Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

Is Software Getting Cheap? De-Rating, but Not Cheap. Hyperscalers and Some Fintech More Interesting.

Micron. Don't Sweat The Dip, Focus On The Five Year SCA!

Hyperscalers: Is AI Capex Too High? What’s AI Return on Investment?

Alphabet. More Of The AI, Less Of The Drama

Google: Very Impressive. Higher Capex, Higher Growth & Margins

Equity Bottom-Up

<ul>
<li>Reviewing Consensus forecasts 2026-28, ie the impact of AI capex. Large operating margins expansion, even higher increase in cash flow from operations. Increasing depreciations but ~17% net income Cagr.</li>
<li>The debate is capex. Is capex growth slowing down after 2026, is 2026 the peak capex/revenue? My view is that capex growth will slowdown a lot less than Consensus expects.</li>
<li>The conundrum is: how to value stocks with high earnings growth (17%) but increasing fixed costs and slim free cash flow?</li>
</ul>


Reviewing Consensus forecasts 2026-28, ie the impact of AI capex. Large operating margins expansion, even higher increase in cash flow from operations. Increasing depreciations but ~17% net income Cagr.
The debate is capex. Is capex growth slowing down after 2026, is 2026 the peak capex/revenue? My view is that capex growth will slowdown a lot less than Consensus expects.
The conundrum is: how to value stocks with high earnings growth (17%) but increasing fixed costs and slim free cash flow?
