Behind the video
Microsoft Stock & Google Earnings & Bessent
Overall Thesis
Kevin views Alphabet's earnings weakness as a company-specific advertising and AI monetization problem, while Microsoft's enterprise results support continued AI investment. He favors diversified AI hardware exposure and is strongly positive on a potential Marvell–Lumentum combination despite expected near-term dilution and pressure on Marvell shares.
Narratives
GOOGLAlphabetKevin attributes Alphabet's selloff to advertising and search results missing expectations, with AI chat potentially cannibalizing monetized search. He considers this a company-specific weakness rather than evidence that the overall AI investment cycle is ending.
Key Arguments
- Search, advertising and services missed expectations in the largest part of the business.
- Query growth may include AI interactions that do not generate sponsored results.
- He criticizes separating shared AI research expenses from segment results.
- Negative free cash flow, debt issuance and stock issuance accompany heavy AI investment.
Risks acknowledged
- Search revenue still grew approximately 11.9%.
- Cloud revenue and backlog were strong.
- Alphabet has substantial cash and is not facing bankruptcy.
- His query-count interpretation and subscriber-count concerns require verification.
- He hopes Google can recapture a technical level near $296 tomorrow, without expressing a firm forecast.
MRVLMarvell TechnologyKevin sees a potential Lumentum acquisition as a major step toward a vertically integrated AI optical-interconnect business. He recommends buying Marvell's dip while acknowledging near-term dilution and downside from financing such a large transaction.
Key Arguments
- Lumentum would add laser manufacturing to Marvell's ASIC, DSP and silicon-photonics capabilities.
- NVLink Fusion compatibility helps Marvell integrate products into Nvidia infrastructure.
- Increasing bandwidth requirements could push connections from copper toward optics.
- He cites revenue growth and improving pricing power.
- He wants exposure to the combined company.
Risks acknowledged
- The acquisition is unconfirmed.
- Marvell lacks the cash to fund the transaction outright.
- Debt and equity financing would create dilution.
- The ambitious strategy raises execution risk.
- Broadcom has a larger ASIC position, and copper remains cheaper.
- The trillion-dollar valuation remark is attributed to Jensen Huang and is not independently adopted as Kevin's price target.
AVGOBroadcomKevin views Broadcom as a strong ASIC leader with a more conservative copper-focused strategy than Marvell. He recommends owning both companies to participate in competing connectivity approaches and discloses exposure to both.
Key Arguments
- He cites Broadcom's leading ASIC market share and relationships with major AI customers.
- Copper can remain economical while bandwidth and distance permit.
- He considers Broadcom a cheaper alternative to Lumentum in prior valuation work.
Risks acknowledged
- Marvell is more aggressive in pursuing optical integration.
- Optics could gain importance as copper reaches technical limits.
- He emphasizes diversification and cannot identify the ultimate best-performing company.
Predictions (1)
Kevin is interested in Corning as a supplier of glass and fiber for AI optical networks. He likes the opportunity but sees the company's legacy operations as diluting its exposure to the fastest-growing business.
Key Arguments
- Scaling optical connections requires physical fiber.
- He cites supply agreements and strong pricing power.
- Copper distance constraints may increase fiber demand.
Risks acknowledged
- Only part of Corning's business provides direct exposure to the fiber boom.
- He considers the overall valuation fair rather than an obvious bargain.
- He does not own the stock.
MSFTMicrosoftKevin favors Microsoft's enterprise positioning and contrasts its strong core-business growth with Alphabet's advertising misses. He owns Microsoft and bought the dip, but questions how accounting classifications affect reported cash flow and profitability.
Key Arguments
- Azure growth and cloud revenue exceeded expectations.
- The largest agents and infrastructure segment grew while the smaller consumer segment contracted.
- Enterprise integration and GitHub support his confidence in the core business.
- Remaining performance obligations provide substantial contracted demand.
Risks acknowledged
- Investments and upfront lease payments can reduce effective cash generation relative to headline free cash flow.
- Longer depreciation schedules may flatter operating-income growth and apparent pricing power.
- He rejects a televised guest's bearish Microsoft forecast rather than endorsing it.
- The $565 target is described as a prior target already reached during the earnings reaction.
Kevin likes Lumentum's laser-manufacturing capabilities and pricing power and regrets not buying before the acquisition rumor. He expects acquisition-related upside and reiterates a conditional investment thesis tied to sustained growth and a subsequent hardware rally.
Key Arguments
- Laser fabrication could be a bottleneck and competitive moat in co-packaged optics.
- Revenue and gross-profit growth suggest improving pricing power.
- Marvell could obtain manufacturing capabilities it currently lacks.
- He characterizes a debt-extinguishment charge as a one-time distortion.
Risks acknowledged
- He previously considered Broadcom and Marvell cheaper alternatives.
- Continued upside depends on sustaining growth.
- The acquisition is only rumored.
- He does not own Lumentum.
- The balance sheet offers little excess cash relative to the proposed acquisition value.
NVDANvidiaKevin presents Nvidia as protecting its ecosystem while hedging the shift from copper to optics through investments and partnerships. His discussion concerns strategic positioning rather than a specific Nvidia return forecast.
Key Arguments
- Investments in Marvell and Lumentum provide exposure to optical technology.
- NVLink Fusion can integrate custom chips while preserving Nvidia's broader platform role.
- Using copper where practical supports near-term economics.
Risks acknowledged
- Custom ASIC suppliers compete with Nvidia's general-purpose GPUs.
- Increasing bandwidth requirements may force greater use of optical links.
DELLDell TechnologiesKevin briefly describes Dell as having become cheaper. He uses its historical performance to illustrate that a company can benefit even when only a small portion of its business is booming.
Key Arguments
- He believes Dell's valuation has become more attractive.
- A growth segment can influence the investment case for a diversified company.
Kevin is surprised by Fortinet's sharp earnings-related decline because several reported metrics and guidance figures appear favorable. He identifies service-revenue weakness as a possible explanation but does not establish a forward stock call.
Key Arguments
- He reports beats in revenue, billings and operating margin.
- He notes stronger EPS guidance and raised annual guidance.
Risks acknowledged
- Service revenue and its forecast disappointed.
- Gross margin was weaker than expected.
- He explicitly says he does not know why the shares are falling so sharply.
Kevin briefly praises T-Mobile's results and an iPhone-related handoff offering. He does not translate that operational optimism into a stock-price forecast.
Key Arguments
- Postpaid results and EPS exceeded expectations.
- Capital expenditures were below expectations.
- He views the handoff offering as strategically smart.
Kevin reacts favorably to eBay's revenue and active-buyer results. His comments describe earnings strength and the contemporaneous market reaction without a qualifying forward return prediction.
Key Arguments
- Net revenue exceeded expectations.
- Active buyers exceeded expectations.
- He describes the buyer result as encouraging.
NOWServiceNowKevin notes ServiceNow's sharp decline and treats it as another company-specific issue within a continuing AI boom. Most detailed valuation criticism comes from televised commentators and is not explicitly adopted as his own forecast.
Key Arguments
- The stock is falling sharply during the earnings reaction.
- He distinguishes software-company weakness from the broader AI hardware investment cycle.
Risks acknowledged
- He defers substantive ServiceNow analysis to a different discussion.
- Guest forecasts and valuation arguments are not independently endorsed.
Hedges & Caveats
- The Marvell–Lumentum transaction is a rumor and may not occur.
- Marvell would likely need debt and stock issuance to fund the acquisition, creating dilution and near-term share-price pressure.
- He cannot identify which hardware company will perform best and emphasizes diversification.
- He questions Microsoft's cash-flow classifications and extended depreciation schedules.
- Alphabet still has growing search revenue, strong cloud growth, substantial liquidity and a large backlog.
- His interpretation of Google's query metrics requires fact-checking.
- An Iran agreement is a condition for his anticipated hardware rally, and he explicitly acknowledges he may be wrong.
- He discloses ownership of Microsoft, Marvell and Broadcom, and no ownership of Alphabet, Lumentum or Corning.