Offshore
Photo
โ App Economy Insights
๐ This Week in Visuals:
๐ป Microsoft $MSFT
๐ฑApple $AAPL
โพ Meta $META
๐ Eli Lilly $LLY
๐ณ Mastercard $MA
โ๏ธ Starbucks $SBUX and many more!
https://t.co/MjIZrx87PD
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๐ This Week in Visuals:
๐ป Microsoft $MSFT
๐ฑApple $AAPL
โพ Meta $META
๐ Eli Lilly $LLY
๐ณ Mastercard $MA
โ๏ธ Starbucks $SBUX and many more!
https://t.co/MjIZrx87PD
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Offshore
Video
โ The All-In Podcast
David Sacks Explains How AI Will Go 1,000,000x in Four Years
"I would say the rate of progress is exponential right now on at least three key dimensions."
1) The models
"So number one is the algorithms themselves. The models are improving at a rate of, I don't know, 3-4x a year."
"They're not just getting faster and better, but qualitatively they're different."
"Remember, we started with pure LLM chatbots."
"Then we went to reasoning models."
"We didn't even get to the agents part of it yet, but that's the next big leap after reasoning models."
"We're just starting to scratch the surface there."
2) The chips
"Then you've got the chips."
"Depending on how you measure it, each generation of chips is probably 3-4x better than the last."
"It's not just the individual chips that are getting better, they're figuring out how to network them together."
"Like with NVL72, it's like a rack system to create much better performance at the datacenter level."
3) The compute
"And that would be the third area where you're seeing basically exponential progress."
"Just look at the number of GPUs that are being deployed in datacenters."
"So when Elon first started training Grok, I think they had maybe 100K GPUs. Now they're up to 300K. They're on their way to a million. Same thing with OpenAI's data center, Stargate."
"And within a couple years they'll be at, I don't know, 5M GPUs, 10M GPUs?
How Sacks gets to 1,000,000x:
"The algorithms, the chips, and the datacenters are all improving or scaling at a rate of 3-4x a year."
"That's 10x every two years."
"Where people don't understand exponential progress is that if you're getting better at 10x every two years, that doesn't mean you'll be at 20x in four years."
"It means you'll be at a 100x."
"So you multiply those things together: the algorithms, the chips, and the raw compute that's available."
100x models ๐ง
x 100x chips ๐พ
x 100x compute โก๏ธ
= 1,000,000x AI ๐ค
"You're talking about 1,000,000x increase."
"Some of which will be captured in price reductions, some of it will be in the performance ceiling, and then some of it will just be in the overall amount of AI compute that's available to the economy."
"But the impact of this thing is gonna be absolutely massive."
"And I think people still don't even appreciate that fact because they don't understand exponential progress."
tweet
David Sacks Explains How AI Will Go 1,000,000x in Four Years
"I would say the rate of progress is exponential right now on at least three key dimensions."
1) The models
"So number one is the algorithms themselves. The models are improving at a rate of, I don't know, 3-4x a year."
"They're not just getting faster and better, but qualitatively they're different."
"Remember, we started with pure LLM chatbots."
"Then we went to reasoning models."
"We didn't even get to the agents part of it yet, but that's the next big leap after reasoning models."
"We're just starting to scratch the surface there."
2) The chips
"Then you've got the chips."
"Depending on how you measure it, each generation of chips is probably 3-4x better than the last."
"It's not just the individual chips that are getting better, they're figuring out how to network them together."
"Like with NVL72, it's like a rack system to create much better performance at the datacenter level."
3) The compute
"And that would be the third area where you're seeing basically exponential progress."
"Just look at the number of GPUs that are being deployed in datacenters."
"So when Elon first started training Grok, I think they had maybe 100K GPUs. Now they're up to 300K. They're on their way to a million. Same thing with OpenAI's data center, Stargate."
"And within a couple years they'll be at, I don't know, 5M GPUs, 10M GPUs?
How Sacks gets to 1,000,000x:
"The algorithms, the chips, and the datacenters are all improving or scaling at a rate of 3-4x a year."
"That's 10x every two years."
"Where people don't understand exponential progress is that if you're getting better at 10x every two years, that doesn't mean you'll be at 20x in four years."
"It means you'll be at a 100x."
"So you multiply those things together: the algorithms, the chips, and the raw compute that's available."
100x models ๐ง
x 100x chips ๐พ
x 100x compute โก๏ธ
= 1,000,000x AI ๐ค
"You're talking about 1,000,000x increase."
"Some of which will be captured in price reductions, some of it will be in the performance ceiling, and then some of it will just be in the overall amount of AI compute that's available to the economy."
"But the impact of this thing is gonna be absolutely massive."
"And I think people still don't even appreciate that fact because they don't understand exponential progress."
tweet
Offshore
Photo
โ Wall St Engine
WARREN BUFFETT ON ELON MUSKโS DOGE EFFORT TO CUT GOVT SPENDING:
โThe problem of controlling govโt revenue and spending is never really solvedโitโs hurt many civilizations. Bureaucracy is contagious and unchecked. I wouldnโt want the job. But itโs a job that needs to be done.โ https://t.co/lO37PL4XEA
tweet
WARREN BUFFETT ON ELON MUSKโS DOGE EFFORT TO CUT GOVT SPENDING:
โThe problem of controlling govโt revenue and spending is never really solvedโitโs hurt many civilizations. Bureaucracy is contagious and unchecked. I wouldnโt want the job. But itโs a job that needs to be done.โ https://t.co/lO37PL4XEA
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Offshore
Photo
โ Wall St Engine
WARREN BUFFETT TO STEP DOWN AS BERKSHIRE CEO AT YEAR-END
Warren Buffett just announced that the time has come for Greg Abel to take over as CEO of Berkshire Hathaway at the end of this year. He said heโll formally bring it to the board of directors tomorrow.
END OF AN ERA! https://t.co/KJdAaYCxcG
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WARREN BUFFETT TO STEP DOWN AS BERKSHIRE CEO AT YEAR-END
Warren Buffett just announced that the time has come for Greg Abel to take over as CEO of Berkshire Hathaway at the end of this year. He said heโll formally bring it to the board of directors tomorrow.
END OF AN ERA! https://t.co/KJdAaYCxcG
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Offshore
Photo
โ Investing visuals
JUST IN: WARREN BUFFETT RETIRES ๐จ
Warren Buffett just announced that Greg Abel will take over as CEO of Berkshire Hathaway $BRK.A at the end of this year.
The time has come for the GOAT to hand it over to the next generation. https://t.co/foWkZOy05L
tweet
JUST IN: WARREN BUFFETT RETIRES ๐จ
Warren Buffett just announced that Greg Abel will take over as CEO of Berkshire Hathaway $BRK.A at the end of this year.
The time has come for the GOAT to hand it over to the next generation. https://t.co/foWkZOy05L
tweet
Offshore
Photo
โ Investing visuals
A tribute to Warren Buffett retiring: 10 timeless investing lessons from the GOAT ๐งต๐ https://t.co/jUEHZNo4ID
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A tribute to Warren Buffett retiring: 10 timeless investing lessons from the GOAT ๐งต๐ https://t.co/jUEHZNo4ID
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Offshore
Photo
โ Dimitry Nakhla | Babylon Capitalยฎ
RT @DimitryNakhla: 3 days ago I highlighted $MSFT at $390๐ต as an attractive & compelling investment
Since then, $MSFT has surged +12%โ
You can find the original valuation analysis in the post attached below๐๐ฝ https://t.co/GG9cKHn3aS
A quality valuation analysis on $MSFT ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 28.38x
โข5-Year Mean: 30.91x
โขNTM FCF Yield: 2.58%
โข5-Year Mean: 2.92%
As you can see, $MSFT appears to be trading near fair value
Going forward, investors can expect to receive ~9% MORE in earnings per share & ~12% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $MSFT is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $71.56B
โขLong-Term Debt: $39.72B
$MSFT has an excellent balance sheet, an AAA S&P Credit Rating & 46x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2020: 26.4%
โข2021: 31.1%
โข2022: 34.0%
โข2023: 31.0%
โข2024: 29.7%
โขLTM: 28.8%
RETURN ON EQUITYโ
โข2020: 40.1%
โข2021: 47.1%
โข2022: 47.2%
โข2023: 38.8%
โข2024: 37.1%
โขLTM: 34.3%
$MSFT has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $86.83B
โข2024: $245.12B
โขCAGR: 10.93%
FREE CASH FLOWโ
โข2014: $27.02B
โข2024: $74.07B
โขCAGR: 10.61%
NORMALIZED EPSโ
โข2014: $2.63
โข2024: $11.80
โขCAGR: 16.19%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 8.40B
โขLTM Shares Outstanding: 7.47B
By reducing its shares outstanding ~11%, $MSFT increased its EPS by ~12% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 69.4%
โขLTM Operating Margins: 45.0%
โขLTM Net Income Margins: 35.4%
PAID DIVIDENDSโ
โข2014: $1.12
โข2024: $3.00
โขCAGR: 10.35%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~9% MORE in EPS & ~12% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $MSFT has to grow earnings at a 14.19% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (14.19%) required growth rate:
2025E: $13.16 (11.5% YoY) *FY Jun
2026E: $14.95 (13.6% YoY)
2027E: $17.51 (17.1% YoY)
$MSFT has a decent track record of meeting analyst estimates ~2 years out, but letโs assume $MSFT ends 2027 with $17.51 in EPS & see its CAGR potential assuming different multiples
32x P/E: $560.32๐ต โฆ ~18.5% CAGR
30x P/E: $525.30๐ต โฆ ~15.1% CAGR
29x P/E: $507.79๐ต โฆ ~13.3% CAGR
28x P/E: $490.28๐ต โฆ ~11.5% CAGR
27x P/E: $472.77๐ต โฆ ~9.7% CAGR
As you can see, weโd have to assume a 28x multiple for $MSFT to have attractive return potential
At 27x earnings $MSFT has ok CAGR potential
$MSFT is one of the highest quality companies in the world & is firing on all cylinders
Although I wouldnโt want to rely on a >30x multiple, I feel comfortable accumulating $MSFT shares at ~$390๐ต while relying on 28x - 29x
I consider $MSFT a steal with a large margin of safety at $350๐ต, where I can reasonably expect 11.7% CAGR while assuming a conservative 25x
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง[...]
RT @DimitryNakhla: 3 days ago I highlighted $MSFT at $390๐ต as an attractive & compelling investment
Since then, $MSFT has surged +12%โ
You can find the original valuation analysis in the post attached below๐๐ฝ https://t.co/GG9cKHn3aS
A quality valuation analysis on $MSFT ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 28.38x
โข5-Year Mean: 30.91x
โขNTM FCF Yield: 2.58%
โข5-Year Mean: 2.92%
As you can see, $MSFT appears to be trading near fair value
Going forward, investors can expect to receive ~9% MORE in earnings per share & ~12% LESS in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $MSFT is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $71.56B
โขLong-Term Debt: $39.72B
$MSFT has an excellent balance sheet, an AAA S&P Credit Rating & 46x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2020: 26.4%
โข2021: 31.1%
โข2022: 34.0%
โข2023: 31.0%
โข2024: 29.7%
โขLTM: 28.8%
RETURN ON EQUITYโ
โข2020: 40.1%
โข2021: 47.1%
โข2022: 47.2%
โข2023: 38.8%
โข2024: 37.1%
โขLTM: 34.3%
$MSFT has great return metrics, highlighting the financial efficiency of the business
REVENUESโ
โข2014: $86.83B
โข2024: $245.12B
โขCAGR: 10.93%
FREE CASH FLOWโ
โข2014: $27.02B
โข2024: $74.07B
โขCAGR: 10.61%
NORMALIZED EPSโ
โข2014: $2.63
โข2024: $11.80
โขCAGR: 16.19%
SHARE BUYBACKSโ
โข2014 Shares Outstanding: 8.40B
โขLTM Shares Outstanding: 7.47B
By reducing its shares outstanding ~11%, $MSFT increased its EPS by ~12% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 69.4%
โขLTM Operating Margins: 45.0%
โขLTM Net Income Margins: 35.4%
PAID DIVIDENDSโ
โข2014: $1.12
โข2024: $3.00
โขCAGR: 10.35%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~9% MORE in EPS & ~12% LESS in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $MSFT has to grow earnings at a 14.19% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be slightly less than the (14.19%) required growth rate:
2025E: $13.16 (11.5% YoY) *FY Jun
2026E: $14.95 (13.6% YoY)
2027E: $17.51 (17.1% YoY)
$MSFT has a decent track record of meeting analyst estimates ~2 years out, but letโs assume $MSFT ends 2027 with $17.51 in EPS & see its CAGR potential assuming different multiples
32x P/E: $560.32๐ต โฆ ~18.5% CAGR
30x P/E: $525.30๐ต โฆ ~15.1% CAGR
29x P/E: $507.79๐ต โฆ ~13.3% CAGR
28x P/E: $490.28๐ต โฆ ~11.5% CAGR
27x P/E: $472.77๐ต โฆ ~9.7% CAGR
As you can see, weโd have to assume a 28x multiple for $MSFT to have attractive return potential
At 27x earnings $MSFT has ok CAGR potential
$MSFT is one of the highest quality companies in the world & is firing on all cylinders
Although I wouldnโt want to rely on a >30x multiple, I feel comfortable accumulating $MSFT shares at ~$390๐ต while relying on 28x - 29x
I consider $MSFT a steal with a large margin of safety at $350๐ต, where I can reasonably expect 11.7% CAGR while assuming a conservative 25x
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ: ๐๐ก๐ข๐ฌ ๐ข๐ฌ ๐๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐. ๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ.
๐๐ก๐ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง๐๐ ๐ข๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ฐ๐๐๐ญ ๐ข๐ฌ ๐ข๐ง๐ญ๐๐ง๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ง๐จ๐ญ ๐๐ ๐๐จ๐ง๐ฌ๐ญ๐ซ๐ฎ๐๐ ๐๐ฌ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐ ๐ญ๐จ ๐ฆ๐๐๐ญ ๐ญ๐ก๐ ๐ฌ๐ฉ๐๐๐ข๐๐ข๐ ๐ง๐๐๐๐ฌ ๐จ๐ ๐๐ง๐ฒ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ ๐จ๐ซ ๐ฌ๐ข๐ญ๐ฎ๐๐ญ๐ข๐จ๐ง. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐จ๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ง๐ญ๐๐ข๐ง[...]