Summary of a television interview · Based on the recording of the conversation
In brief
In an interview with Bloomberg TV Bulgaria, Kliment Robev discusses the quarterly results of the Magnificent Seven and the growing divergence in their share performance. In his view, what now sets the companies apart is how quickly each one monetises its artificial intelligence projects, and for now that speed is measured mainly by market share – most visibly in cloud services.
Key points
- He notes that the common thread in the results and management calls was AI, capital expenditure and data centres, with Meta, Microsoft and Alphabet monetising their investments faster, while Tesla, Amazon and Apple are losing pace.
- He sees the big battle as the one for corporate AI customers in the cloud between Microsoft’s Azure, Google Cloud and Amazon Web Services; for Amazon he sees a risk in the fact that around half of its operating profit comes from AWS, where demand is outstripping capacity.
- Apple, in his view, is the company most affected by tariffs and is moving part of its production from China to India and Vietnam; he notes that it reported around $800 million in tariff-related costs for the last quarter, with around $1.1 billion expected for the next.
- If any company were to drop out of the group, he thinks it would most likely be Tesla, whose profit fell 42% and revenue 12% year on year; he calls Elon Musk’s promise of a robotaxi service for anyone in the US who wants it by the end of next year “an absolute bluff” because of regulation, but sees humanoid robots as the company’s “lifeline”.
- He considers Microsoft to have the simplest and most scalable business model, reflected in 18% revenue growth and earnings per share of $3.65 against expectations of $3.37, while Meta shows how heavy capital spending can be funded by the Facebook and Instagram advertising business while keeping free cash flow stable.
- He warns that after a run of good news – US trade deals with the EU, Japan and South Korea, and 80% of reporting S&P 500 companies beating expectations – the exhaustion of positive factors could lead to a correction, with Nvidia’s results the next litmus test.
Context
The conversation took place at the height of the earnings season, when six of the seven companies had reported and only Nvidia was still to come. It also followed Microsoft briefly reaching a market value of $4 trillion and a jump in Meta’s shares after its results.
Views reflect his position at the date of publication and are not investment advice. Regulatory information
