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Tuesday, November 10, 2026

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Fajasy on X

Rising memory chip prices are hitting Toast’s $TOST hardware business, so the restaurant software and payments company has been buying chips early. $TOST’s hardware and professional services gross loss widened to $85M in Q3 from $57M a year ago, and the $225M lost through September already tops the $220M lost in all of 2025. It doesn’t help that hardware revenue was flat at $45M while hardware costs rose 29% to $130M. Management has tied that pressure to rising memory chip prices, which are largely outside Toast’s control. What $TOST can control is when and how it buys, and that’s exactly what it’s been doing. It’s been buying memory chips early, which took inventory from $114M (as of December 31, 2025) to $244M (as of September 30), with another $191M of hardware purchases committed over the next 12 months. President and CFO Elena Gomez said on the Q3 call that “nothing has really changed” since the Q2 call, when she said Toast had already cut the expected memory cost for both 2026 and 2027 by using earlier hardware generations, cheaper memory, and spot-market buying. $TOST also started buying Toast Capital loans from its bank partner and holding them itself in 2026, buying $145M through September after none in the first nine months of 2025. Gomez said that lets Toast keep the full return instead of just a fee for arranging the loans. But Toast now also takes the loss when a restaurant doesn’t repay, just as the FTC challenges its practice of making the full loan due when a customer cancels. So far, Gomez says defaults are “within our expectations,” and most new loans will still go through Toast’s existing program rather than its own balance sheet.
@convequity

Convequity on X

Anthropic grew revenue 47% in the quarter OpenAI undercut it on price Anthropic's Q3 numbers in the IPO filing are best read against Q2. Revenue was $17.0bn, up 47% quarter on quarter, after 144% growth in Q2. The slowdown came as OpenAI cut prices against Anthropic with generous usage resets and extra subscriber perks. Holding 47% growth through that is a strong result. Q4 could re-accelerate. Opus 5.5 does much more engineering work per dollar than Opus 4, and it is better on other tasks too. Compute gross margin fell to 42% from 52%. Ten points is a smaller drop than many would expect, given what new capacity costs. My assumptions: capacity cost of about $35bn per GW in Q2 and about $50bn per GW for the latest AI data centers in Q3. Cost takes 48% of revenue at a 52% margin and 58% at a 42% margin. So revenue per GW rose from about $73bn ($35bn / 0.48) to about $86bn ($50bn / 0.58). Algorithmic gains offset a good part of the higher capacity cost. For next year I expect compute gross margin to keep drifting down slowly, perhaps a few more points. In my view, the higher cost of new capacity means more of the value goes to companies that can solve the energy bottleneck: SpaceX ($SPCX), and neo-clouds that have power, such as $IREN and Nebius. I will be tracking this as the roadshow starts this week.

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