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Tuesday, October 20, 2026· 11099 stock ideas· 218 writers·
20,658 views· 9,747 clicks

Is Microsoft Over-Earning on OpenAI?

Microsoft booked $24.1 billion from OpenAI in FY2026, nearly a quarter of Azure revenue, raising questions over finite, high-margin contributions to earnings growth.

MSFT $4T
MBI Deep Dives 2 clicks

From X

@AsifSuria 1 click

Asif Suria on X

Mary Barra continues to show that she is the GOAT of the automotive industry. Despite the big pullback in $GM stock today, over the last year: Ford is essentially flat Rivian $RIVN is down 5% Tesla $TSLA is down 16% Stellantis is down a whopping 60% GM is up more than 30% Pulling back the curtain 10 years, Ford generated no returns (not taking dividends into account) and Stellantis lost a third of its value. GM is up 139% over the last 10 years. Barra took on the role of CEO in January 2014 after being with the company since 1980. Obviously the ten year return pales in comparison to the returns of Tesla or the NASDAQ over that time but she has continued to do a great job in a challenging industry that has undergone tremendous change since Tesla transformed the landscape.
@ParadisLabs

Paradis on X

Bernstein on $LITE: Recent drawdowns are due to softer AI lab revenues, $CRWV financing, and macro overhangs. Not weaker infra demand. Bernstein say that the real debate is whether 2028 CPO bandwidth math holds, with bandwidth scale-up implying a 6-7x opportunity at comparable pricing. - $NVDA Vera Rubin NVL72 has 216 TB/s of NVLink vs 32.4 TB/s of scale-out. - At ~$0.44/Gbps for 3.2T CPO vs ~$0.48/Gbps for 1.6T pluggables, scale-up CPO works out to ~6x today’s scale-out pluggable market - So even ~low penetration by 2028 is material. But...Bernstein caveat this with the current favorable pricing environment has been bolstered by InP supply bottlenecks. Which circles back to the bear thesis that as technologies that do not rely on InP expand (VCSELs / Micro LEDs), S/D dynamics could move = margin impact? Feels like it's too early to tell what the sector's end-game is though, especially with continuous comments from $LITE's CEO that they have uber long-term visibility over demand.
@KEDM_COM

KEDM.com on X

Four Tree Island Advisory is once again pushing against DoubleU Games’ $11.25 per ADS bid for DoubleDown Interactive $DDI, calling it far too low given DDI’s recent performance. DDI has since delivered two strong quarters, with cash per ADS rising to over $11.18. Using Playtika’s ~4.3x EBITDA multiple (despite Playtika’s weaker balance sheet, higher leverage, and declining EBITDA), this would imply roughly $26.40 per ADS (more than double today’s price), which Four Tree Island still frames as a conservative floor.
@convequity

Convequity on X

If scale-up uses VCSEL arrays, we think Lumentum ($LITE) would compete with several vendors, eroding its valuation's scarcity premium. Many smart investors are bullish and credit Lumentum with an exclusive ability to make ultra-high-power CW (continuous-beam) lasers for scale-up links between AI chips. If those links go wide and slow (many small VCSEL or microLED emitters, each at modest speed), that case could break down. Lumentum's own Open Compute Project demo used VCSEL arrays from its smartphone 3D-sensing manufacturing platform. The demo is an in-rack proof of concept, not a replacement for every higher-power laser. Credo ($CRDO) opened a workstream with a hyperscaler and ams OSRAM to standardise wide, parallel links, citing supply-chain resiliency, targeting 2027 approval. VCSEL arrays are tested on the wafer, so they are cheap in volume. The standard would let operators buy from Coherent ($COHR), ams OSRAM and others. In that case, we think Lumentum competes on scale and cost, not scarcity: customers can switch, pricing power and margins come under pressure and share must be won. Near-term earnings can still benefit from the laser shortage, with Lumentum sold out through early 2029.
@StableBread

Fajasy on X

I went through every Boost Run $BRUN contract with disclosed terms to see how much of its $2.6B+ of total contract value (TCV) they cover. Cohere, the Canadian developer of AI models for businesses and governments, agreed on September 30, 2026, to pay $BRUN $525.6M over the agreement’s term for $NVDA’s GB300 NVL72 racks, each with 72 Blackwell Ultra GPUs. Part of the $525.6M is a prepayment $BRUN hasn’t disclosed. But if we follow the 22% average $BRUN says its prepayments run, the prepayment would be ~$116M. Each rack’s term runs 60 months, and the first racks should start in Q2 2027. Cohere can terminate and get back everything it prepaid if it hasn’t accepted a minimum number of racks by July 15, 2027. $BRUN has disclosed terms for seven contracts, and the two largest are with Cohere and Thinking Machines Lab, the AI startup founded by former OpenAI CTO Mira Murati: → Fluidstack (November 6, 2025): $63.6M over 24 months, or $31.8M/year. → 1,280 B300s, Charlotte (March 15, 2026): $116.1M over 36 months, or $38.7M/year. → 256 H200s, Raleigh (March 16, 2026): $3.7M over 12 months, or $3.7M/year. → Thinking Machines Lab (May 21, 2026): $471.7M over 36 months, or $157.2M/year. → June order, 240 GPU servers (June 8, 2026): $207.6M over 36 months, or $69.2M/year. → July order, 1,536 B300s (July 9, 2026): $222.5M over 48 months, or $55.6M/year. → Cohere (September 30, 2026): $525.6M over 60 months, or $105.1M/year. --- → Total: $1.61B, or $461.3M/year. Unnamed customers are labeled by what they rent, including $NVDA’s current B300 (Blackwell Ultra) and older H200 GPUs. $BRUN’s TCV is over $2.6B, so the other $989M+ is in deals without disclosed terms. The October 6 release calls the $2.6B “total revenue customers have committed to pay,” but the August 14 Q2 deck also counted renewal options and LOIs in TCV, and $BRUN hasn’t said whether the definition changed. So the conservative read counts only the seven contracts with disclosed terms, worth $1.61B, not the $2.6B headline.

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