Brent Thill

Alphabet is raising $80B in equity from a position of strength, not weakness. They have a massive cash flow ($126B cash), leading AI position with integrated stack (Gemini, hardware, semi infrastructure), and the AI capex cycle is still early. The dilution is manageable relative to the $4.5T market cap, and the move strategically front-runs upcoming mega IPOs (SpaceX, Anthropic, OpenAI). Alphabet's forward P/E of 28x is not extreme, and the earnings growth supports the valuation.

Amazon and Google are buys because they will be the big winners of the AI buildout over a three-to-five-year horizon. For patient investors, these hyperscalers are positioned to dominate long-term, even if near-term sentiment suffers from rising capex fears.

The massive AI capex from hyperscalers flows immediately to the receivers—semiconductors, hardware, networking, the picks and shovels of AI infrastructure. Investors should overweight the receivers of that capital, as they see the dollars now, while the ROI for the spenders is years away.

Money is flowing towards AI infrastructure and hardware such as semiconductors, memory, and physical infrastructure rather than software, amid massive capex spending by hyperscalers. AMD is seeing 35% growth and is a prime beneficiary.

Jefferies downgraded both stocks. Workday specifically has seen a CEO change, executive turnover, and investors are skeptical of its 13-14% growth targets. The market is currently punishing "legacy SaaS" companies that cannot prove immediate AI monetization. Management turnover combined with slowing growth creates a "show me" story that usually leads to multiple compression (Derating). SHORT / AVOID. An unexpected earnings beat or faster-than-anticipated AI product rollout could trigger a short squeeze.

Jefferies downgraded both stocks. Workday specifically has seen a CEO change, executive turnover, and investors are skeptical of its 13-14% growth targets. The market is currently punishing "legacy SaaS" companies that cannot prove immediate AI monetization. Management turnover combined with slowing growth creates a "show me" story that usually leads to multiple compression (Derating). SHORT / AVOID. An unexpected earnings beat or faster-than-anticipated AI product rollout could trigger a short squeeze.