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🔥 Here’s What’s Happening Now
Big news yesterday was the FOMC cutting as expected. Reading the statement and hearing Powell you here a divided Fed with a lot of uncertainty. My sense here is you have an accommodative Fed at the moment that is going to run things hot for now.
Until you see that change, which you could, and until you see AI capex come down, which you also could, you want to be in equities.
Powell did say there were downside risks to employment and upside risks to inflation, that’s stagflation for those who don’t remember. Again, Powell made a choice, focus on inflation risk or job risk, he chose jobs, which for now is accommodative for the market.
Today ought to be the more interesting day as traders can sleep on this and make better determinations.
Some things of interest to me at the moment, first is China, been talking about this for a couple of weeks….
Bitcoin is back above the 50 day…..
10 year rates are moving back up, again I would be careful with bonds here….
🧠 GenAI Cloud Spend: 4× in 3 Years — Who Wins, Who Loses
What’s new: TD Cowen’s latest cloud survey says GenAI is shifting from pilot to platform. Key callouts: companies expect public-cloud spend +22% y/y in 2025; GenAI workloads go from a single-digit share of cloud budgets today to ~90% of firms spending >10% (and 42% ≥30%) within three years; 75% already use GenAI tools (up from 66%); hosting share skews AWS 41% / Azure 39% / Google 17%; top use case = software development; top risks = data security (71%), unclear ROI (38%), model accuracy (34%). TD Cowen models global public-cloud revenues rising from $710B (2025) to $1.5T (2029), with IaaS the fastest growing segment.
Why it matters: This is the capex handoff from “GPU scarcity” to workload scale. As GenAI seeps into software dev, customer support, sales, and internal back-office, spend shifts from a few LLM experiments to multi-provider, always-on stacks (note: 63% now use 2+ GenAI tools). The winners are the providers who monetize power → compute → network → platform → ops at scale.
🏆 Likely Winners (12–36 months)
Hyperscalers / cloud platforms
Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) — demand visibility plus rising GenAI share of wallet; Azure leads in enterprise penetration while AWS dominates SMB/mid-market; GCP benefits from TPU/Vertex AI pull-through. Rating: 8.5–9/10.
AI silicon & interconnect
NVIDIA (NVDA) — still the choke point for training and agentic workloads; secular share of DC capex. 9/10.
AMD (AMD) — inference and CPU/GPU diversification; upside as multi-model strategies broaden. 8/10.
Broadcom (AVGO) & Credo (CRDO) — high-speed Ethernet/optics/PHYs; network fabric scales with cluster size. 8–8.5/10.
Data & developer platforms
Snowflake (SNOW), Datadog (DDOG), ServiceNow (NOW) — GenAI sits on data + observability + workflow orchestration; survey cited dev as most impactful use case. 8–8.5/10.
Cybersecurity (risk #1 = data security)
Palo Alto (PANW), CrowdStrike (CRWD), Zscaler (ZS), CyberArk (CYBR), Check Point (CHKP) — budget share follows risk; GenAI elevates identity, data, and API security. 8–8.5/10.
Colocation / interconnect
Equinix (EQIX), Digital Realty (DLR) — power-dense footprints in tight metros, ecosystem gravity for multi-cloud routing. 7.5–8/10.
IT services / integration
Accenture (ACN), EPAM (EPAM), Globant (GLOB), Grid Dynamics (GDYN) — agentic AI + multi-model proliferation = services pull-through. 7.5–8/10.
⚠️ Potential Losers / “Show-Me” Areas
On-prem compute vendors with low AI attach (classic server refresh narratives) — cloud IaaS is the growth engine into 2029; on-prem share slips. 5–6/10.
Colos without power/thermal density — lacking liquid cooling or high-MW sites miss AI-driven demand. 5.5–6.5/10.
SaaS names without credible GenAI features — usage/pricing uplift skews to platforms with measurable ROI; survey flags value clarity as a blocker. 6/10.
Single-model dependence — customers are adopting multi-model (63% use ≥2 tools), diluting lock-in. Vendors tied to one model/provider face churn and margin pressure. 6/10.
Positioning Playbook
Own cyber (PANW/CRWD/ZS/CYBR/CHKP) against the survey’s #1 risk (data security).
Overweight hyperscalers + networking (MSFT/AMZN/GOOGL/NVDA/AVGO/CRDO) — direct beneficiaries of a 4× GenAI spend ramp.
Data/ops platforms (SNOW/DDOG/NOW) where GenAI creates consumption + price/mix tailwinds as dev becomes the top impact area.
Multi-model and agentic AI → favors integrators (ACN/EPAM/GLOB/GDYN) and colos with dense power in constraint metros (EQIX/DLR).
Bottom line: The survey’s message is blunt — GenAI cloud spend 4× by 2028 moves the whole stack, from power to platform. Own the infrastructure and platforms that monetize scale, security, and developer productivity; underweight vendors stuck in low-density, on-prem, or single-model narratives.
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📈 Stock Corner
Today’s stock is SAP SE (SAP)…..
SAP has taken it on the chin lately but think this is well positioned to be one of the AI winners.
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🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
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Tuttle Wealth Management: Your Wealth Unleashed
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
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