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by jsrozner8 hours ago |
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upvoteby _diyar7 hours ago|
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Sorry what is the punch-line here supposed to be? These investments obviously increase correlation coeffs., but these are highly correlated stocks to begin with.
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upvoteby mxschumacher7 hours ago|
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valuation gains on investments are one-offs, not signs of sustained improvements in profitability that would warrant higher market caps

when those valuation gains are in turn the result of circular financing schemes (a bakery giving out money so that people buy bread from it), we're getting to a dangerous situation

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upvoteby sarjann7 hours ago|
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Circular financing is an issue if the wealth accumulation stays in the chip -> model provider ecosystem. However it seems like the labs are making quite a lot of revenue from the chips (customers).
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upvoteby applicative3 hours ago|
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Demand for compute is far outstripping what was projected in the initial rounds in which we pearl clutched over 'circular financing' - which is hardly distinguishable even from the classical bill of exchange, the core phenomenon of the money market in Bagehot's day, in which I provide you inputs and you give me a share. I keep reading people saying what amounts to: the primitive bill of exchange was circular!!; if the seller of inputs has reason to lend, so does everyone else etc etc. In fact if the projections about final sales are correct, it is plain all these deals will be fine.
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upvoteby jsrozner3 hours ago|
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The issue is simply that the posted article begins with a review of recent earnings/ revenues, but fails to discuss that a substantial part of those revenues are investment markups.

Whether it matters we don’t know yet, but it’s a fact worth noting. A better article might have tried to argue why it doesn’t matter

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upvoteby supermdguy7 hours ago|
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Wait are the hyperscalers booking unrealized gains as income? Or are they selling their positions?
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upvoteby luke54416 hours ago|
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As far as I understand GAAP reporting standards actually require them to report gains on those positions as "earnings". But they do report non-GAAP earnings sometimes excluding them. E.g. Google earnings per share last quater is $9.11 GAAP vs $2.85 non-GAAP (mainly because of SpaceX shares).
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upvoteby iknowSFR6 hours ago|
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A recent Zitron claim is that they’re booking unrealized gains tied to these private labs. Google’s net revenues being a recent example.
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upvoteby wesammikhail5 hours ago|
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It's not a "Zitron claim". it's literally in the filings...
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upvoteby fy202 hours ago|
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This is basically a bs line of reasoning, and it's easy to verify in 5 minutes (go read some SEC fillings).

Yes the investments do increase GAAP, but these are seperate line items from revenue which is what is listed in the article.

Alphabet is the biggest winner in this department, it's investments gain/losses for the same period as in the article was:

2023: -$1.45B

2024: +$2.24B

2025: +$24.90B

Yes thats a lot, but compared to it's seperate revenue growth of nearly $100B in the same period, it's not that much.

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