SpaceX Disappoints, AI's Free Cash Flow Shrinks, Meta Struggles | The Weekly Wrap
Novo Nordisk is losing the diet drug war, suffering a 20% EPS decline with no sign its new GLP-1 pill is closing the gap.
“...and Novo Nordisk reported 475, down 20%. Now, Novo is trying to catch up with this new GLP-1 pill, but there is no indication that this is closing the gap.”
Meta's AI build-out is crushing its free cash flow, with expenses surging 55% to vastly outpace revenue growth.
“Yes, Microsoft and Amazon had strong revenue growth, but the stress of the AI build-out is showing, and it's really hurting Meta, whose revenue grew 28%, but whose expenses grew 55%.”
Caterpillar is a hidden AI data-center play, with its power and energy division driving 73% EPS growth through generator sales.
“Now, you might think that CAT is not an AI play and you'd be wrong. Earnings per share was $8.17, up an amazing 73%... The company's power and energy division manufactures generators, engines, and gas”
SpaceX is trading at an expensive 54x revenue multiple while its AI CapEx surges and Starlink subscriber growth misses expectations.
“If we take the second quarter's revenue of 7.8 billion and annualize it... SpaceX's market cap is 1.6 trillion. So, the market cap to revenue is 54 times. A tad expensive.”
Eli Lilly has decisively won the diet drug wars, posting 33% EPS growth that proves its dominance over competitors.
“Eli Lilly and Novo Nordisk both reported and the results once again prove that Lilly has won the diet drug wars. All you need to do is look at the EPS results. Lilly posted earnings per share of 838, ”
Arista is a massive beneficiary of AI data center construction, delivering 40% EPS growth that justifies holding it as a long-term compounder.
“I've owned this stock for a long time... both companies are big beneficiaries of AI data center construction... EPS was $1.02, up 40% versus last year, and a beat... I like this story, and I'm holding”