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Thursday, November 5, 2026

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Buying an inference provider could make a software company's AI growth look much stronger. I partly agree with Sridhar. Ali Ghodsi's strengths extend well beyond technology into marketing, dealmaking and fundraising. I see Databricks as a very aggressive commercial operator, and staying private gives it more flexibility over which financial metrics the public gets to scrutinize. Snowflake ($SNOW) has to defend its growth alongside margins, stock-based compensation and dilution every quarter. Databricks has more room to prioritize the growth number in its public messaging while making trade-offs elsewhere. I'd like to see their full financials side by side. Separate core platform growth from inference resale, identify how much comes from AI-native customers, and quantify any benefit from changes in billing. Then compare gross profit, cash flow and dilution on the same basis. Inference is especially interesting here. A provider can collect a large customer bill while paying much of it to model or compute suppliers. Where accounting rules allow that full bill to be recognized as revenue, the business can add a lot of AI revenue for relatively little gross profit. That could make inference companies attractive acquisition targets for software vendors under pressure to show AI growth. Baseten and Fireworks come to mind, along with RadixArk and Inferact, founded by the creators of SGLang and vLLM respectively. These businesses offer serving technology and customers. An acquisition could also immediately increase the buyer's reported AI revenue, with a much smaller contribution to earnings if the acquired business has thin margins. The revenue boost would be acquired growth, so organic growth needs to remain visible. I wouldn't be surprised to see Snowflake and other publicly traded companies explore this route. If investors reward the added AI revenue more than the underlying gross profit warrants, buyers have an incentive to pay very high prices for these businesses.

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Trading Post November 5, 2026

MercadoLibre’s logistics expansion cut margins by 60 basis points, while Mercado Pago grew credit 62% with 7% NPLs.

MELI $77B
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Intel: The CPU Comeback, Discounted

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VSH Earnings Review

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Cestrian Capital Research 3 clicks

Thursday Tailwinds #13: Nov 5, 2026

Florida marinas are 92% full as boat counts rise and permits constrain new supply, creating pricing power for existing operators such as…

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CHWY · long

Chewy INC

Chewy (CHWY) is presented as a long opportunity after a prior 2022 short thesis played out.

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New Ideas From The Road

Aurelion Research increased healthcare exposure and sees opportunities in banking and defense, alongside research on Alcoa, Nike, ONON and…

AA $10BNKE $60B
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Oracle: The Party Is Almost Over

Oracle’s CDS spreads exceed 320 basis points as debt approaches $135 billion and fiscal 2027 capex targets $95 billion, amid heavy reliance…

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David Desjardins 1 click

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