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Monday, November 9, 2026

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@negligible_cap 2 clicks

Negligible Capital on X

$NFLX
@convequity

Convequity on X

WSJ’s “$750B Anthropic compute bill”, which includes deals still being negotiated, is overblown as a panic. It isn't $750B a year. It's spread over about 10 years. By year 5, the fixed compute bill is about $104B a year. The math, stress-tested: assume compute eats a deliberately punishing 56% of revenue (far above where a scaled AI lab should settle), still leaving a 20% operating margin after other costs of ~24%. $104B / 56% ≈ $186B revenue in year 5 $186B / ~$40B revenue per GW ≈ 4.6 GW required $186B is also only ~2.8x today's $67B run rate. That's ~23% growth a year for five years, far slower than Anthropic is growing now. Demand isn't the problem. On paper, 4.6 GW is well inside the ~13.8 GW Anthropic has already lined up according to our ABBX. And it mostly pays as capacity comes online. The catch: what if the GW roadmap doesn't fully materialise? Only ~1.9 GW is live today. Getting even 4.6 GW running on Earth means beating power shortages, slow permits and growing local opposition to data centres. So the real risk isn't demand, it's delivery. That's why $SPCX matters. If Starship makes orbital compute work, it sidesteps the grid, the permits and the politics. The tide lifts all boats, and Anthropic is one of the biggest.
@convequity 1 click

Convequity on X

Our AI Bubble Barometer (ABBX) says the hyperscaler complex is not yet in bubble territory. Across the hyperscalers and neo-clouds we track, enterprise value relative to the capital invested in the business has fallen from 7.67x at the 15 May 2026 series start to 6.12x at the 15 Oct 2026 close. Two-year forward returns on that capital were 3.07x the cost of capital in Q2'26, down from Q1'26. Still comfortably value-creating, but the direction is lower, which fits this stage of the cycle: data centres and chips go on the books immediately while the revenue they earn arrives later. Q3 2026 reporting starts with Meta ($META) on Wed 21 Oct after the close, with Alphabet, Microsoft and Amazon the following week. We will watch whether forward returns keep falling as the capital base grows ahead of revenue. Falling returns alongside rising valuation multiples would be our classic bubble signal.
@convequity 2 clicks

Convequity on X

$META's Muse download numbers measure Meta's distribution, which was never in doubt. What decides whether Muse is a business is what the agent completes for a user, and nothing reported this week measures that. Sensor Tower puts Muse among the fastest US app launches on record, with early retention above the average for rival AI apps, and says a large and rising share of Meta's own ad spend now goes to it. That ad spend likely explains much of the install curve, and Meta can run the same ads for any product it owns. 1. Tasks completed. Nothing Meta or Sensor Tower has reported says how many sessions end in a booking, a purchase or a message sent for the user. Those are what a user would pay for, and in our view they are also where a merchant fee could come from. 2. Where the revenue shows up first. In our view Muse's first financial effect is on the ad business Meta already runs. When shopping happens inside Muse, Meta sees the whole path from what a user wants to what they buy, which sharpens its ad targeting. If users start shopping in Muse, Meta can also sell sponsored placement in its answers. Further out, ads could become part of the conversation itself, something we suggested earlier for Meta AI and which applies even more to an agent like Muse. A user preparing for their first marathon with Muse could be offered trainers, energy gels and hydration products in a conversational manner as the plan takes shape, rather than seeing an ad placed beside it. We expect Muse to show up in ad pricing before it appears as a subscription or a take rate. 3. The sharing suspension. Meta paused conversation sharing after security researchers found shared chats could expose personal and business information. That suggests people are already giving Muse real work with real data and sharing it with colleagues. It also means workplace use will meet the data-handling limits that slowed enterprise use of consumer chatbots. A real catalyst for $META will be Meta disclosing how many tasks and transactions Muse completes, especially if the numbers are impressive.

Investor Letters

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STRL: 80 new electricians a week

Sterling’s $4.1 billion backlog faces Texas permitting risk after a governor proposed a moratorium, while Connexion, Capital Asset Planning…

STRL $7.6B
Trade Ideas Flow 1 click

Roblox: Capture This Moment

Roblox’s Q3 FY26 DAUs fell year over year for the first time, while bookings declined 12% to $1.7 billion.

RBLX $35B
TSOH Investment Research 1 click

DoorDash and Google

DoorDash and Google.

DASH $79B
Stratechery by Ben Thompson – On the business, strategy, and impact of technology. 4 clicks
FND · long

FLOOR & DECOR HLDGS

Floor & Decor operates 281 warehouse-format stores selling hard-surface flooring and accessories nationwide.

FND $5B
Value Investors Club 1 click

Vicor Update, Part Four

Vicor’s Federal Circuit hearing put Foxconn’s disputed patent license under pressure, reinforcing its AI server royalty model and licensing…

VICR $6.8B
CV's Substack 3 clicks

NEW POSITION: Google LEAPS

Alphabet bought long-dated GOOGL calls after a 12.6% earnings drop, betting AI monetization and distribution overcome capex pressure and…

GOOGL $3.5T
Hated Moats 1 click

Floor & Decor 3Q26: Business Update

Floor & Decor’s 3Q26 sales rose 3% while comparable sales fell 1.4%; it cut 2027 openings to 10-15 as high mortgage rates pressure…

FND $5B
Speedwell Memos 1 click

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