Mostly Borrowed Ideas Deep Dives, MBI Deep Dives

MBI Deep Dives

Mostly Borrowed Ideas Deep Dives

MBI is the abbreviation for “Mostly Borrowed Ideas”. Why “Mostly Borrowed Ideas?” As a generalist, I do not have a background in any particular sector. I enjoy navigating across industries, businesses, and countries to learn, understand, and connect the dots. In any case, most ideas and innovations are incremental in nature. Very few of us are smart enough to come up with truly original or groundbreaking ideas. I am Abdullah Al-Rezwan. I was born and brought up in Bangladesh. I went to University of Dhaka for my undergrad and majored in Finance. After working three and half years in Equity Research (Sell-side) covering Financial Sector in Bangladesh, I left Bangladesh to pursue my MBA in the US. I graduated within top 10% of the class from Cornell University's two-year MBA program and worked on the buy-side following my graduation. During my time at Cornell, I won two stock pitch competitions and also became finalists in four other competitions. I thoroughly enjoyed my stint as a generalist in the US large cap team at Madison Investments and covered a wide range of companies from UnitedHealth to Amazon and Boeing before US immigration reality paused my career in investment management. As my work authorization expired, I moved to Canada in January, 2021. Then in early 2022, I was able to return to the US.

Equity Bottom-Up

<ul><li>On an FX adjusted basis, Alphabet increased its revenue by 14% in 1Q’25 (~200 bps headwind from FX).</li><li>For the 11th consecutive quarters, Google network’s revenue went down.</li><li>Just when regulators are lambasting Google for their network business in court, it keeps dwindling to oblivion. </li></ul>

On an FX adjusted basis, Alphabet increased its revenue by 14% in 1Q’25 (~200 bps headwind from FX).For the 11th consecutive quarters, Google network’s revenue went down.Just when regulators are lambasting Google for their network business in court, it keeps dwindling to oblivion. 

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Alphabet reported 4Q24 results: net revenue (excl. TAC) grew by 13% YoY to US$81.6bn, and net income increased by 28% YoY to US$26.5bn, both in line with Bloomberg consensus estimate.</li><li>FY24 net income was up by 36% YoY to US$100.1bn, primarily due to the enhanced operating efficiency and savings of exit charges related to the global office space optimization.</li><li>Looking ahead, management guided total capex to reach c.US$75bn in FY25E (+43% YoY) and expected headcount growth in key areas such as AI and cloud, which will impact the margin outlook in FY25E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alphabet reported 4Q24 results: net revenue (excl. TAC) grew by 13% YoY to US$81.6bn, and net income increased by 28% YoY to US$26.5bn, both in line with Bloomberg consensus estimate.FY24 net income was up by 36% YoY to US$100.1bn, primarily due to the enhanced operating efficiency and savings of exit charges related to the global office space optimization.Looking ahead, management guided total capex to reach c.US$75bn in FY25E (+43% YoY) and expected headcount growth in key areas such as AI and cloud, which will impact the margin outlook in FY25E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alphabet (GOOG US) - Increase AI Investment to Unlock Growth Opportunities in FY25

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alphabet-inc-cl-c" target="_blank" data-smartkarma-citation="entities:11369:1" rel="noopener">Alphabet (GOOG US)</a> surely faces certain headwinds, including slowing cloud revenue growth and antitrust issues, but most analysts remain optimistic about the company's long-term prospects.</li>
<li>Investors should continue to monitor these developments closely, as they may influence Alphabet's strategic direction and financial performance in the near future.</li>
<li>This insight offers a short-term tactical entry point analysis to evaluate where to buy again <a href="https://www.smartkarma.com/entities/alphabet-inc" target="_blank" data-smartkarma-citation="entities:33361:1" rel="noopener">Alphabet</a>, keeping in mind the stock is short-term oversold (buy at discounted price).</li>
</ul>



Alphabet (GOOG US) surely faces certain headwinds, including slowing cloud revenue growth and antitrust issues, but most analysts remain optimistic about the company's long-term prospects.
Investors should continue to monitor these developments closely, as they may influence Alphabet's strategic direction and financial performance in the near future.
This insight offers a short-term tactical entry point analysis to evaluate where to buy again Alphabet, keeping in mind the stock is short-term oversold (buy at discounted price).


<ul><li>Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.</li><li>Cloud revenue growth decelerated from 35.0% YoY in 3Q’24 to 30.1% in 4Q’24.</li><li>I will note, however, that Google usually discloses every quarter that GCP grew at higher rate than overall Cloud, but in this call, they mentioned “GCP grew at a rate that was much higher than cloud overall”. </li></ul>

Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.Cloud revenue growth decelerated from 35.0% YoY in 3Q’24 to 30.1% in 4Q’24.I will note, however, that Google usually discloses every quarter that GCP grew at higher rate than overall Cloud, but in this call, they mentioned “GCP grew at a rate that was much higher than cloud overall”. 

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Hyperscalers (AMZN, GOOG, META, MSFT) revenues accelerating from 1Q25. Total revenues in 2025 ~$1.15tn, up 17% YoY.</li>
<li>Cloud (AWS, GOOG, MSFT) revenues accelerating. 2025 Cloud revenues in 2025 ~$375bn, up 25% YoY.</li>
<li>2025 Capex up 63% YoY to $376bn. 2026 Capex will increase by ~46% YoY to reach ~$550bn. I estimate ~30% increase in 2027 to reach $715bn.</li>
</ul>


Hyperscalers (AMZN, GOOG, META, MSFT) revenues accelerating from 1Q25. Total revenues in 2025 ~$1.15tn, up 17% YoY.
Cloud (AWS, GOOG, MSFT) revenues accelerating. 2025 Cloud revenues in 2025 ~$375bn, up 25% YoY.
2025 Capex up 63% YoY to $376bn. 2026 Capex will increase by ~46% YoY to reach ~$550bn. I estimate ~30% increase in 2027 to reach $715bn.


Hyperscalers’ Cloud Revenue and Capex Update

United States

Alphabet, Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.

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Alphabet (GOOG US)

Alphabet 1Q'25 Update

On an FX adjusted basis, Alphabet increased its revenue by 14% in 1Q’25 (~200 bps headwind from FX).For the 11th consecutive quarters, Google...

MBI Deep Dives

Alphabet (GOOG US) - Increase AI Investment to Unlock Growth Opportunities in FY25

Alphabet reported 4Q24 results: net revenue (excl. TAC) grew by 13% YoY to US$81.6bn, and net income increased by 28% YoY to US$26.5bn, both in...

CMB International

EQD | Is Alphabet (GOOG US) A BUY Here?

Despite facing challenges like slowing cloud revenue growth and antitrust issues, analysts are optimistic about Alphabet's long-term prospects....

Nico Rosti

Alphabet 4Q'24 Update

Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.

MBI Deep Dives

Hyperscalers’ Cloud Revenue and Capex Update

Hyperscalers' revenues and cloud revenues are accelerating from 1Q25, Capex set to increase significantly in the coming years.

Nicolas Baratte

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Alphabet 1Q'25 Update

On an FX adjusted basis, Alphabet increased its revenue by 14% in 1Q’25 (~200 bps headwind from FX).For the 11th consecutive quarters, Google...

MBI Deep Dives

Alphabet (GOOG US) - Increase AI Investment to Unlock Growth Opportunities in FY25

Alphabet reported 4Q24 results: net revenue (excl. TAC) grew by 13% YoY to US$81.6bn, and net income increased by 28% YoY to US$26.5bn, both in...

CMB International

EQD | Is Alphabet (GOOG US) A BUY Here?

​Despite facing challenges like slowing cloud revenue growth and antitrust issues, analysts are optimistic about Alphabet's long-term prospects....

Nico Rosti

Alphabet 4Q'24 Update

Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.

MBI Deep Dives

Hyperscalers’ Cloud Revenue and Capex Update

​Hyperscalers' revenues and cloud revenues are accelerating from 1Q25, Capex set to increase significantly in the coming years.

Nicolas Baratte

Despite facing challenges like slowing cloud revenue growth and antitrust issues, analysts are optimistic about Alphabet's long-term prospects....

Hyperscalers' revenues and cloud revenues are accelerating from 1Q25, Capex set to increase significantly in the coming years.