elon says. Bottom line, analysts cut the low end of his guide in half. Last night he said they’ll exit 2027 with $500B-$1T in revenue run rate. I believe Elon implied the low was based on adding 10 GW of compute in CY27 and the high end 20 GW. My take is there’s a 75% chance they add 10 GW, and 2% chance of 20 GW. So we should focus on the low end, or $500B in ARR exiting 2027, or $125B in Dec-27. Before earnings, the Street was at $31B for Dec-27. He guided to $125B or 300% increase. $SpaceX(SPCX.US) is up 12% on that. It should be 30% plus today. This morning the Street is at $50B. Since many analysts have yet to update numbers, we look at those that have made changes, and those are at around $70B, compared to the “guide” of $125B. That’s the 50% haircut.Source: Gene Munster
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No new $NVIDIA(NVDA.US) financial metrics or guidance updates from Jensen’s GTC Berlin keynote that just wrapped.
My take: Makes sense given the October quarter ends in a week. Last night’s $SpaceX(SPCX.US) December quarter capex guide of $35-40B (street was at $19B) is a positive read-through for what we should hear from Nvidia on the earnings call in about a month.Source: Gene Munster
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$NVIDIA(NVDA.US) announces DSX Pod. Basically a mini data center in a container the size of a bus. They can be connected. Each one has cluster of Vera Rubins, connected and cooled. Little onsite assembly.
Bottom line is it speeds up the time that it takes to spin up a data center from around 4-5 months to a month. Less wasted idle compute. Makes the ROI more attractive.Source: Gene Munster