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An investing podcast + substack for people who want to compound their wealth over the long run and don't mind sailing analogies telltales.substack.com

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September 6, 202612 min

Weekend Update - W2636

▶ Explore this week’s Tape — live, sortable, drill-down → ONEOK Bought a Ratio ONEOK announced a four-point-four-billion-dollar acquisition last weekend and raised nine billion dollars to pay for it. The gap between those two numbers is the story, and it is not what the headlines carried. Four-point-four billion buys Brazos Midstream’s Permian gathering and processing assets. Five billion retires debt ¹ . Page ten of the Cash Flow Memo carries ONEOK at about thirty-three billion dollars of net debt², so five billion is a real dent. The interesting part is which five billion, and what replaced it. Start with what Apollo actually bought, because nine-billion-dollar minority equity investment conceals more than it reports. Apollo gets a Class B interest in a newly formed holding company, ONEOK Holdings, L.L.C. It is nonvoting. No board seat, no liquidation preference, structurally subordinate to every existing ONEOK bond. It is entitled to fifteen percent of the operating company’s quarterly cash flow, and its total return is capped at a seven percent internal rate of return for the first nine years. ONEOK can buy the whole thing back beginning on the eighth anniversary of closing, at that same capped return ³ . Apollo took a bond’s return while standing in an equity’s place in the stack. Now what ONEOK bought. One sentence in the release explains the other twelve: the investment has been reviewed with ONEOK’s credit rating agencies, all of which consider the transaction as credit-enhancing, and ONEOK expects to receive full equity credit ⁴ . Every concession in the paragraph above is priced to earn that clause. This instrument was assembled by people who knew precisely which boxes a rating methodology checks. Pro forma 2027 leverage lands near three and a quarter times debt to EBITDA, and not one common share was issued ⁵ . Apollo, in the same release, called it flexible, high-grade capital solutions at scale, structured around ONEOK’s long-term strategic objectives. Translation: we found the boxes and built something that ticks all of them. Then the tender offer, filed the same day and buried under the acquisition headline. ONEOK is offering to repurchase up to two billion dollars of its own notes across twenty series, and the acceptance priority order tells you what it wants back. Level one is the three-point-nine-five percent notes due 2050. Level two, four-point-two percent due 2047. The list runs long-dated and low-coupon at the top, and the company adds, in a parenthetical, that most of the targeted notes currently trade below par ⁶ — below face value, because those coupons sit under what the market charges today. So ONEOK is retiring some of the lowest cash coupons on its balance sheet and funding the gap with money that costs seven percent. The cash cost of the capital went up. The ratio the agencies quote went down. Both by design. None of that makes it a bad trade. Seven percent capped is genuinely cheaper than ONEOK’s cost of common equity, every dollar of value above the cap accrues to the shareholders already there, the capital account amortizes as distributions run past the cap, and the call option hands the whole claim back inside a decade. Against issuing stock or thirty-year paper at today’s yields, it is the cheapest of the three doors. It is a well-built instrument. What it is not is a reduction in the claims on ONEOK’s cash. The leverage did not leave the company. It moved to a line the leverage ratio does not read. Midstream has built this shape before, and ONEOK has built it twice. On June 30, 2017, the company acquired every ONEOK Partners unit it did not already own ⁷ , collapsing a structurally separate claim on the same operating cash flow back into the common, because by then that claim had become the expensive way to fund a build. Nine years later there is a new structurally separate claim on the same operating cash flow, with the buy-back written into the document on day one. Call that a cycle rather than a criticism. Funding structures get cleverest at exactly the point where assets are dearest and internal cash flow is furthest from covering the plan. Oracle reports Thursday running the same trade with none of the engineering. The cashflow read is in Marcus’s column below; short version, the cash line on that page is the least useful number on it. What changes the read. The near test has a clock on it. The early tender deadline is 5 p.m. New York time on September 14, with the offers expiring September 29 ⁸ . Watch how much of the two-billion-dollar cap fills and where those 2050s clear. Fill it at a discount and the five-billion extinguishment is cheap and quick. Fall short and ONEOK finishes the job through make-whole calls, which is the expensive door. After that: Hart-Scott-Rodino clearance and a fourth-quarter close on Brazos, then the first print carrying a noncontrolling-interest line where none existed. The read breaks if the agencies deliver anything less than the full equity credit the company says it expects. Every number in this structure is priced off that one word. Wall Street’s consensus on ONEOK: a balance-sheet repair with a growth acquisition attached, and Wells Fargo took its target to a hundred and six dollars on the EBITDA outlook ⁹ . The Brazos EBITDA is real, bought at roughly seven and a half times the assets’ estimated 2027 number, with fourteen rigs running on the acreage ¹⁰ . The deleveraging is a ratio. The Tape — W2636 Universe of 94 cashflow-memo names, snap dates 2026-09-02 → 2026-09-04. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Oracle is the only name in this universe reporting before the next issue, and the leaderboard cannot price it, because the cash leg is negative by construction. Capex ran $55.7B TTM against $67.4B of revenue. Eighty-three cents of every revenue dollar, into the build. That is the cost of the build, not the flag the screens read it as, and no multiple belongs on a denominator management is deliberately spending through. What prices Oracle right now is conversion, and 45.6% NTM revenue growth is the market underwriting a backlog it has not yet seen turn into cash. Reading the negative cash line as deterioration is the screen standing in for the work. The test on the September 10 print is whether the capex guide steps up again alongside the revenue guide, or capex flattens while revenue accelerates. Only the second one shortens the payback. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-09-04.csv . NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo A Quiet Earnings Week Is When You Find Out What Management Believes Three new CEOs, four energy checks, and two guides the market read in opposite directions The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 86 companies in the Cash Flow Memo. About 13 minutes. No filler. Download the memo at telltales.us . Mike, Jason, and Hunt are back Wednesday on episode E2637. Chapter markers * Time | Segment * 0:00 | Cold open * 0:45 | Theme — Energy writes the checks * 4:45 | Deep dive — Broadcom vs. Snowflake * 8:45 | Rapid-fire * 11:45 | Close * 12:40 | Disclaimer Full transcript Cold open Ava: A quiet earnings week is when you find out what management actually believes. Only three companies in the Cash Flow Memo report over the next two weeks[^earn-orcl][^earn-len][^earn-fdx]. So this week didn’t hand us prints. It handed us decisions. Apple replaced Tim Cook[^news-aapl-ceo-20260901]. Albemarle went outside the company for its next chief executive[^news-alb-ceo-20260903]. Four energy companies committed serious capital, including a merger that would create the largest regulated electric utility in the country[^news-nee-merger-20260904]. And two enterprise software names reported on the very same Wednesday and got read in completely opposite directions. Nobody had to guess what these managements think this week. They showed you. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — Energy writes the checks Ava: Start with the loudest thing that happened in a quiet week. Four energy companies, across four completely different parts of the business, all committed capital inside seven days. Power, upstream, midstream, and LNG. Nobody was reporting. Everybody was spending. Ava: NextEra first. Shareholders on both sides approved the $66.8 billion all-stock merger with Dominion Energy — a deal that would create the largest regulated electric utility in the United States[^news-nee-merger-20260904]. And in the same week, NextEra Energy Resources committed to a $13 billion natural gas complex in Fayette County, Pennsylvania[^news-nee-gasplant-20260901]. Marcus, the cashflow take. Marcus: Notice what NextEra is paying with. It’s an all-stock merger[^news-nee-merger-20260904] — they’re issuing paper, not writing a check, and then separately committing $13 billion of cash to a gas plant[^news-nee-gasplant-20260901]. That combination tells you something the press release doesn’t. The memo already carries $82 billion of net debt on this name[^memo-nee-netdebt-20260904]. NextEra is mid-build, free cash flow is running negative, and the multiple isn’t the right frame here — what prices this company is whether the regulated rate base absorbs the spend. Stock is the currency you use when your own cash flow can’t fund the plan and you’d rather not add to the debt load. I’d read the all-stock structure as the honest signal in that announcement. Ava: On page 9 of the memo, the story is the opposite. Chevron is committing more than $7 billion over five years to more than double its Venezuelan production[^news-cvx-venezuela7b-20260902], after getting assigned additional Orinoco Belt acreage[^news-cvx-venezuela-20260903]. Mike Wirth’s framing, and I want you to sit with the phrasing: patience pays off, after two decades of staying while competitors exited following the nationalizations[^news-cvx-wirth-20260902]. Twenty years of waiting out an expropriation, filed under patience. Piper Sandler took its target to a street-high $243 on the back of oil prices[^news-cvx-piper-20260903]. Marcus: Chevron is buying volume because price isn’t going to do the work. The memo has Chevron at 16x free cash flow on $26 billion of trailing free cash flow[^memo-cvx-evfcf-20260904][^memo-cvx-fcf-20260904] — which is not a demanding number for an integrated. But the forward revenue line in the same dataset has Chevron shrinking roughly 9% over the next twelve months[^data-cvx-ntmgrowth-20260904]. That’s the context for Venezuela. When the top line is going backwards on price and mix, you either accept the decline or you go buy barrels. Wirth went and bought barrels, in the one basin he never left. What I’d watch is whether that capital shows up as production or as a write-down, because the history of that basin is not kind. Ava: Midstream, same week. ONEOK is buying Brazos Midstream’s Permian gathering and processing assets for $4.4 billion in cash[^news-oke-brazos-20260901]. And here’s the part worth slowing down for — Apollo is putting up $9 billion, as a minority equity investment in ONEOK, to fund it[^news-oke-apollo-20260830]. That is not a loan. Somebody else is buying a piece of the company so the company can buy the assets. Marcus: That structure is doing real work, and it’s the most interesting capital decision of the week. The memo carries ONEOK at $33.6 billion of net debt against $3.4 billion of free cash flow[^memo-oke-netdebt-20260904][^memo-oke-fcf-20260904]. Call it 10x net debt to free cash flow. At that level of leverage, the bond market is not where you go to fund a Permian acquisition, so ONEOK sold a piece of itself to a private-markets buyer instead. It’s a rational trade and it dilutes the people who already own it. Both of those are true at the same time, and the release only tells you the first one. Ava: And then there’s Cheniere, which is the cleanest of the four and got the least attention. Corpus Christi Stage Three reached substantial completion, the 5,000th cargo went out of the Gulf Coast, and management took the 2026 EBITDA guide up to a range of $7.9-8.4 billion, from $7.25-7.75 billion[^news-lng-ccl3-20260831][^news-lng-ebitda-20260831]. Equinor took its first cargo under the long-term agreements the same week[^news-lng-equinor-20260903]. Cheniere is on page 9 as well, at 17x free cash flow[^memo-lng-evfcf-20260904]. No merger, no arbitration claim, no private-equity partner. They finished the thing they said they’d finish and raised the number. Ava: Four companies, four balance sheets, four completely different answers to the same question. One issued stock, one bought barrels, one sold a piece of itself, and one just built the plant. And not a single one of them reported earnings this week. Deep dive — Broadcom vs. Snowflake Ava: Now the part that should bother you. Wednesday, September 2. Two companies on page 2 of the Cash Flow Memo both reported, both beat, and the market treated them like they were in different industries on different continents. Ava: Broadcom: third-quarter adjusted earnings of $3.32 a share, ahead of expectations[^news-avgo-q3eps-20260902]. Then the fourth-quarter revenue guide came in at $34.8 billion against a consensus of $35.03 billion[^news-avgo-q4guide-20260902]. Snowflake, same day: quarterly revenue of $1.5 billion, and management raised the full-year product revenue guide to $6.07 billion[^news-snow-q2-20260902]. Shares jumped on adoption of the AI coding tools, with more than 60% of accounts now using the AI offerings[^news-snow-aiadoption-20260902]. One of those stocks got sold. The other one ripped. Marcus, the cashflow take. Marcus: Broadcom is the surprising one, because it beat and got sold anyway. Going into that print, the memo had Broadcom at 53x free cash flow, on $34 billion of it[^memo-avgo-evfcf-20260904][^memo-avgo-fcf-20260904]. The page was drafted two days before he reported, so that is a clean pre-print anchor, and it says the market was already paying a full price. Then the guide came in roughly $200 million light[^news-avgo-q4guide-20260902]. On a quarter that size, that is inside the rounding error of anybody’s model. It got treated as information anyway. That’s what a multiple that full does to you. It removes your tolerance for a guide that isn’t perfect. We re-anchor when the fiscal third-quarter filing lands. Ava: $200 million. On $35 billion. Marcus: Now put Snowflake next to it, because the pair is the whole point. The memo had Snowflake at 100x free cash flow going into the same Wednesday[^memo-snow-evfcf-20260904]. And the forward revenue line has Snowflake growing about 29% over the next twelve months, against Broadcom’s 65%[^data-snow-ntmgrowth-20260904][^data-avgo-ntmgrowth-20260904]. Twice the multiple, less than half the growth. I’d hold that read carefully rather than hard, because a raised guide is a real fact, and the sell-side point about accelerating against hard comparisons is a fair one[^news-snow-analyst-20260903]. But whatever is setting the gap between these two names, it isn’t the growth rates. We re-anchor on both when the filings land. Ava: So what is setting it? Marcus: Direction of surprise, not level of value. Both managements said the same thing this week — demand is fine, timing and supply are the constraint. The market paid 100x for the version of that sentence that came with an upward revision[^memo-snow-evfcf-20260904], and marked down the version that came with a rounding error. That’s a statement about how the market is pricing revisions right now, and I’d weight it as the more durable read of the two prints. Ava: Which is a polite way of saying the tape is trading the delta and ignoring the denominator. Same Wednesday. Same page of the memo. Same story about AI demand. And the company generating $34 billion of free cash flow[^memo-avgo-fcf-20260904] is the one that got punished. If you want the one sentence to carry out of this segment, it’s that anybody telling you the market repriced AI this week is describing a mood, not a mechanism. It repriced two guidance revisions. That’s a much smaller thing, and it’s much easier to be wrong about. Rapid-fire Ava: Lightning round, and it’s a leadership round. Ava: Apple. John Ternus officially took over as chief executive from Tim Cook, ending a 15-year tenure[^news-aapl-ceo-20260901]. Ternus’s first internal memo talked up the product pipeline and a, quote, phenomenal iPhone launch on September 9[^news-aapl-iphone-20260901]. Phenomenal. Eight days into the job, describing a product he inherited. The memo has Apple at 34x free cash flow on $136 billion of it, with $76 billion of net cash on the balance sheet[^memo-aapl-evfcf-20260904][^memo-aapl-fcf-20260904][^memo-aapl-netcash-20260904]. Whatever Ternus wants to do, he has the means. Less fun: a UK class action is seeking £2 billion, about $2.7 billion, over App Tracking Transparency[^news-aapl-uklawsuit-20260903]. Ava: Albemarle went outside. Ragnar Udd, from BHP, becomes president and chief executive effective February 1, 2027, with Kent Masters moving to executive chairman[^news-alb-ceo-20260903]. Same week, Albemarle is preparing to reopen the Kings Mountain lithium mine in Cleveland County after finishing dewatering[^news-alb-kingsmountain-20260903]. A mining executive to run a lithium company that’s reopening a mine. The board was not subtle. The stock fell about 2% on the news[^news-alb-stock-20260903]. And ConocoPhillips seated both a new chief executive and a new chief financial officer on September 1[^news-cop-leadership-20260902]. Ava: PayPal. Stripe and Advent walked away from a $53 billion bid to take the company private[^news-pypl-stripeadvent-20260828]. Days later, another 251 jobs cut at the San Jose headquarters, part of a multiyear restructuring under new chief executive Enrique Lores[^news-pypl-layoffs-20260904]. The memo has PayPal at about 10x free cash flow[^memo-pypl-evfcf-20260904] — the cheapest name anywhere near this show tonight. Somebody was willing to pay $53 billion. Nobody is willing to pay it now. Same company, same cash flow, three weeks apart. Ava: Also in the cutting business: Uber is eliminating 3,300 roles, 10% of its workforce, to strip out management layers[^news-uber-layoffs-20260902]. The specifics are unusually precise for a layoff announcement — a 20% reduction in the number of employees sitting seven or more levels below the chief executive, and half as many teams with only one or two direct reports[^news-uber-layoffs-structure-20260902]. That is not a cost cut dressed up as a reorganization. That is a reorganization that happens to cost less. Ava: Forward week. Oracle reports Thursday[^earn-orcl]. Lennar the following Wednesday[^earn-len]. FedEx Thursday after that, and FedEx just agreed to sell its Supply Chain logistics arm to CMA CGM for $1.4 billion, so the print will have a story attached[^earn-fdx][^news-fdx-cmacgm-20260903]. Three reports in two weeks. That’s the whole calendar. Close Ava: That’s the show. A quiet earnings week is when you find out what management actually believes — and this week the boards, the balance sheets, and the buyers all said it out loud. Wall Street’s consensus this week: Broadcom’s guide was a disappointment and Snowflake’s was a triumph. One of those companies generates $34 billion of free cash flow[^memo-avgo-fcf-20260904]. It is not the one that went up. Ava: Next week the calendar finally reopens with Oracle on Thursday[^earn-orcl]. On Wednesday’s show, Hunt walked the memo to page 3 and pointed out that Nvidia’s run-rate free cash flow now sits about $50 billion ahead of Apple’s — $186 billion against $136 billion[^ep-e2636]. Hold that number next to what you just heard about who the market rewarded this week. Hunt, Jason, and Mike are back Wednesday on episode 2637. Ava: Download the memo at telltales.us, and send us a note through the Substack — we read them. Ava: The show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Disclaimer Ava: This podcast is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * Albemarle Corp. names outsider as new Charlotte CEO in 2027 . (2026, September 3). Charlotte Observer. https://www.charlotteobserver.com/news/business/article317113061.html * Albemarle names BHP executive Ragnar Udd as next CEO . (2026, September 3). Investing.com. https://www.investing.com/news/company-news/albemarle-names-bhp-executive-ragnar-udd-as-next-ceo-93CH-4887717 * Apple Ternus touts product pipeline, phenomenal Sept. 9 iPhone launch in memo . (2026, September 1). Bloomberg. https://www.bloomberg.com/news/articles/2026-09-01/apple-ternus-touts-product-pipeline-phenomenal-sept-9-iphone-launch-in-memo * Broadcom (AVGO) Q3 earnings report 2026 . (2026, September 2). CNBC. https://www.cnbc.com/2026/09/02/broadcom-avgo-q3-earnings-report-2026.html * Broadcom guides to big numbers but investors wanted more. Why we’re OK to hold for now . (2026, September 2). CNBC. https://www.cnbc.com/2026/09/02/broadcom-guides-to-big-numbers-but-investors-wanted-more-why-were-ok-to-hold-for-now.html * Cheniere announces substantial completion of CCL Stage 3 project, production and export of 5,000th LNG cargo . (2026, August 31). Shipping Herald. https://www.shippingherald.com/cheniere-announces-substantial-completion-of-ccl-stage-3-project-production-and-export-of-5000th-lng-cargo/ * Cheniere Energy: Corpus Christi expansion strengthens its LNG growth outlook . (2026, August 31). Yahoo Finance. https://finance.yahoo.com/energy/articles/cheniere-energy-corpus-christi-expansion-234831212.html * Chevron CEO says patience pays off in giant Venezuela oil deal . (2026, September 2). Bloomberg. https://www.bloomberg.com/news/articles/2026-09-02/chevron-ceo-says-patience-pays-off-in-giant-venezuela-oil-deal * Chevron gets street-high PT at Piper Sandler on booming oil prices . (2026, September 3). Investing.com. https://www.investing.com/news/stock-market-news/chevron-gets-streethigh-pt-at-piper-sandler-on-booming-oil-prices-4887973 * Chevron to expand in Venezuela operations, doubling production through $7 billion investment . (2026, September 2). CNBC. https://www.cnbc.com/2026/09/02/chevron-venezuela-operations.html * CMA CGM to acquire FedEx third-party logistics arm for $1.4 billion . (2026, September 3). EuropeSays. https://www.europesays.com/france/73958/ * ConocoPhillips names new CEO and CFO in leadership transition . (2026, September 2). BIC Magazine. https://www.bicmagazine.com/resources/people-going-places/conocophillips-names-new-ceo-and-cfo-in-leadership-transition/ * Equinor takes first LNG cargo from Cheniere . (2026, September 3). LNG Prime. https://lngprime.com/americas/equinor-takes-first-lng-cargo-from-cheniere/196203/ * John Ternus replaces Tim Cook as Apple CEO . (2026, September 1). The New York Times. https://www.nytimes.com/2026/09/01/technology/apple-tim-cook-john-ternus.html * NextEra-Dominion $66.8bn merger clears shareholder votes . (2026, September 4). Power Technology. https://www.power-technology.com/news/nextera-dominion-merger-shareholder-approval/ * NextEra Energy Resources to build $13B natural gas plant . (2026, September 1). Pittsburgh Business Times. https://www.bizjournals.com/pittsburgh/news/2026/09/01/nextera-energy-resources-gas-plant-13-bil.html * Oneok to buy natural gas assets with $9 billion Apollo stake . (2026, August 30). Bloomberg. https://www.bloomberg.com/news/articles/2026-08-30/oneok-to-buy-natural-gas-assets-with-9-billion-apollo-stake * ONEOK to grow Midland midstream footprint with Brazos acquisition . (2026, September 1). Yahoo Finance. https://finance.yahoo.com/energy/articles/oneok-grow-midland-midstream-footprint-181837691.html * PayPal adds another round of layoffs . (2026, September 4). Los Angeles Times. https://www.latimes.com/business/story/2026-09-04/paypal-adds-another-round-of-layoffs * Snowflake (SNOW) Q2 earnings report 2027 . (2026, September 2). CNBC. https://www.cnbc.com/2026/09/02/snowflake-snow-q2-earnings-report-2027.html * Snowflake is ripping after its earnings report. Two analysts say there’s more upside to come . (2026, September 3). CNBC. https://www.cnbc.com/2026/09/03/snowflake-is-ripping-two-analysts-say-theres-more-upside-to-come.html * Snowflake raises sales outlook, shares jump on AI coding tool adoption . (2026, September 2). Bloomberg. https://www.bloomberg.com/news/articles/2026-09-02/snowflake-jumps-on-revenue-outlook-uptake-of-ai-assistant * Stripe and Advent end PayPal pursuit . (2026, August 28). Axios. https://www.axios.com/2026/08/28/stripe-advent-end-paypal-pursuit * Uber to cut 3,300 corporate jobs in management overhaul . (2026, September 2). The Guardian. https://www.theguardian.com/technology/2026/sep/02/uber-to-cut-3-300-corporate-jobs-in-management-overhaul * Uber to cut 3,300 jobs in company overhaul to reduce management layers . (2026, September 2). Bloomberg. https://www.bloomberg.com/news/articles/2026-09-02/uber-to-cut-3-300-jobs-in-company-overhaul-to-reduce-management-layers * UK group tries to get $2.7 billion out of Apple over App Tracking Transparency . (2026, September 3). AppleInsider. https://appleinsider.com/articles/26/09/03/apple-sued-over-app-tracking-transparency-in-27-billion-class-action * US oil giant Chevron confirms it will expand operations in Venezuela . (2026, September 3). AP News. https://apnews.com/article/venezuela-chevron-trump-oil-4d77fa9a9d53fc8693a242fbbb07fcef * Why is Albemarle stock sliding today? (2026, September 3). Investing.com. https://www.investing.com/news/stock-market-news/why-is-albemarle-stock-sliding-today-93CH-4888185 Internal data Internal data is provided on a best efforts basis. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

September 2, 2026Episode 3630 min

Moderna Only Owns Half of Its Own Cancer Vaccine

Hunt, Mike, and Jason walk the Cash Flow Memo across energy, the federal balance sheet, and healthcare, joined by Montana in San Diego for a deep session on cancer vaccines and how immunotherapy actually works. Nvidia’s quarter and the robotaxi launches close the show. The Cashflow Memo Key Takeaways * The hydrocarbon squeeze has moved from crude to products: with Hormuz closed and Ukrainian drones hitting Russian refineries, the crack spread on No. 2 oil (diesel and heating oil) is running about $80 against a normal all-product spread of $20 to $25. * Natural gas is pinned near $3.50 for both 2026 and 2027 because supply, not demand, is the problem (supply goes 100 to 118 Bcf/d from 2022 to 2027 against demand of 100 to 117), and since most of that growth is Permian associated gas priced off crude, Hunt would hold existing gas positions but add exposure through an oil stock instead. * With the deficit estimated at $1.55 trillion this fiscal year and interest, roughly $1 trillion of defense, and $1.65 trillion of statutory Social Security effectively untouchable, Hunt expects the Fed to follow through on Jackson Hole by running the ~$6 trillion balance sheet down rather than raising Fed funds, which pushes the 10-year above its current ~4.70%. * BioNTech ended a phase 2 colorectal cancer vaccine program that showed no benefit over monitoring after surgical resection, which alongside Moderna and Merck’s phase 3 progress narrows the thesis: cancer vaccines appear to work only in immunotherapy-sensitive tumors and only paired with a checkpoint inhibitor such as Keytruda, where Moderna splits economics 50/50 with Merck under a pre-COVID deal. * Nvidia guided to roughly 70% year-over-year growth that management said would have been a doubling absent memory and TSMC capacity constraints, and at $186 billion of run-rate free cash flow it now sits $50 billion ahead of Apple on $360 billion of run-rate revenue versus Apple’s $470 billion, though the hosts expect it to finish third in self-driving behind Tesla and Waymo. Show Notes [00:00:19] This Week’s Memo Mike sets the format: 30 minutes across energy, technology, and healthcare, built on the 20-page Cash Flow Memo. [00:00:47] Exhibit C: Oil, Iran, and the Product Squeeze Iran remains a stalemate, and the energy secretary’s claim that 10 million barrels a day are getting through does not match what tanker trackers see. The constraint is products, not crude, with the crack spread on No. 2 oil near $80 against a normal $20 to $25 all-product spread. [00:02:37] Exhibit B: Gas Pinned at $3.50 Through 2027 Demand growth is fine at 100 to 117 Bcf/d from 2022 to 2027, but supply runs 100 to 118 and most of the growth is Permian associated gas priced off crude. Hunt would hold gas positions and add through oil. [00:05:10] Exhibit A: Jackson Hole and the Balance Sheet Inflation is running 3.5% against a 2% target. Hunt’s read is that the Fed tightens by running the roughly $6 trillion balance sheet down rather than raising Fed funds, which lifts the 10-year from its current 4.70%. [00:08:21] Where the Deficit Fight Actually Lands Interest is fixed, defense is just under $1 trillion and rising, and Social Security at $1.65 trillion is written into law. That leaves Medicare and Medicaid, which is why healthcare policy and healthcare investing keep converging. [00:09:10] Page 15: Setting Up the Cancer Vaccine Question Pfizer, Merck, Moderna, BioNTech, and Vertex. Moderna and Merck reported phase 3 progress, and Moderna splits whatever cash flow its cancer vaccine IP generates 50/50 with Merck under a pre-COVID deal. [00:10:24] BioNTech Ends a Phase 2 BioNTech shut a colorectal cancer vaccine program after patients who received the vaccine post-resection showed no benefit over those simply monitored. Jason and Montana argue the screen is immunotherapy sensitivity: tumors without enough accumulated mutations never stand out to the immune system in the first place. [00:12:40] Keytruda: History, Mechanism, Side Effects Approved for melanoma in September 2014, non-small cell lung and head and neck in 2015, and general solid tumors in May 2017. It is a PD-1 inhibitor that blocks the tumor’s off switch for the immune system, which is also why over 10% of patients develop thyroid disease. Tecentriq works similarly; BioNTech’s pumitamig is a newer bispecific. [00:18:42] From Lethal to Manageable Montana reframes the goal: not curing cancer but converting it to a condition patients live with. ADCs, radioligand therapy, CAR T, and bispecifics all push toward better efficacy with lower toxicity. Jason sees a step change in about five years and combination therapy five years after that. [00:22:21] Nvidia’s Quarter and the Law of Large Numbers Nvidia guided to roughly 70% growth next year, which management said would have been a doubling if memory makers and TSMC could supply it. [00:23:27] Cybercab, Waymo, and Who Wins Self-Driving Tesla’s Cybercab is launching in Austin and Waymo just went live in San Diego with roughly 40 vehicles. Nvidia sells a development kit to traditional automakers, but only Mercedes has shipped anything worth discussing, and Mike argues the automakers outsourced their competency long ago and will have to outsource self-driving too. [00:26:46] Nvidia Passes Apple on Free Cash Flow Nvidia’s run-rate free cash flow is $186 billion against Apple’s $136 billion, a $50 billion gap, on $360 billion of run-rate revenue versus Apple’s $470 billion. Download the memo at telltales.us and join us next Wednesday. Cashtags $AAPL $BNTX $F $GM $MRK $MRNA $NVDA $PFE $TSLA $TSM $VRTX This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 30, 202614 min

Weekend Update - W2635

▶ Explore this week’s Tape — live, sortable, drill-down → The Bid Was the Business PayPal spent the summer being priced by a buyer rather than by a business, and on Friday it found out which of the two it actually had. Advent and Stripe abandoned an approach that had run to roughly fifty-three billion dollars, a deal that would have ranked among the largest leveraged buyouts ever attempted ¹ . The stock gave back thirteen percent ² . Nothing about the company changed on Thursday night. What changed was the number of people willing to pay for it. Price what walked away. The Cash Flow Memo has PayPal at about six and a half times trailing free cash flow, near a fifteen percent free-cash-flow yield, on close to seven billion dollars of trailing cash generation³. Then the memo does something to PayPal it does not do to anyone on the leaderboard: it takes the name off the ranked list entirely, because an operating-cash-flow method overstates cash for a business that holds customer funds⁴. So take the haircut. Take a generous one. You are still looking at a company the public market prices in single digits, that a buyout firm and a strategic spent a summer trying to take private, and that as of Friday has no bid above the tape. Six and a half times is only a price if somebody can fund it. A fifty-three-billion-dollar take-private does not get funded out of equity. It gets funded out of the leveraged-loan and private-credit market, which spent this same week being asked for something else. CNBC reported Broadcom in talks over a chip financing package running to seventy or eighty billion dollars, forty-five senior and thirty-five junior, with Blackstone and Apollo among the firms discussed as putting up the money ⁵ . One deal, one week, aimed at chips that have not shipped. Larger than the entire PayPal buyout. Those are not literally the same firms, and the comparison is an argument rather than a report. They are the same appetite. Private credit is a finite bid, and for most of the last decade its natural habitat was the PayPal trade: mature, cash-generative, unloved, with enough coverage to carry debt. That capital now has a shorter, better-paying alternative underwriting infrastructure. When the marginal lender has somewhere better to be, the marginal buyer of cheap cash flow stops turning up, and a multiple that looked like a mispricing turns out to be the clearing price. Salesforce is the control. It gained twenty-three percent on Thursday, its best day since 2020, for producing evidence that its cash flow survives the technology everyone assumed was coming to kill it ⁶ . Nobody had to finance that. The equity market re-rated it in a single session, at no cost to anybody. PayPal’s re-rating needed a sponsor, a lender and six weeks, and it did not survive the stock rising into the offer. A leveraged bid with no premium left in it is an expensive way to own what you were already looking at. Marcus’s column below is on Micron, which has the opposite complaint: the market will pay for the cash flow, just not for more than one year of it. What changes the read. The near test is not PayPal’s next print. Enrique Lores took over in March and is running a standalone plan ⁷ ; that is a two-year story and the tape will price it as one. The test that matters is Wednesday and the weeks after it: whether the Broadcom package clears anywhere near its reported size, and where the junior tranche prices⁸. If seventy or eighty billion dollars of AI paper places easily, the bid underneath every cheap cash-flow name in the memo stays where it went. If the junior tranche struggles, capital comes back to businesses that already generate cash, and this is the first name it re-prices. The frame breaks if a strategic, rather than a sponsor, pays a real premium for a mature cash-flow business in the next two quarters. That would say the equity market is the marginal buyer again, and none of the above matters. Wall Street’s consensus on PayPal: a cheap stock that just lost its catalyst. The catalyst was never PayPal’s to lose. It belonged to the credit market, and the credit market is busy. The Tape — W2635 Universe of 94 cashflow-memo names, snap dates 2026-08-21 → 2026-08-28. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Micron is the one name in the top ten where the forward multiple and the trailing multiple are arguing, and the forward one is winning. The tape has MU at a 6.1x forward P/E against 92.8% NTM revenue growth — that combination is the market underwriting one enormous year and then a cycle turn. The trailing side says the cash has not arrived yet: a 2.6% FCF yield, because capex is consuming almost everything the memory cycle generates. Consensus reads a single-digit forward multiple on a semiconductor as cheap. It is a duration bet, and the duration is one year. The test is whether capex converts to free cash flow before pricing rolls. Thesis breaks if the NTM growth estimate starts coming down while the capex commitments stay fixed. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 91 of 92 ranked-eligible names ranked. 1 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-08-28.csv . NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo The Week the AI Build Went on Credit Oracle and Amazon burned tens of billions to build it. Salesforce sells it for 13 times free cash flow, Palantir for 125. The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the companies in the Cash Flow Memo. About 14 minutes. No filler. Download the memo at telltales.us . Hunt, Jason, and Mike are back Wednesday on episode 2636. Chapter markers * Time | Segment * 0:00 | Cold open — the build stops paying for itself * 0:45 | Theme — Who’s paying for the build: Oracle, Broadcom, Amazon * 4:45 | Deep dive — Salesforce vs. Palantir * 8:45 | Rapid-fire — Lantheus, PayPal, and the forward week * 11:45 | Close — Consensus Watch * 12:40 | Disclaimer Full transcript Cold open Ava: Three companies, three different answers to one question: who actually pays for the AI build? Oracle’s answer is that the customer does — the VA raised its contract ceiling by $17 billion[^news-orcl-va-20260820]. Broadcom’s answer is that it will co-sign, reportedly putting its balance sheet behind up to $80 billion of somebody else’s borrowing[^news-avgo-debt-20260821]. Amazon’s answer is that it will just pay — 2 million more GPUs, announced Thursday[^news-amzn-gpus-20260827]. And on the other side of all that spending, two companies sold AI software this week to enormous applause, at multiples almost 10 times apart. Somebody is wrong about what this revenue is worth. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — Who’s paying for the build Ava: Start on page 2 of the Cash Flow Memo, where Oracle, Broadcom, and Salesforce all sit. Three companies, three completely different answers to the same question this week: who is actually paying for the AI build? Ava: Oracle’s answer is that somebody else is. The Department of Veterans Affairs raised the ceiling on Oracle’s health-records contract by up to $17 billion last Thursday, taking the whole deal from just under $10 billion to roughly $27 billion, and extending the work through 2031[^news-orcl-va-20260820]. The VA’s stated reason, quoting the modification: unanticipated complexities slowed software deployments, which resulted in the contract’s ceiling being reached sooner than originally planned[^news-orcl-va-20260820]. The agency runs 164 medical facilities and now hopes to finish all of them by 2031[^news-orcl-va-20260820]. More money, more years, same job. And the market has already filed its opinion on how that trade is going: Oracle closed the week around $151 against a 52-week high of $346[^memo-orcl-price-20260828]. That is more than half the company gone in under a year, while the order book got bigger. Marcus — what does Oracle look like from the cash side right now? Marcus: Oracle is spending almost as much on capital equipment as it books in revenue, and that is the whole Oracle story at the moment. Trailing 12 months, capex ran about $56 billion[^memo-orcl-capex-20260828] against $67 billion of revenue[^memo-orcl-rev-20260828]. Free cash flow came in at negative $19 billion[^memo-orcl-fcf-20260828]. So the multiple isn’t the right frame on this name — there isn’t one, the denominator is negative, and that’s the cost of the build rather than a flag. What actually prices Oracle is whether the contracted revenue lands on schedule. The VA contract is a tell on exactly that, and it isn’t a flattering one. The ceiling went up because the deployment went slow. Ava: Broadcom’s answer is different. Broadcom will co-sign for you. Ava: CNBC reported a week ago Friday that Broadcom is in talks over a chip financing deal of upwards of $70 to $80 billion, aimed at supporting AI companies — Anthropic among them[^news-avgo-debt-20260821]. Look at the shape of it. $45 billion senior, $35 billion junior, and Blackstone and Apollo among the firms in talks to put the money up[^news-avgo-debt-20260821]. The cash is theirs. What Broadcom is putting in is its credit. And on Tuesday OpenAI publicly called Broadcom’s custom AI chip a significant advance[^news-avgo-openai-20260825], which is a generous thing to say about a supplier you would like to keep co-signing for you. Broadcom reports Wednesday[^earn-avgo]. Marcus: Vendor financing isn’t a dirty word by itself. GMAC was vendor financing, and its loss rates held under 1% through the Depression. Structure decides it. What’s different here is that Broadcom is writing a guarantee rather than making a loan, so nothing lands on its books at inception — by design. Going into the print the memo has Broadcom carrying about $65 billion of total debt[^memo-avgo-debt-20260828], so a $70-80 billion guarantee is larger than everything the company has actually borrowed. It pays the shortfall rather than the notional, so read it as a ceiling. What I’d watch Wednesday is whether that guarantee shows up in the commitments footnote at all. It has never appeared in Broadcom’s own releases. Ava: And Amazon’s answer is the oldest one in business. Amazon just pays. AWS said Thursday it is deploying an additional 2 million Nvidia GPUs — Blackwell Ultra and Rubin — across its data centers through 2028. That’s Amazon’s own newsroom, not a leak[^news-amzn-gpus-20260827]. No financing structure, no warrant, no consortium. They are writing the check. Marcus: It’s the largest check in corporate history and almost nobody frames it that way. Amazon’s trailing-12-month capex is about $173 billion[^memo-amzn-capex-20260828]. Not a guide — spent. Free cash flow is negative $8 billion as a result[^memo-amzn-fcf-20260828], and against an enterprise value near $3 trillion[^memo-amzn-ev-20260828] that is a rounding error. Which is the point. Amazon is the only one of these three that needs nobody’s permission to build. Oracle needs the contract to land on schedule. Broadcom needs the credit market to stay open. Deep dive — Salesforce vs. Palantir Ava: Two companies sold AI software this week. Both beat, both raised, both got rewarded. And the market is paying almost 10 times more for one of them than the other — for revenue that is arriving right now, in both cases. Ava: Salesforce first, back on page 2 — the company AI was supposed to kill. Wednesday’s print: revenue $11.3 billion, up 11%, adjusted earnings of $5.90 a share[^news-crm-q2-20260826]. Benioff announced Claudeforce, an expanded partnership putting Anthropic’s Claude inside the Salesforce platform[^news-crm-claudeforce-20260826], and raised the full-year outlook to about $46 billion[^news-crm-q2-20260826]. The stock rose 23% Thursday — the best day since 2020, and the second-biggest in the company’s history[^news-crm-surge-20260827]. Ava: And underneath the headline, the number that actually settles the argument. Agentforce and Data 360 together are now at nearly $3.9 billion of annual recurring revenue, up more than 210% year over year. Agentforce on its own passed $1.5 billion, up more than 240%[^news-crm-arr-20260826]. That is not a pilot. That is a product line. Ava: Palantir is the opposite trade — the company AI was supposed to make unstoppable. Revenue up 93%[^memo-pltr-growth-20260828]. And the Pentagon formally designated the Maven Smart System a program of record, which means Maven stops being a pilot with a contract ceiling and becomes a budget line, with the Army taking over the contracting[^news-pltr-maven-20260825]. Ava: And the money behind that designation has a shape worth hearing. The Pentagon’s initial Maven contract in 2024 was worth up to $480 million. The program ceiling rose to $1.3 billion in 2025. The request now is $2.3 billion over the next five years[^news-pltr-maven-20260825]. Marcus — which of those two is the market getting wrong? Marcus: The surprising one is Salesforce, and not because of the print. Salesforce is the company AI was supposed to kill — the SaaSpocalypse trade — and going into Wednesday the memo had it at about 13 times trailing free cash flow at a roughly 8% free-cash-flow yield, Q1 10-Q confirmed[^memo-crm-priorqtr-20260828]. We re-anchor when the Q2 10-Q files. That is a distressed multiple sitting on $15 billion of trailing free cash flow[^memo-crm-priorfcf-20260828]. The market spent a year pricing this business as a melting ice cube, and this week the melting ice cube sold AI and grew. Ava: A year of that thesis. One quarter to unwind it. Marcus: Palantir is the mirror image, and the business is genuinely excellent — I want that on the record before the multiple. The memo has it at about 125 times trailing free cash flow[^memo-pltr-evfcf-20260828], on roughly $3.5 billion of trailing free cash flow[^memo-pltr-fcf-20260828], growing 93%[^memo-pltr-growth-20260828]. Program-of-record is real and it’s durable; budget lines survive administrations in a way pilot contracts don’t. But at that multiple you aren’t paying for Maven. You’re paying for the next several Mavens, arriving on schedule. I’d call that more likely than not, and a long way from certain. Ava: Marcus — how much of Palantir is that one customer? Marcus: Enough that it’s the right question to ask. US government revenue was $809 million in the quarter against total revenue just under $2 billion[^news-pltr-govt-20260825], so call it a bit over 40%, and it’s the faster-growing half. Concentration in a defense budget line is a different animal from concentration in one enterprise account — the budget line is stickier and it moves slower. What it is not is diversified. For the multiple to hold, the commercial side has to keep running triple digits, and that’s the half with real competition in it. Ava: Triple digits. Forever. With competition. Marcus: Same week, same product category, same customer budgets getting bigger. One of them is priced like the AI story already ended badly, the other like it cannot end badly at all. My read is that Salesforce carries the smaller error term — you’re paying an ordinary multiple for cash that already exists, and the AI revenue sits on top as optionality. With Palantir the cash has to show up before the multiple makes sense. What I’d watch on both is the same number: net revenue retention. That’s where the AI attach either compounds or it doesn’t. Ava: Almost 10 times apart, on the same page of the memo, in the same week, selling the same thing to the same budgets. One of those two prices is going to look ridiculous in two years. Nobody in the market can tell you which one. Rapid-fire Ava: Two takeover stories this week, opposite endings, and the memo tells you why. Ava: Lantheus. Curium is buying the entire company for $102.50 a share in cash, plus up to $12 a share in contingent value rights, and Lantheus filed its preliminary merger proxy Wednesday — the document that sets up the shareholder vote and the Nasdaq delisting that follow if it closes[^news-lnth-proxy-20260826]. What is Curium buying? The memo has Lantheus at about 12 times trailing free cash flow, at an 8% free-cash-flow yield[^memo-lnth-evfcf-20260828]. Plus a pipeline that just cleared the FDA — TAUKLARIFY, its tau PET imaging agent for Alzheimer’s evaluation, approved two weeks ago[^news-lnth-fda-20260814]. The stock closed around $100 against $102.50 in cash[^memo-lnth-price-20260828]. The market is not arguing with this one. Ava: PayPal is the other ending. Bloomberg reported Friday that the Advent and Stripe consortium has dropped its pursuit — a bid that had reached $60.50 a share, about $53 billion, which would have ranked among the largest leveraged buyouts ever attempted. The board had called the earlier offer inadequate. And the reason the buyers walked is almost funny: PayPal shares had already climbed more than 40% this quarter on a strong second-quarter print, which pushed the market value up toward $53 billion on its own. The company got too expensive by being too good. Shares fell about 13% Friday[^news-pypl-bid-20260828]. Ava: And here is the part that ties this whole episode together. The memo has PayPal at 6.5 times trailing free cash flow, at a 15% free-cash-flow yield[^memo-pypl-evfcf-20260828]. That is the highest free-cash-flow yield in the entire memo universe. Somebody offered $53 billion for it and then walked away, because it got too good. That is what the market pays for cash that already exists — in the same week it paid 125 times trailing free cash flow for cash that mostly doesn’t yet[^memo-pltr-evfcf-20260828]. Ava: Forward week. Broadcom reports Wednesday, and that’s the one that matters — consensus around $3.22 a share on roughly $29 billion in revenue, though the financing question is bigger than the print[^earn-avgo]. Snowflake, also Wednesday[^earn-snow]. Five Below, Wednesday[^earn-five]. And Oracle reports the following Tuesday, September 8[^earn-orcl]. Close Ava: Wall Street’s consensus this week: AI is coming for software, so own the picks and shovels and avoid the applications. Salesforce just had its best day in six years by selling an application. Consensus was early, at best. Ava: Which brings it back to where we started. Three ways to pay for the build — Oracle bills the customer, Broadcom co-signs, Amazon writes the check. Two of the three are running free cash flow negative to do it: Oracle at negative $19 billion trailing[^memo-orcl-fcf-20260828], Amazon at negative eight[^memo-amzn-fcf-20260828]. And the cheapest cash flow in the universe couldn’t find a buyer at any price. Somebody’s arithmetic is wrong here, and it tends to show up in the free cash flow line first. That’s why we publish the Cash Flow Memo. Download it at telltales.us . Ava: On Wednesday’s show, episode 2635, Hunt said he doesn’t see how an investor can not own SpaceX. Mike didn’t disagree so much as price it. You can’t get a large margin of safety here by traditional methods, because you have to credit them for something nobody has done yet — so he underwrote it on the terrestrial data centers alone, and treated the space-based ones as option value on top. He’d wanted $80 a share; it touched $100. His answer was to buy some anyway and hold your nose, at a size small enough that being wrong doesn’t cost you the portfolio[^ep-e2635]. Hunt, Jason, and Mike are back Wednesday on episode 2636. Ava: If we got something wrong, or there’s a name you want covered, send it through the Substack. Every one of them gets seen. Ava: The show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Disclaimer Ava: This podcast is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * Amazon. (2026, August 27). AWS and NVIDIA expand collaboration to deploy 2 million additional GPUs [Press release]. About Amazon. https://www.aboutamazon.com/news/aws/aws-nvidia-2-million-gpus-ai [^news-amzn-gpus-20260827] * Broadcom debt deal expected to reach upwards of $70 billion, sources say . (2026, August 21). CNBC. https://www.cnbc.com/2026/08/21/broadcom-debt-deal-expected-to-reach-upwards-of-70-billion-sources.html [^news-avgo-debt-20260821] * Lantheus Holdings, Inc. (2026, August 14). Lantheus announces FDA approval of TAUKLARIFY (florquinitau F 18 injection), an F18-labeled tau PET imaging agent for Alzheimer’s disease [Press release]. https://lantheusholdings.gcs-web.com/news-releases/news-release-details/lantheus-announces-fda-approval-tauklarifytm-florquinitau-f-18 [^news-lnth-fda-20260814] * Lantheus Holdings, Inc. (2026, August 26). Preliminary merger proxy statement [Form PREM14A]. U.S. Securities and Exchange Commission. https://www.stocktitan.net/sec-filings/LNTH/prem14a-lantheus-holdings-inc-preliminary-merger-proxy-statement-d07f5a9c0aee.html [^news-lnth-proxy-20260826] * OpenAI says its Broadcom custom chip is a winner. What does that mean for Nvidia? (2026, August 25). CNBC. https://www.cnbc.com/2026/08/25/openai-says-its-broadcom-chip-is-a-big-advance-what-about-nvidia.html [^news-avgo-openai-20260825] * Palantir’s Maven is now an official Pentagon program of record. Here’s what guaranteed budget dollars are worth . (2026, August 25). The Motley Fool. https://www.fool.com/investing/2026/08/25/palantirs-maven-is-now-an-official-pentagon-progra/ [^news-pltr-maven-20260825] [^news-pltr-govt-20260825] * PayPal deal talks end as Advent, Stripe group abandons acquisition effort . (2026, August 28). Bloomberg. https://www.bloomberg.com/news/articles/2026-08-28/advent-stripe-consortium-is-said-to-drop-pursuit-of-paypal [^news-pypl-bid-20260828] * Salesforce, Inc. (2026, August 26). Salesforce delivers record second quarter fiscal 2027 results [Press release]. https://www.salesforce.com/news/press-releases/2026/08/26/fy27-q2-earnings/ [^news-crm-q2-20260826] * Salesforce, Inc. (2026, August 26). Salesforce delivers record second quarter fiscal 2027 results [Press release]. Salesforce Investor Relations. https://investor.salesforce.com/news/news-details/2026/Salesforce-Delivers-Record-Second-Quarter-Fiscal-2027-Results/default.aspx [^news-crm-arr-20260826] * Salesforce and Anthropic expand partnership as Benioff responds to SaaSpocalypse concerns . (2026, August 26). CNBC. https://www.cnbc.com/2026/08/26/salesforce-anthropic-partnership-claudeforce.html [^news-crm-claudeforce-20260826] * Stock market today, Aug. 27: Salesforce surges 23% on Anthropic partnership and Q2 earnings beat . (2026, August 27). The Motley Fool. https://www.fool.com/coverage/stock-market-today/2026/08/27/stock-market-today-aug-27-salesforce-surges-23-on-anthropic-partnership-and-q2-earnings-beat/ [^news-crm-surge-20260827] * VA boosts EHR modernization contract with Oracle by $17B . (2026, August 20). Nextgov/FCW. https://www.nextgov.com/modernization/2026/08/va-boosts-ehr-modernization-contract-oracle-17b/415548/ [^news-orcl-va-20260820] Internal data Internal data is provided on a best efforts basis. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 26, 202631 min

"I Don't See How An Investor Can Not Own SpaceX"

Hunt, Mike, and Jason walk the Cash Flow Memo: oil and gas exhibits, the deficit math nobody wants to do, the Moderna/Merck cancer-vaccine economics, and the SpaceX position Hunt says he’ll probably regret saying out loud. The Cashflow Memo Key Takeaways * Hunt left Exhibit C’s supply/demand untouched: 10-12M bbl/d still clears Hormuz on tankers running with GPS off, near-month crude falls from $87 to roughly $81-82 while the ’27 strip barely moves ($75 to $73-74), so E&P underwriting stays anchored at $70-75 — the price EOG and Magnolia investors are already using. * Gas supply got revised up (’26 dry gas 109.5 Bcf/d, ’27 111.5, with 13 of the 18 Bcf/d added since 2021 coming out of the Permian and Waha back to $2 against a $2.70 Henry Hub), but LNG demand at 20.5 Bcf/d next year narrows the supply-demand gap to about 1 Bcf/d, which is what makes the $3.50 ’27 forecast work. * Exhibit A’s arithmetic leaves one lever: interest expense went from $400B in 2018 to $1T at a 3.5% average rate, defense sits near $1T and Social Security is demographically fixed, so Hunt’s path to a smaller deficit is extending Medicare to everyone and phasing out a $1.2T Medicaid program — and he expects Bessent to have to put a number on deficit reduction in a Monday press conference. * The Moderna cancer-vaccine readout is thinner than the reaction: endpoints met and a statistically significant recurrence reduction, but no hazard ratio and no p-value published, and the economics run to Merck, which shared costs 50/50, takes 50% of vaccine profit plus 100% of Keytruda, roughly 75% of the combined pie against a Keytruda patent cliff in early 2028. * Hunt’s I don’t see how an investor can not own SpaceX: 12M Starlink customers, a permitted 100M sq ft Texas fab aimed at making chips without ASML machines, and Memphis delivering 1.5 GW for $28B — leased out two-thirds to Anthropic and one-third to Google — while data centers stall in every other state; Mike’s counter is that traditional methods give you no margin of safety near $100 (they wanted $80), so size it small and hold your nose ahead of a Tesla/SpaceX merger he expects inside a year. Show Notes [00:29] Oil Markets & Hormuz Ten to twelve million barrels a day still move through Hormuz on tankers with their GPS switched off, which is why crude is drifting down rather than up. Near-month falls from $87 toward $81-82 while the ’27 strip holds near $73-74. [03:43] Natural Gas Production & Demand Dry gas production revised up to 109.5 Bcf/d for ’26 and 111.5 for ’27, with 13 of the last 18 Bcf/d of growth from the Permian. LNG demand at 20.5 Bcf/d next year is what closes the gap and supports $3.50. [05:59] National Debt & Deficit Interest expense went from $400 billion in 2018 to a trillion today at a 3.5% average rate. Hunt walks Exhibit A column by column and lands on Medicare and Medicaid as the only line item with real room. [11:22] Medicare/Medicaid Reform Discussion Jason and Mike stress-test extending Medicare to everyone: fraud and waste as the conservative sell, unwinding ACA underwriting rules, and killing 51 overlapping layers of management. [12:56] Moderna Cancer Vaccine Update The trial met its endpoints, but no hazard ratio and no p-value were published. Merck co-developed it pre-COVID on a 50/50 cost share and takes roughly 75% of the combined profit with Keytruda going off patent in 2028. [16:02] SpaceX Investment Thesis Hunt: I don’t see how an investor can not own SpaceX. Compute scarcity, 12 million Starlink customers, and a 100 million square foot chip facility permitted in Texas. Mike on why the valuation gives you nothing to hold onto. [23:47] NVIDIA / Google Compute Memphis put in 1.5 gigawatts for $28 billion, all NVIDIA equipment, leased two-thirds to Anthropic and one-third to Google. Why is Google leasing NVIDIA capacity when its whole plan was TPUs? [26:20] Meta Litigation & Social Media Rules Forty-nine state attorneys general and Meta appear to be converging on roughly $18 billion, shared with YouTube and TikTok. The agreed rules: two hours a day for children, a midnight-to-6am block, parent-only settings. [29:12] AI Agents & Next Week Agents are the story now, and they’re the middle segment next Wednesday. Get the Cash Flow Memo free at telltales.us — roughly 80 companies with updated financials, plus Exhibit A (federal finances), Exhibit B (natural gas), and Exhibit C (oil). New episode every Wednesday. Cashtags $ASML $GOOGL $META $MGY $MRK $MRNA $MSFT $NVDA $SNAP $SPCX $TSLA $TSM This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 23, 202613 min

Weekend Update - W2634

▶ Explore this week’s Tape — live, sortable, drill-down → Twelve Times Free Cash Flow Bought One Company and Trapped Another Two of our companies signed deals this week, and the Cash Flow Memo prices them almost identically: about twelve times trailing free cash flow, roughly an eight percent free cash flow yield, page fifteen and page six¹²³⁴. One of them got bought at a premium. The other one had to be its own buyer. The multiple decided none of that. Leverage did, and the leaderboard the memo ranks on does not measure leverage at all. Start with what an acquirer is actually buying. Curium agreed to take Lantheus out whole — a hundred and two fifty a share in cash plus contingent value rights worth up to twelve dollars more, call it eight billion dollars, per the merger 8-K, with a close pushed out to the first half of 2027 ⁵ . The agreement landed five days after the FDA approved Tauklarify, the company’s tau imaging agent for Alzheimer’s evaluation ⁶ . What Curium is buying is a business carrying about one turn of debt against its cash flow⁷. Not a multiple. Cash flow with nobody else’s name on it, which turned out to be the scarce thing this week. Charter ran the same arithmetic from the other side of the table. It closed a thirty-four and a half billion dollar acquisition of Cox and Liberty Broadband, took the largest internet and cable footprint in the country, and then took the acquired company’s name ⁸ . Same twelve times trailing free cash flow. Ten turns of debt against it⁹, on fifty-four billion dollars of revenue that is going backwards¹⁰. The market prices that equity under four times next year’s earnings¹¹, which is less a verdict on the business than an estimate of who ends up owning the cash it throws off. Ten turns. Charter has been at this altitude before. It filed Chapter 11 in March 2009 and came out that November having shed about eight billion dollars of debt, roughly forty percent of the stack, and some eight hundred and thirty million dollars a year of interest expense, per the company’s own release ¹² . That trade worked because broadband was still a growth business. Cut the debt, keep the subscribers, let the growth re-lever you back into solvency. The same trade is not available on revenue that shrinks, and the fix on offer this time is a bigger footprint bought with more paper. The California Public Utilities Commission approved the merger on August thirteenth and attached affordable-broadband and network-upgrade conditions to the sign-off ¹³ . A regulator collecting spending promises from a company whose free cash flow is committed a decade out. Everyone signed. The cashflow read is in Marcus’s column below; short version, the composite ranks cash yield and growth and stops there. Scroll down to the debt-to-free-cash-flow table in The Tape and read it as something other than a risk screen. It is a list of the companies in this memo that will be approached rather than approaching. The ones that fund the next move with equity because the cash is already spoken for. The ones that answer to a lender before they answer to an owner. Last week’s essay argued the AI buildout had turned into a credit trade. This week credit walked into a healthcare name and a cable name priced within a tenth of a turn of each other and decided which one was the asset. What changes the read. Lantheus is still trading under the hundred and two fifty in cash¹⁴, which is what an eighteen-month regulatory close does to a spread — the cash alone is barely above where the stock sat into the weekend, and the full package, contingent value rights paid out, is about fifteen percent above it. The test is the antitrust review of two radiopharmacy businesses combining, and the contingent value rights are where the argument over the Tauklarify ramp actually gets settled. On Charter, the date is mid-September, when the full Spectrum portfolio lands in Cox markets ¹⁵ . Watch what the integration gets funded with. Out of operating cash flow and the read holds. New paper against the same cash flow and ten turns becomes eleven, into a refinancing that has to underwrite a declining revenue line. Wall Street’s consensus on Charter: the largest broadband network in the country, at that price, has to be the cheapest thing on the board. It is the cheapest thing on the board because the equity stands last in line. Lantheus is this week’s quote on what it costs to stand first. The Tape — W2634 Universe of 94 cashflow-memo names, snap dates 2026-08-15 → 2026-08-21. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Salesforce is no longer being priced as software. It is being priced as an annuity, and the dashboard is where that shows up. Going into Wednesday’s print, the memo has CRM at a 7.8% FCF yield, roughly four times the 1.9% median for the tech names in this universe, against NTM revenue growth of 9.4%. That pairing does not belong on a software comp sheet. It belongs on a pipeline. Consensus is still arguing about whether the agent products re-accelerate the top line; the multiple stopped waiting for that answer some time ago and re-rated onto the cash. The test on the 8/26 print is current RPO growth, not the EPS line. If RPO tracks the revenue guide, the annuity read holds. If it steps up, the tape has been pricing the wrong company — call that 30%. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 89 of 92 ranked-eligible names ranked. 3 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-08-21.csv . NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo Repriced Without a Print Nothing that repriced the memo this week came out of an earnings report. The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 86 companies in the Cash Flow Memo. About 13 minutes. No filler. Download the memo at telltales.us . Hunt, Jason, and Mike are back Wednesday on episode E2635. Chapter markers * Time | Segment * 0:00 | Cold open — four repricings, zero prints * 0:45 | Theme — the legal bill: Meta and Eli Lilly * 4:45 | Deep dive — two deals, same price: Lantheus and Charter * 8:45 | Rapid fire — Harrow, Celsius, Walmart, Tesla, forward calendar * 11:45 | Close — Consensus Watch and the Wednesday tease * 12:45 | Disclaimer Full transcript Cold open Ava: Nothing that repriced this memo this week came out of an earnings report. A California jury put a number on Meta[^news-meta-verdict-20260820]. Eli Lilly agreed to plead guilty and write a check to make a marketing case go away[^news-lly-zyprexa-20260821]. A rival radiopharmacy company agreed to buy one of our healthcare names outright[^news-lnth-curium-20260819], five days after the FDA approved its newest product[^news-lnth-fda-20260814]. And a $34.5 billion cable merger closed, creating the largest internet and cable company in the country[^news-chtr-close-20260820]. Four repricings. Zero earnings prints. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — The legal bill Ava: Meta spent this week finding out what its product design is worth in a courtroom, and the number in the headline is not the number that matters. A California jury found the company liable on 75,000 separate violations of state consumer protection law, and a judge separately found that Meta’s platforms constitute a public nuisance. $375 million in civil penalties[^news-meta-verdict-20260820]. That is the part that is now settled. The open part is bigger. 29 state attorneys general are still in federal trial in California, alleging Meta deliberately designed Facebook and Instagram to be addictive, and they are asking for up to $200 billion in damages plus limits on the algorithmic feed[^news-meta-trial-20260818]. And a former Meta engineering director testified that Mark Zuckerberg ran a culture that treated child safety as secondary to growth[^news-meta-testimony-20260820]. Not a plaintiff’s lawyer. Their own engineering director. Marcus, what does a jury verdict actually cost? Marcus: The penalty isn’t the problem, the finding is. A public-nuisance ruling is a template every other state attorney general can now run without having to win the argument themselves, and it lands on a cash flow that has already been cut in half this year. The memo has Meta at 32x trailing free cash flow[^memo-meta-evfcf-20260821] on $43 billion trailing twelve, and that number is down about 73% from the prior TTM[^memo-meta-fcf-20260821]. Not because the business slowed. Because the buildout ate it. What I’d watch is which attorney general files next, and whether it lands before or after the capex guide. Ava: So the jury did the cheap part first. And the guide didn’t help either. Meta told the Street to expect $61 billion to $64 billion in the third quarter, midpoint $62.5 billion, below where the Street was sitting[^news-meta-q3outlook-20260820]. Meanwhile the company is cutting staff across WhatsApp, Instagram, and Reality Labs in another team restructure, the second round of cuts this year[^news-meta-layoffs-20260820]. Under trial for how the product was built, and reorganizing the teams that built it. Ava: Eli Lilly ran the same week in reverse. Lilly agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act and pay roughly $800 million over how it promoted Zyprexa[^news-lly-zyprexa-20260821]. That’s the headline. Underneath it, in the same seven days, Lilly announced agreements to buy three vaccine and infectious-disease companies for $3.83 billion[^news-lly-vaccines-20260821], put $50 million up front into a CureVac mRNA cancer partnership worth up to $1.8 billion[^news-lly-curevac-20260821], and raised full-year revenue guidance to $85 billion to $87 billion[^news-lly-guidance-20260821]. One of those four things led the coverage. Marcus, which of them matters? Marcus: Lilly bought its way out of the past and into a category it doesn’t have, in the same week, and only one of those is going to be visible a few years out. The $800 million[^news-lly-zyprexa-20260821] sits against $21 billion of trailing free cash flow in the memo[^memo-lly-fcf-20260821]. That’s about two weeks of production. The vaccine and infectious-disease deals are the ones I’d actually underwrite, because that’s Lilly buying a second act while GLP-1 is still paying for everything. Ava: Two courtrooms, two directions. Marcus, price them. Marcus: The two courtrooms are pricing different things. Lilly’s legal exposure is closed and quantified, and the memo still carries it at 58x trailing free cash flow[^memo-lly-evfcf-20260821]. Meta’s is open and unquantified, and the memo carries it at 32x[^memo-meta-evfcf-20260821]. The cheaper name is the one still in trial. I’d read that as the market having decided Meta’s growth is more uncertain than Meta’s lawsuit, and I’m not convinced it has that ordering right. Ava: The cheaper one is the one still in trial. Hold onto that, because the next two names on the show are priced almost identically, and one of them just got bought. Deep dive — Two deals, same price Ava: Two of our companies did a deal this week, and the memo prices them almost exactly the same way. Same multiple, same yield, opposite ends of the one thing that decides whether a deal like this works. Lantheus is on page 15[^memo-lnth-evfcf-20260821]. Charter is on page 6[^memo-chtr-evfcf-20260821]. Both trade around 12x trailing free cash flow. Both throw off roughly an 8% free cash flow yield[^memo-lnth-fcfyield-20260821][^memo-chtr-fcfyield-20260821]. One of them got bought. The other one did the buying. Ava: Lantheus first. Curium agreed to acquire the entire company: $102.50 a share in cash, plus contingent value rights worth up to $12 more, for a total potential value around $8 billion, expected to close in the first half of 2027[^news-lnth-deal-terms-20260819]. That agreement landed five days after the FDA approved Tauklarify, Lantheus’s tau PET imaging agent for identifying tau pathology in adults being evaluated for Alzheimer’s[^news-lnth-fda-20260814]. Bought and re-rated inside one week. And Lantheus pulled its own full-year guidance when the agreement was signed[^news-lnth-deal-terms-20260819], which is what a company does when the forecast stops being its decision. Ava: Charter did the opposite trade. Charter closed its $34.5 billion acquisition of Cox Communications and Liberty Broadband, creating the largest internet and cable television company in the country[^news-chtr-close-20260820]. California’s Public Utilities Commission signed off on August 13, with affordable-broadband and network-upgrade conditions attached[^news-chtr-cpuc-20260813]. Six million Cox customers come onto Spectrum, with the full Spectrum product portfolio launching in Cox markets by mid-September[^news-chtr-spectrum-20260820]. And the acquirer is taking the acquired company’s name[^news-chtr-close-20260820]. Charter bought Cox and is calling itself Cox. And it did all of that against $54 billion of trailing revenue that is going backwards, down about 2%[^memo-chtr-rev-20260821]. Marcus, which one surprises you? Marcus: Charter, and not because of the price. Because of what’s sitting under it. The memo has Charter at 12x trailing free cash flow and 10x levered on debt to free cash flow[^memo-chtr-evfcf-20260821][^memo-chtr-debtfcf-20260821]. That’s a company whose cash flow is spoken for years out, buying its way to the largest footprint in the country in a business where revenue is going backwards. The market’s answer to that is a forward price-to-earnings under 4[^memo-chtr-fwdpe-20260821]. I’d read that as the market pricing real risk that the earnings don’t survive the debt, not as a bargain waiting to be found. What I’d watch is what integration actually costs through mid-September, when the Spectrum portfolio lands in Cox markets. Ava: Under 4x forward earnings. For the largest broadband company in America. Marcus: And Lantheus is the same multiple with none of that. 12x trailing free cash flow[^memo-lnth-evfcf-20260821], with essentially no debt against it[^memo-lnth-debtfcf-20260821]. Curium is paying about 15x that trailing cash flow to take the whole thing out. And the tell is that Lantheus is still trading under the $102.50 cash consideration[^memo-lnth-price-20260821]. Which is what a long regulatory close does to an arbitrage spread. Ava: A 2027 close will do that. Marcus, so what does the comparison say? Marcus: The memo prices these two identically and the balance sheets are not remotely the same. 12x trailing free cash flow at one turn of leverage got itself a buyer at a premium. The same multiple at ten turns is a company that has to be its own buyer, because nobody else can carry that debt. I’d weight it this way: the multiple tells you what the market will pay for the cash flow. The leverage tells you who gets to decide what happens to it. Ava: Two deals, one multiple. The balance sheet was the entire story, and it never showed up in a print. Rapid fire Ava: Rapid fire. Harrow is the one name on this list we actually own, and it just put up the quarter the thesis needed. Second-quarter revenue $70.7 million, up 60% sequentially and 11% year over year, with VEVYE contributing $29.4 million of it[^news-hrow-q2-20260814]. Management reiterated full-year guidance of $350 million to $365 million in revenue and $80 million to $100 million of adjusted EBITDA[^news-hrow-guidance-20260814]. And this week Harrow released prospective randomized data showing IHEEZO delivered about 58% less patient-reported discomfort following intravitreal injections[^news-hrow-iheezo-20260820]. The part that isn’t in the press release is in the memo: Harrow is levered 10.5x free cash flow[^memo-hrow-debtfcf-20260821]. 60% sequential growth on a balance sheet that tight is a good problem, right up until it’s the only problem. Ava: Celsius. The core brand is shrinking and the President and Chief Operating Officer just walked out. Second-quarter revenue $817.9 million, up 11% year over year, and every dollar of that growth is Alani Nu, which did $364 million and grew 21%. The CELSIUS brand itself, the thing the company is named after, declined about 12%[^news-celh-q2-20260806]. Eric Hanson, the President and COO and a former PepsiCo executive, departed in a leadership realignment that also installed a new Chief Commercial Officer and a new Chief Business Transformation Officer[^news-celh-leadership-20260819][^news-celh-hanson-20260810]. Three C-suite seats and a three-brand playbook, for a company that was a one-brand growth story 18 months ago. Ava: Walmart. The largest retailer in the country posted its slowest US comparable sales growth in six years and raised full-year guidance anyway[^news-wmt-slowdown-20260821]. Net sales growth guidance goes to 4–5%, up from 3.5–4.5%[^news-wmt-guidance-20260820]. What’s doing the work is a $2.9 billion tariff refund, which Walmart says it’s putting straight into price cuts for customers[^news-wmt-tariff-20260821]. A customs windfall spent on buying traffic. That works right until the refund stops arriving. Ava: Tesla, and this one belongs to this episode. Nevada regulators approved permits letting Tesla, Uber, and Waymo all run commercial robotaxi services in Clark County[^news-tsla-nevada-20260820]. Not a Tesla approval. A Nevada approval, handed to three companies in the same decision, in the county that contains Las Vegas. Whatever exclusivity anyone was underwriting in that market, a regulator just deleted it in an afternoon. And Tesla is the only one of the three still buying the fleet out of its own cash flow. The company expects 2026 capital expenditure above $25 billion, rising further over the next two to three years[^news-tsla-capex-20260821]. The memo has Tesla at 230x trailing free cash flow[^memo-tsla-evfcf-20260821]. That multiple is not underwriting a robotaxi business with two approved competitors in it. Ava: Forward calendar, and it’s a page 2 and page 3 week. Salesforce and Nvidia both report Wednesday, August 26. Consensus has Salesforce at $3.27 on $11.3 billion[^earn-crm], and Nvidia at $2.09 on $92.0 billion[^earn-nvda]. Then the Wednesday after, September 2: Broadcom[^earn-avgo], Snowflake[^earn-snow], and Five Below[^earn-five]. And two more semis moved this week without a print. AMD posted second-quarter revenue of $11.54 billion, up 50%, with adjusted EPS of $1.66[^news-amd-q2-20260821], and guided the third quarter to $13.0 billion[^news-amd-q3guide-20260821]. Micron committed $10 billion to a memory research lab in Boise[^news-mu-labs-20260820], the same week its chief executive said data-center customers are asking for about 50% more supply than Micron can currently commit to[^news-mu-demand-20260820]. Close Ava: That’s the show. Wall Street’s consensus on Meta this week: the stock has sunk 32%, and the analysts see a 38% rebound[^news-meta-q3outlook-20260820]. Same firms, same week, same price. The jury is the only party that changed its mind. Ava: Nothing that repriced this memo came out of an earnings report. A jury, a guilty plea, an FDA approval, and a closed merger did more to four of these companies than any quarter did. And page 15 has now carried two shows in a row. Ava: Because on Wednesday’s episode 2634, Hunt, Jason, and Mike spent more than half the show on that same page: Moderna’s phase 3 melanoma readout with Merck, and the capital-allocation scoreboard against BioNTech[^ep-e2634]. Hunt, Jason, and Mike are back Wednesday on episode 2635. Ava: Download the Cash Flow Memo at telltales.us , and tell us what you want covered through the Substack. Ava: The show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Disclaimer Ava: This podcast is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * AMD stock holds high valuation as AI earnings beat meets cautious margin outlook . (2026, August 21). Ad-Hoc News. https://www.ad-hoc-news.de/boerse/news/corporate-news/amd-stock-holds-high-valuation-as-ai-earnings-beat-meets-cautious-margin/69979000 [^news-amd-q2-20260821] * AMD stock trades off recent highs as AI gains offset valuation worries . (2026, August 21). Ad-Hoc News. https://www.ad-hoc-news.de/boerse/news/corporate-news/amd-stock-trades-off-recent-highs-as-ai-gains-offset-valuation-worries/69982466 [^news-amd-q3guide-20260821] * California Public Utilities Commission. (2026, August 13). CPUC approves Charter-Cox merger with strong consumer protections . https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-approves-charter-cox-merger-with-strong-consumer-protections [^news-chtr-cpuc-20260813] * Celsius Holdings, Inc. (2026, August 6). Celsius Holdings reports second quarter 2026 financial results [Press release]. https://ir.celsiusholdingsinc.com/news/news-details/2026/Celsius-Holdings-Reports-Second-Quarter-2026-Financial-Results/default.aspx [^news-celh-q2-20260806] * Celsius Holdings, Inc. (2026, August 10). Form 8-K, current report [SEC filing]. Retrieved via ADVFN. https://www.advfn.com/stock-market/NASDAQ/CELH/stock-news/99088768/form-8-k-current-report [^news-celh-hanson-20260810] * Celsius shakes up leadership as new CCO lays out three-brand playbook . (2026, August 19). Beverage Digest. https://www.beverage-digest.com/articles/1460-celsius-shakes-up-leadership-as-new-cco-lays-out-three-brand-playbook [^news-celh-leadership-20260819] * Charter closes $34.5 billion Cox deal in cable megamerger, company to adopt Cox Communications name . (2026, August 21). Variety. https://variety.com/2026/tv/news/charter-closes-cox-merger-new-company-name-1236838902/ [^news-chtr-close-20260820] * Charter Communications stock holds steady as $34.5 billion Cox deal creates Spectrum giant . (2026, August 21). Ad-Hoc News. https://www.ad-hoc-news.de/boerse/news/corporate-news/charter-communications-stock-holds-steady-as-34-5-billion-cox-deal/69982753 [^news-chtr-spectrum-20260820] * Eli Lilly enters three separate acquisitions totaling $3.83 billion . (2026, August 21). PharmExec. https://www.pharmexec.com/view/eli-lilly-three-acquisitions-totaling-3-billion [^news-lly-vaccines-20260821] * Eli Lilly to pay more than $800 million for off-label promotion of Zyprexa . (2026, August 21). Drug Topics. https://www.drugtopics.com/view/eli-lilly-pay-more-800-million-label-promotion-zyprexa [^news-lly-zyprexa-20260821] * Harrow announces IHEEZO data in patient-reported discomfort following intravitreal injections [Press release]. (2026, August 20). GlobeNewswire. https://www.globenewswire.com/news-release/2026/08/20/3348208/0/en/harrow-announces-iheezo-data-in-patient-reported-discomfort-following-intravitreal-injections.html [^news-hrow-iheezo-20260820] * Harrow, Inc. (2026, August 14). Form 8-K, report of material event [SEC filing]. Retrieved via StockTitan. https://www.stocktitan.net/sec-filings/HROW/8-k-harrow-inc-reports-material-event-4f9c4727aa82.html [^news-hrow-q2-20260814] [^news-hrow-guidance-20260814] * Lantheus Holdings, Inc. (2026, August 19). Form 8-K, report of material event [SEC filing]. Retrieved via StockTitan. https://www.stocktitan.net/sec-filings/LNTH/8-k-lantheus-holdings-inc-reports-material-event-a06c5bcd537b.html [^news-lnth-deal-terms-20260819] * Lilly and CureVac partner on mRNA cancer vaccines in $1.8-billion deal . (2026, August 21). BioPharm International. https://www.biopharminternational.com/view/lilly-and-curevac-partner-mrna-cancer-vaccines-273-billion-deal-0 [^news-lly-curevac-20260821] * Lilly’s multiple assumes less growth than you think . (2026, August 21). Trefis. https://www.trefis.com/stock/lly/articles/612404/lillys-multiple-assumes-less-growth-than-you-think/2026-08-21 [^news-lly-guidance-20260821] * Meta child safety and addiction lawsuit reaches trial as 29 states allege addictive design . (2026, August 18). The Guardian. https://www.theguardian.com/technology/2026/aug/18/meta-child-safety-addiction-lawsuit-states [^news-meta-trial-20260818] * Meta faces $1.4 trillion penalty in landmark child-safety trial . (2026, August 20). Fortune. https://fortune.com/article/meta-faces-1-4-trillion-threat-stakes-of-case-reach-across-tech-08-20-2026/ [^news-meta-verdict-20260820] * Meta stock sinks 32%, but analysts see a 38% rebound . (2026, August 20). Yahoo Finance. https://finance.yahoo.com/markets/stocks/articles/meta-stock-sinks-32-analysts-150427583.html [^news-meta-q3outlook-20260820] * Micron CEO: AI has totally changed the equation for the boom-and-bust memory industry . (2026, August 20). CNBC. https://www.cnbc.com/2026/08/20/micron-ceo-ai-changed-memory-industry.html [^news-mu-demand-20260820] * Micron Technology, Inc. (2026, August 20). Micron unveils Micron Research Labs, a U.S.-based long-horizon innovation hub to shape the future of memory and AI [Press release]. https://investors.micron.com/news/press-release/2026/Micron-Unveils-Micron-Research-Labs-a-U-S–Based-Long-Horizon-Innovation-Hub-to-Shape-the-Future-of-Memory-and-AI/default.aspx [^news-mu-labs-20260820] * Tech companies that have made layoffs from 2022 to 2026 . (2026, August 20). Tech.co. https://tech.co/news/tech-companies-layoffs [^news-meta-layoffs-20260820] * Tesla (TSLA) up 8% since last earnings report: Can it continue? (2026, August 21). Yahoo Finance. https://sg.finance.yahoo.com/news/tesla-tsla-8-since-last-153013632.html [^news-tsla-capex-20260821] * Tesla, Uber, and Waymo all get the OK to operate thousands of robotaxis in Nevada . (2026, August 20). TechCrunch. https://techcrunch.com/2026/08/20/tesla-uber-and-waymo-all-get-the-ok-to-operate-thousands-of-robotaxis-in-nevada/ [^news-tsla-nevada-20260820] * The merger of radiopharmaceutical pioneering companies: Curium and Lantheus . (2026, August 19). LabRoots. https://www.labroots.com/trending/biotech-and-pharma/30916/merger-radiopharmaceutical-pioneering-companies-curium-lantheus-2 [^news-lnth-curium-20260819] * US FDA approves Lantheus’ brain-imaging agent for Alzheimer’s assessment . (2026, August 14). Reuters. https://www.reuters.com/business/healthcare-pharmaceuticals/us-fda-approves-lantheus-brain-imaging-agent-alzheimers-assessment-2026-08-14/ [^news-lnth-fda-20260814] * Walmart cautionary with 2026 expectations after sales growth slows . (2026, August 20). AP News. https://apnews.com/article/walmart-quarter-earnings-inflation-tariffs-955945e03ffcc111389d62fa3103a051 [^news-wmt-guidance-20260820] * Walmart posts slowest sales growth in years as Americans tighten wallets . (2026, August 20). The New York Times. https://www.nytimes.com/2026/08/20/business/walmart-target-retail-consumer-economy.html [^news-wmt-slowdown-20260821] * Walmart promises price cuts after $2.9 billion tariff refund . (2026, August 21). ABC7 New York. https://abc7ny.com/story/walmart-promises-price-cuts-after-2-9-billion-tariff-refund/19713516/ [^news-wmt-tariff-20260821] * Zuckerberg encouraged growth over child safety, ex-Meta executive testifies at trial . (2026, August 20). Claims Journal. https://www.claimsjournal.com/news/national/2026/08/20/339673.htm [^news-meta-testimony-20260820] Internal data Internal data is provided on a best efforts basis. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 19, 202633 min

This Time, the Hare Beat the Tortoise

Hunt, Mike, and Jason go more than half healthcare this week: Moderna’s Merck-partnered mRNA cancer vaccine cleared phase 3 in melanoma and the stock doubled. Plus Hormuz at a standstill, $7 trillion of federal spending with only one line left to cut, and xAI putting agents on the shelf. The Cashflow Memo Key Takeaways * Hormuz traffic has gone from 15-20 ships a day to effectively zero and Hunt sees an indefinite stalemate, so with WTI at 82 last Thursday against a 2027 strip at 73, the backwardated 2027 price is the number to underwrite because it is the number operators use for their own capital decisions. * Gas printed under $3 front-month while the 2027 strip holds near $3.40, and with the Permian supplying two-thirds of US supply growth, new Gulf Coast pipelines narrowing Waha to roughly 50 cents under Henry Hub, and LNG feedgas above 18 Bcf/d this year, the 108.5 and 110.5 Bcf/d supply estimates for ’26 and ’27 both look too low. * On Exhibit A’s $7 trillion of FY26 federal spending, healthcare is the only line with real money in it (Medicaid alone is $600 billion, half federally funded), because defense is heading to $1.1-1.2 trillion and interest is locked at a 3.5% average rate with the 10-year at 4.6% - and Jason put Medicare improper payments near 6% with fraud between 3% and north of 10%. * Moderna doubled on a Merck-partnered phase 3 melanoma readout (Keytruda alone versus Keytruda plus a personalized 34-antigen mRNA vaccine) that met all endpoints on a press release with no data attached, validating a decade of platform work rather than a single drug. * The capital-allocation scoreboard flipped: BioNTech was the safer steward and still holds roughly $15 billion of COVID cash to Moderna’s $3 billion as of the March balance sheet, but the hare reached the cancer readout first, and Montana’s read is that the trial proves the technology rather than the drug, which is what makes Moderna’s nine other cancer studies matter. * xAI shipped off-the-shelf Grok agents that cut agent build time from months to about a day, 64% of OpenAI’s tokens are now consumed agentically rather than through human prompts, and that demand curve widens the compute gap further just as Nvidia backstops the physical shell of an OpenAI data center in Ohio and the governors of Pennsylvania, New York, and Texas impose one-year delays or audits on new projects. Show Notes [00:00:30] Exhibit C: Iran, Hormuz, and the Stalemate Traffic through the strait has fallen from 15-20 ships a day to near zero on projectile risk. Hunt sees no path to resolution and argues the 2027 strip at 73, not spot at 82, is the price that should drive investment decisions. [00:04:03] Exhibit B: Natural Gas and the Permian Problem Front-month gas under $3 against a 2027 strip near $3.40. New pipelines have pulled Waha to roughly 50 cents under Henry Hub, and rising associated gas means the published supply estimates are almost certainly too low. [00:05:51] Exhibit A: $7 Trillion and One Place to Cut Long rates are rising worldwide on deficits, not just in the US. Hunt walks the spending columns and finds healthcare is the only category with real savings available, with Medicaid at $600 billion the specific target. [00:10:58] Moderna vs. BioNTech: Page 15 The two mRNA COVID winners diverged on capital allocation - BioNTech kept roughly $15 billion, Moderna ran cash down to $3 billion. Then Moderna announced results and doubled. [00:12:44] The Phase 3 Melanoma Readout Jason lays out the Merck joint development study: stage 3 and 4 melanoma patients, surgical resection, then Keytruda alone versus Keytruda plus an mRNA cancer vaccine. All endpoints met, though no data was released with the press release. [00:13:51] How the Cancer Vaccine Actually Works Montana explains antigen identification via genetic sequencing, the 34 most prominent antigens per tumor, lipid encapsulation, and priming the immune system to catch recurrence before it becomes a tumor. [00:17:48] Nine More Cancers: Does the Platform Travel? Mike asks how investors should handicap the same approach across Moderna’s nine other studies. Montana’s answer: this proves the technology, not a drug - the question is whether the antigen flags stay identifiable. [00:20:07] MRD Testing and the Sequencing Layer Minimal residual disease testing as a monitoring tool, reading cell-free tumor DNA from a blood draw to guide treatment protocols before an end-of-treatment scan. [00:22:06] xAI Ships Agents Off the Shelf Grok agents cut build time from the months Mike and Jason spent to about a day. Jason’s read: AI is just software, and the endpoint is a personal assistant that ships on every phone. [00:25:25] The Token Gap Widens Agentic consumption is now 64% of OpenAI’s tokens versus human prompts. If an agent ships native on every handset, demand steps up again against compute that already cannot serve it. [00:27:43] Nvidia Backstops a Data Center Shell Nvidia is guaranteeing the building, not just the GPUs, on an Ohio site with OpenAI as end customer. Ben Thompson frames it as discounting by taking risk instead of cutting price. [00:28:48] Governors Hit Pause One-year delays in Pennsylvania and New York, an audit requirement in Texas, and a public-sentiment problem that Jensen Huang himself is flagging as a constraint on where the chips can go. Get the Cash Flow Memo at telltales.us and subscribe for a new episode every Wednesday. Cashtags $BNTX $MRK $MRNA $NVDA $PFE This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 16, 202613 min

Weekend Update - W2633

▶ Explore this week’s Tape — live, sortable, drill-down → The AI Buildout Just Became a Credit Trade Broadcom put up the best AI guidance in the semiconductor industry and lost five percent for it. Nobody who read the release thinks that was a demand problem. The buildout has passed the point where equity markets fund it, and what prices the chip names from here is whether somebody else’s lender says yes. Start with the number that did the damage. Bank of America’s Tom Curcuruto put the financing requirement sitting behind the chip buildout at three-hundred-seventy billion dollars, and downgraded on XPU credit risk ¹ ² . Not on units. Not on the guide. Fifty-six billion of 2026 AI revenue, up a hundred and eighty percent ³ , was never in dispute. The bank asked who writes the checks and did not like the answer. Three-hundred-seventy billion dollars. That is the analytical move worth taking seriously, because it re-prices the whole complex. An order book is a claim on somebody else’s balance sheet. When the buyer is Alphabet, the claim is money good and the conversation stays boring. Alphabet’s own filings show AI purchase commitments going from three-hundred-thirty-two billion at the end of the first quarter to eight-hundred-eleven billion by the end of the second ⁴ , with capex guided to one-ninety-five to two-oh-five billion and free cash flow explicitly taken negative to fund it ⁵ . Alphabet can carry that. The question was never Alphabet. The question is the tier underneath: the neoclouds, the sovereign projects, the model labs whose GPU orders are contracted against capital they have not raised yet. The last time the equipment cycle outran its customers’ ability to pay, the vendors solved it themselves. Lucent and Nortel financed the competitive carriers buying their gear, booked the revenue, and carried the receivable. When the carriers could not refinance in 2001, the write-downs landed on the vendors’ own income statements. Ugly, and useful, because you could see it coming in the filings. The receivable line moved first. This cycle solved the same problem in a way that removes exactly that tell. The credit is not on the vendor’s books. It is syndicated out to private capital, which is what Nvidia’s five-hundred-billion-dollar third-party financing platform with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR is actually for⁶. Hunt, Jason and Mike took that apart on Wednesday’s show from the supply side. Read it from the credit side and it is the more interesting object: the vendor arranging the loan without holding the loan. Revenue converts to cash on delivery, and the duration risk sits with somebody whose marks nobody publishes quarterly. There is no receivable line to watch, because there is no receivable. Which is why Intel is the honest data point of the week. A company that needed twenty billion dollars to fund AI capacity went and sold common stock at ninety-five a share to get it ⁷ , upsized from fifteen. That is what it looks like when the credit window is not the cheapest window available to you. The cashflow read is in Marcus’s column below, short version, the memo has the whole complex priced as though the funding is settled. Page one of the Cash Flow Memo has Alphabet at roughly fifty-six billion of trailing free cash flow against a hundred and thirty-two billion of trailing capex⁸⁹. The buildout is already being paid for out of somebody’s balance sheet. The only live question is whose, and at what spread. What changes the read. The disclosure that matters on Broadcom’s next print is customer concentration, not the AI revenue guide. If the ten-K names the XPU customers and they are all investment grade, the BofA cut ages badly. If the concentration line stays vague, the three-hundred-seventy billion is not a modeling assumption, it is a gap. Nvidia reports Wednesday the twenty-sixth¹⁰, and the tell there is the same one: financed demand versus funded demand, and whether management will separate them out loud. Watch private credit spreads on data-center paper alongside the print. Those two things now move the semis together, and the thesis breaks the first quarter they diverge. Wall Street’s consensus on the AI financing question: the demand is real, so the money will be there. The demand was real in 1999 too. It was the money that stopped. The Tape — W2633 Universe of 94 cashflow-memo names, snap dates 2026-08-07 → 2026-08-14. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Micron is the one line on this table where two multiples describe two different companies. Forward P/E of 6.5 says the market has already called the top of the memory cycle. EV/FCF of 40.7 says the cash from this cycle has not arrived yet. Both can be true for another quarter or two, and NTM revenue growth of 92.8% is the only thing reconciling them. Consensus reads the 6.5 as cheap. It is not cheap, it is a peak-earnings multiple behaving the way peak-earnings multiples behave, and the composite here is carried by the growth leg, not the cash leg. The test on the next print is whether free cash flow converges toward earnings or the gap holds open on capex. I read it as roughly 60/40 that it closes. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 90 of 92 ranked-eligible names ranked. 2 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-08-14.csv . NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo Who’s Paying For It The AI buildout outgrew its own cash flow, and this week the invoices got itemized. The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 86 companies in the Cash Flow Memo. About 14 minutes. No filler. Download the memo at telltales.us . Hunt, Jason, and Mike are back Wednesday on episode E2634. Chapter markers * Time | Segment * 0:00 | Cold open — the buildout outran the cash flow * 0:45 | Theme — who’s paying for it: Alphabet, Broadcom, Intel * 4:45 | Deep dive — Apple: Cook hands over the margin * 8:45 | Rapid fire — PayPal, Eli Lilly, Snowflake, Microsoft * 11:45 | Close — Consensus Watch and the forward week * 12:40 | Closing disclaimer Full transcript Cold open Ava: The AI buildout has officially outrun free cash flow. This week three companies showed you how they intend to cover the gap. Alphabet is covering it with commitments. Broadcom is covering it with somebody else’s credit. Intel covered it by printing $20 billion of new stock in a single week. And the largest company in the memo, which is not building any of it, is paying for it anyway, out of gross margin, in the same week it changed CEOs. Somebody always pays. This week the invoices got itemized. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — who’s paying for it Ava: Alphabet on page 1, Broadcom on page 2, Intel on page 3. Three pages of the Cash Flow Memo, one problem. Start with Alphabet, because Alphabet stopped being a cash-generative company this quarter and told you so in writing. AI purchase commitments went from $332.4 billion at the end of the first quarter to $811 billion by the end of the second[^news-googl-commitments-20260814]. In one quarter. Capital expenditure guidance for the full year moved to $195-205 billion, and Alphabet said plainly that this takes free cash flow negative[^news-googl-capex-20260814]. And in the same week the world found out that Berkshire Hathaway spent the quarter buying it, lifting its stake 83% to nearly 106 million shares, about $37.8 billion, now a top-three Berkshire holding[^news-googl-berkshire-20260814][^news-googl-berkshire-stake-20260814]. Marcus, what does Buffett see that the free cash flow line doesn’t? Marcus: Alphabet stopped being a cash machine on purpose, and that’s a defensible thing to do once. The memo has capex running about $132 billion trailing twelve months[^memo-googl-capex-20260814] against roughly $56 billion of trailing free cash flow[^memo-googl-fcf-20260814]. Then they guided capex to $195-205 billion for the year[^news-googl-capex-20260814]. When you spend at that rate free cash flow goes negative, and that’s the cost of the build, not a flag. Which means the multiple isn’t the right frame on this name right now. What actually prices Alphabet is whether that commitment book converts into revenue that clears the depreciation it just bought. I’d hold that read until the December quarter shows an operating margin with the new asset base in it. Ava: There is one more line in Alphabet’s filings worth sitting with. More than 70% of net income last quarter came from investments in other companies, largely Elon Musk’s SpaceX[^news-googl-spacex-income-20260814]. Alphabet disclosed a 7.2% stake in SpaceX Class A stock — 551.2 million shares across Alphabet, XXVI Holdings and Google[^news-googl-spacex-stake-20260814]. The search company’s earnings quality this quarter is a rocket company. Now Broadcom, which had the opposite kind of week: the numbers were excellent and the stock fell anyway. AI revenue guidance for 2026 of $56 billion, up 180%. Quarterly revenue of $22.2 billion, up 48%. EPS of $2.44 against $2.40 consensus[^news-avgo-ai-guidance-20260814]. AI semiconductor revenue alone hit $10.8 billion in the quarter, up 143%[^news-avgo-ai-guidance-20260814]. The stock finished down nearly 5%[^news-avgo-drop-20260814]. Marcus: Broadcom’s problem isn’t demand. It’s who funds the customer. Bank of America didn’t cut the revenue line, it cut the credit — analyst Tom Curcuruto put the financing requirement behind that chip buildout at $370 billion[^news-avgo-financing-20260814], and downgraded on XPU credit risk[^news-avgo-bofa-cut-20260814]. The memo has Broadcom at about 54x trailing free cash flow[^memo-avgo-evfcf-20260814] on $36 billion of trailing FCF[^memo-avgo-fcf-20260814]. That is a price that assumes every one of those customers can pay for what they ordered. The disclosure I’d watch next print is customer concentration, not the revenue guide. Ava: The order book is only as good as the balance sheet on the other end of it. Which brings us to Intel, which did not wait for anybody else’s balance sheet. Intel announced a $15 billion common stock offering and then upsized it to $20 billion, at $95 a share, to fund AI capacity[^news-intc-offering-20260811]. Marcus — what does that raise tell you about Intel’s own cash flow? Marcus: That management doesn’t think it has any. $20 billion of equity[^news-intc-offering-20260811] against about $4 billion of trailing free cash flow[^memo-intc-fcf-20260814] and $12 billion of trailing capex[^memo-intc-capex-20260814]. Everything this company generates in a year, raised in a week and sold to strangers, and it still doesn’t cover the spend. At that free cash flow level the multiple is noise, so don’t use it. What decides this is whether the foundry customers behind the raise are contracted or hoped for, and Intel hasn’t told you which. Deep dive — Apple Ava: Apple is the other name on page 1, and Apple is the one company in this conversation that could write the check for all of it and has decided not to. Tim Cook steps down as chief executive on September 1. John Ternus takes the job. Cook becomes Executive Chairman[^news-aapl-ceo-transition-20260814]. Twenty-five years, and the handoff lands in the middle of a quarter that split cleanly down the middle: revenue of $109.4 billion, up 16%, EPS up 29% — and the stock down 5%[^news-aapl-q3-earnings-20260814]. Marcus: Apple is funding the AI era by declining to participate in it, and the cash flow statement has never looked better for it. The memo has Apple at about 32x trailing free cash flow[^memo-aapl-evfcf-20260814], a 3.1% free cash flow yield[^memo-aapl-fcfyield-20260814], on $137 billion of trailing free cash flow[^memo-aapl-fcf-20260814]. That is a business getting better at turning revenue into cash while the story around it gets worse. The quarter is fine. The guide is where the argument is. Ava: And the guide is where it went wrong. Apple told the Street to expect 9% to 11% revenue growth in the September quarter, against consensus above 12%[^news-aapl-q4-guidance-20260814]. Gross margin is guided to slip to 47%-48%, from roughly 50% in June[^news-aapl-margin-guidance-20260814]. Jefferies had already cut the stock to a sell-equivalent rating four days earlier, taking its target to $263.66 from $285.56, on supply-chain checks indicating the all-glass iPhone has been cancelled[^news-aapl-jefferies-target-20260810][^news-aapl-jefferies-downgrade-20260810]. Marcus: Here is the comparison the headlines missed. Apple spent about $10 billion on capital expenditure over the last twelve months[^memo-aapl-capex-20260814] and $82 billion buying back its own stock[^memo-aapl-buyback-20260814]. Alphabet, same page of the memo, same end market, spent $132 billion on capex over the same window[^memo-googl-capex-20260814]. One of them is buying capacity. The other is buying scarcity in its own shares. Both are coherent strategies and we find out which one was right somewhere around the end of the decade. Ava: Two philosophies, one page. Marcus, on the margin guide specifically — cost or mix? Marcus: I’d weight it as cost. 47%-48% against roughly 50% in June[^news-aapl-margin-guidance-20260814] is a guided step down, not a modeled one. Call it 70/30 that this is component cost and it persists into next year, rather than a one-product build expense that washes out. The December print is the test. Ava: So the new chief executive’s first job is finding the margin his predecessor just gave away. Marcus: And that’s the real succession risk, which is timing rather than strategy. Ternus is a hardware engineer inheriting a company whose next four quarters get decided by component prices and a single launch, with the market already paying about 33x forward earnings for the handoff[^memo-aapl-fwdpe-20260814]. Apple’s trailing revenue is $467 billion[^memo-aapl-revenue-20260814], so the margin step they just guided is somewhere around $9 billion a year of gross profit that has to come from somewhere else. I’d wait for the December print for real evidence, not the keynote. Ava: Which is September 9, when Apple is expected to show the iPhone 18 Pro, the Pro Max, and an all-new foldable[^news-aapl-september-event-20260814]. Eight days after Ternus takes the chair. Cook spent his final weeks as CEO opening a manufacturing plant in Houston alongside Commerce Secretary Howard Lutnick[^news-aapl-houston-plant-20260814]. A supply-chain executive closing out a supply-chain career, handing the company to another supply-chain executive, at the exact moment the binding constraint stopped being supply and started being what supply costs. Rapid fire Ava: Rapid fire. Somebody finally put a price on PayPal. Stripe and the private-equity firm Advent International are in talks to buy it at $60.50 a share[^news-pypl-acquisition-talks-20260814]. The stock closed 1.9% above the bid[^news-pypl-bid-premium-20260814], which is the market’s way of saying the first number is not the last number. Going in, the memo had PayPal at 7.5x trailing free cash flow[^memo-pypl-evfcf-20260814] at a 13.4% free cash flow yield[^memo-pypl-fcfyield-20260814], on nearly $7 billion of trailing free cash flow[^memo-pypl-fcf-20260814]. And in the same week PayPal said it will cut roughly 20% of its workforce, about 4,800 people, over the next few years[^news-pypl-layoffs-20260814], while raising full-year adjusted EPS guidance to about $5.38[^news-pypl-guidance-raise-20260814]. A 13% yield and a 20% headcount cut is what a company looks like once it has quietly agreed the growth story is over and the cash is the story. Ava: Eli Lilly put up a quarter that makes the rest of large-cap healthcare look sedentary. Second-quarter revenue of $22.97 billion, up 47.7%, beating consensus by 11.4%, with adjusted EPS of $8.38 against $6.58 expected[^news-lly-earnings-20260814]. Full-year EPS guidance went up nearly $3 at the midpoint, to $35.50-36.50[^news-lly-eps-guidance-20260813]. The oral GLP-1, Foundayo, took its first European approval in the UK[^news-lly-foundayo-approval-20260812], with weekly prescriptions at a new high of 29,388[^news-lly-foundayo-prescriptions-20260814]. And Lilly sued six companies over black-market sales of retatrutide, the obesity drug it has not launched yet[^news-lly-retatrutide-suits-20260812]. Suing counterfeiters of a product you cannot buy is its own kind of demand data. Lilly also agreed to acquire three vaccine biotechs — Curevo, LimmaTech and Vaccine Company — for up to $3.8 billion[^news-lly-vaccine-acquisition-20260814]. That is a company spending obesity money on vaccines, which is what you do when you have more cash than pipeline. The memo has Lilly at 55x trailing free cash flow[^memo-lly-evfcf-20260814] on $21 billion of trailing FCF[^memo-lly-fcf-20260814]. Ava: And Snowflake is being priced as though the AI-agent story is already settled. Oppenheimer took its target to $400 from $295, citing consumption trends and adoption of the company’s coding agent[^news-snow-oppenheimer-20260813]. Snowflake raised full-year guidance to about $7.65 billion[^news-snow-fy-guidance-20260813], on quarterly revenue of $1.39 billion, up 33%[^news-snow-q1-earnings-20260814]. The memo has Snowflake at 95x trailing free cash flow[^memo-snow-evfcf-20260814] on about $1.2 billion of trailing FCF[^memo-snow-fcf-20260814]. 95x. At that multiple the guidance is not a data point, it is the whole investment case. Ava: And Microsoft told you what the buildout costs in a single line item. Net losses on its OpenAI investment reduced Microsoft’s net income by $3.1 billion and diluted EPS by $0.41 — that is Microsoft’s own investor-relations disclosure, not somebody’s estimate[^news-msft-openai-loss-20260810]. JPMorgan raised its price target to $625 from $550 in the same week, on 24x projected fiscal 2028 EPS[^news-msft-jpm-target-20260814]. The memo has Microsoft at 53x trailing free cash flow[^memo-msft-evfcf-20260814], on $70 billion of trailing FCF[^memo-msft-fcf-20260814] against $116 billion of trailing capital expenditure[^memo-msft-capex-20260814]. Microsoft is the only name in the memo paying for this buildout twice: once through its own capex, and once through its partner’s income statement. Ava: Forward calendar. Home Depot Tuesday[^earn-hd]. Lowe’s and Target Wednesday[^earn-low][^earn-tgt]. Walmart and Deere Thursday[^earn-wmt][^earn-de]. The entire American consumer inside three days. And then the print that settles the argument in this whole show — NVDA, Wednesday the 26th[^earn-nvda]. We will take that one the weekend before it lands. Close Ava: That’s the show. Wall Street’s consensus on the AI trade this week: the demand is real, so the financing will sort itself out. Broadcom lost 5% finding out those are two separate questions. Ava: The buildout has outrun free cash flow, and every name we covered this week is a different answer to who pays. Alphabet pays out of its own cash flow until there isn’t any. Broadcom is asking its customers’ lenders. Intel asked the equity market and got $20 billion. Microsoft is paying twice and disclosing both. And Apple, which isn’t building any of it, is still handing its new CEO two points of gross margin. Ava: On Wednesday’s episode 2633, Hunt, Jason, and Mike took apart Nvidia’s $500 billion third-party financing platform[^ep-e2633] — the supply side of the exact question this show just spent 13 minutes on. Hunt, Jason, and Mike are back Wednesday on episode 2634. Ava: Download the memo at telltales.us. 20 pages, every week. And send us feedback through the Substack. Every note gets seen. Ava: The show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Closing disclaimer Ava: The following conversation is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * Apple Inc. (2026, August 14). Apple CEO Tim Cook confirms John Ternus as new CEO on September 1 . MacRumors. https://www.macrumors.com/2026/08/14/apple-ceo-tim-cook-reflects-on-legacy-apple/ * Barchart. (2026, August 14). Oppenheimer just gave Snowflake stock a big vote of confidence . Barchart. https://www.barchart.com/story/news/3857783/oppenheimer-just-gave-snowflake-stock-a-big-vote-of-confidence * BigGo Finance. (2026, August 14). Hyperscaler purchase commitments surge past $1.5 trillion, led by Alphabet . BigGo Finance. https://finance.biggo.com/news/e321e44d-121e-4d0e-8c2d-47ad70fcff25 * BigGo Finance. (2026, August 14). JPMorgan lifts Microsoft price target to $625 on AI infrastructure and Copilot profit potential . BigGo Finance. https://finance.biggo.com/news/f76980e4-671d-45a0-8b53-aa2d96cc789e * Breaking The News. (2026, August 14). Broadcom down nearly 5% amid BofA cut, exploit reports . Breaking The News. https://breakingthenews.net/Article/Broadcom-down-nearly-5-amid-BofA-cut-exploit-reports/66924839 * CNBC. (2026, August 10). Apple is a sell, glass iPhone debut may be canceled, Jefferies says . CNBC. https://www.cnbc.com/2026/08/10/apple-is-a-sell-glass-iphone-debut-may-be-canceled-jefferies-says-.html * CNBC. (2026, August 10). Don’t let a Wall Street analyst’s downgrade of Apple scare you out of the stock . CNBC. https://www.cnbc.com/2026/08/10/dont-let-a-wall-street-analysts-downgrade-of-apple-scare-you-out-of-the-stock.html * CNBC. (2026, August 11). Intel upsizes stock offering to $20 billion at $95 per share as AI demand accelerates . CNBC. https://www.cnbc.com/2026/08/10/intel-intc-stock-offering-ai.html * CNBC. (2026, August 12). Eli Lilly’s weight loss pill Foundayo gets UK approval . CNBC. https://www.cnbc.com/2026/08/11/eli-lilly-weight-loss-pill-foundayo-gets-uk-approval-plus-oil-holds-back-stocks.html * CNBC. (2026, August 12). Lilly sues six companies over alleged illegal sales of experimental obesity drug retatrutide . CNBC. https://www.cnbc.com/2026/08/12/lilly-lawsuits-obesity-drug-retatrutide.html * CNBC. (2026, August 14). Apple’s Tim Cook joined by Howard Lutnick in opening Houston manufacturing plant . CNBC. https://www.cnbc.com/2026/08/13/apples-tim-cook-and-howard-lutnick-open-houston-manufacturing-plant.html * CNBC. (2026, August 14). Berkshire Hathaway boosts Alphabet to a top three holding, ups Delta and housing bets . CNBC. https://www.cnbc.com/2026/08/14/berkshire-hathaway-boosts-alphabet-to-a-top-three-holding-ups-delta-and-housing-bets.html * eciks.org. (2026, August 14). Broadcom guides $56B AI revenue for 2026, up 180% from prior year . eciks.org. https://eciks.org/21181-broadcom-avgo-ai-revenue-guidance-2026 * Fierce Pharma. (2026, August 14). The oral GLP-1 tracker: Novo’s Wegovy pill vs Lilly’s Foundayo . Fierce Pharma. https://www.fiercepharma.com/pharma/oral-glp-1-tracker-launch-trajectories-lilly-foundayo-novo-wegovy-pill * Forbes. (2026, August 14). iPhone 18 Pro event tipped as Apple shifts key release schedule date . Forbes. https://www.forbes.com/sites/davidphelan/2026/08/14/iphone-18-pro-event-tipped-as-apple-shifts-key-release-schedule-date/ * MarketScreener/Reuters. (2026, August 14). Alphabet becomes Berkshire Hathaway’s third-largest investment . MarketScreener. https://www.marketscreener.com/news/alphabet-becomes-berkshire-hathaway-s-third-largest-investment-ce7859dfdb8ef224 * Microsoft Corporation. (2026, August 10). FY26 Q1 — Performance [Investor relations disclosure]. Microsoft Investor Relations. https://www.microsoft.com/en-us/investor/earnings/fy-2026-q1/performance * MM&M Online. (2026, August 14). Rx Rundown: KKR, Eli Lilly, Procter & Gamble and more . MM&M Online. https://www.mmm-online.com/news/rx-rundown-kkr-eli-lilly-procter-gamble-and-more/ * Panda Forecast. (2026, August 14). GOOG Stocktwits, news and mentions . Panda Forecast. https://pandaforecast.com/company-news/?ticker=goog * Space Exploration Technologies Corp. (2026, August 14). Schedule 13G — passive investment disclosure (Alphabet, XXVI Holdings, Google; 7.2% of SpaceX Class A) [SEC filing]. Stock Titan. https://www.stocktitan.net/sec-filings/SPCX/schedule-13g-space-exploration-technologies-corp-passive-investment-d-8e184da44355.html * TechCrunch. (2026, August 14). Talks to sell PayPal to Stripe and Advent are heating up . TechCrunch. https://techcrunch.com/2026/08/14/talks-to-sell-paypal-to-stripe-and-advent-are-heating-up/ * The New York Times. (2026, August 14). Amazon and Alphabet’s profits reveal circular nature of A.I. boom . The New York Times. https://www.nytimes.com/2026/08/14/business/ai-tech-profits.html * Ts2.tech. (2026, August 14). PayPal stock closes 1.9% above $60.50 bid as talks continue . Ts2.tech. https://ts2.tech/en/paypal-stock-closes-1-9-above-60-50-bid-as-talks-continue/ * Watcher Guru. (2026, August 14). Should you buy Apple stock after its 5% post-earnings drop? Watcher Guru. https://watcher.guru/news/should-you-buy-apple-stock-after-its-5-post-earnings-drop * Yahoo Finance. (2026, August 13). Eli Lilly (LLY) Q2 2026 earnings call transcript . Yahoo Finance. https://finance.yahoo.com/healthcare/articles/eli-lilly-lly-q2-2026-032008362.html * Yahoo Finance. (2026, August 13). Oppenheimer revamps Snowflake stock target for 2026 . Yahoo Finance. https://ca.finance.yahoo.com/news/oppenheimer-revamps-snowflake-stock-target-200242396.html * Yahoo Finance. (2026, August 14). 5 revealing analyst questions from Eli Lilly’s Q2 earnings call . Yahoo Finance. https://finance.yahoo.com/markets/stocks/articles/5-revealing-analyst-questions-eli-054900384.html * Yahoo Finance. (2026, August 14). Apple dropped by 5% after earnings . Yahoo Finance. https://finance.yahoo.com/markets/stocks/articles/apple-dropped-5-earnings-history-105000023.html * Yahoo Finance. (2026, August 14). Broadcom plunges 5% as its AI boom faces a $370 billion financing question . Yahoo Finance. https://finance.yahoo.com/technology/ai/articles/broadcom-plunges-5-ai-boom-170842189.html * Yahoo Finance. (2026, August 14). Tech layoffs 2026: Tracking all of the job losses across TikTok, Microsoft, Meta, Oracle, Samsung, Zillow and others . Yahoo Finance. https://tech.yahoo.com/general/article/tech-layoffs-2026-tracking-all-of-the-job-losses-across-tiktok-microsoft-meta-oracle-samsung-zillow-and-others-144545528.html * ZoomInfo. (2026, August 13). Snowflake — Overview, news & similar companies . ZoomInfo. https://www.zoominfo.com/c/snowflake-computing/367752085 Internal data Internal data is provided on a best efforts basis. Earnings slate Forward earnings dates are sourced from the W2633 earnings slate, pulled 2026-08-14. See 04. Publishing/shows/weekend-update/W2633/dryrun/earnings_slate.md. * HD — Home Depot, 2026-08-18 (Tuesday). Consensus EPS $4.73, consensus revenue $47.3B. * LOW — Lowe’s, 2026-08-19 (Wednesday). Consensus EPS $4.23, consensus revenue $26.2B. * TGT — Target, 2026-08-19 (Wednesday). Consensus EPS $2.25, consensus revenue $26.1B. * WMT — Walmart, 2026-08-20 (Thursday). Consensus EPS $0.74, consensus revenue $186.7B. * DE — Deere & Company, 2026-08-20 (Thursday). Consensus EPS $4.71, consensus revenue $10.8B. * NVDA — Nvidia, 2026-08-26 (Wednesday). Consensus EPS $2.08, consensus revenue $91.9B. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 14, 202631 min

Sold Out Through 2028

Hunt, Jason, and Mike walk the Cash Flow Memo through $90 oil that will not change oil-patch spending, a compute market sold out through 2028, and a healthcare desk that still found time for Eliquis. The Cashflow Memo Key Takeaways * Hunt’s $70-$90 oil range still holds at the top - crude is ~$90 and he does not see it running much higher - but Iran’s infeasible demands (US bases out, Hormuz cargo tolls, reparations, sanctions off) keep him closer to 90 than 80 for 6-12 months; ~20 ships/day still move (Iraqi crude allowed, Saudis can go Red Sea), producers still underwrite $70-75 so activity does not spike, and $90 oil maps to roughly $4.00-$4.20 US gasoline. * Industrial read-through is Caterpillar: data-center turbines plus reshoring and data-center construction more than offset lagging housing, and Hunt says tariffs, $90 oil, and the political noise are not changing what they hold or add; Mike wants more macro time on these calls now that Warsh is detoxifying Fed guidance. * Compute demand is still exponential: Jassy says AWS AI is sold out through 2026-27 and most of 2028, $200B of CapEx this year still will not close it, and recursive learning models by year-end are another multiple of inference per user - Hunt prefers Amazon, Google, and Microsoft as the compute owners and cannot make up his mind on Meta. * Supply cannot catch that demand in ’27-’28: New York’s >200 MW hold, Virginia saturation, and the Texas governor’s ERCOT audit all push off-grid; combined cycle is 3-4 years out, simple turbines (GE, Cat, Siemens) are sold out, SpaceX Memphis (~$30B, 2 GW, 1-1.5 year payout to Anthropic and Google, 4-5 GW ambition by end-’27) is the exception; Hunt would avoid CoreWeave even after it extended 2020 A100s through 2029 at a 25% price hike. * Chip and memory bottlenecks sit behind the power constraint - TSMC wafers plus packaging, Intel closer on packaging than lithography, memory prices hitting Apple - and Tesla/SpaceX’s Terafab is a first-principles end-run around ASML (particle-accelerator EUV vs tin-droplet lasers) that Huawei is already pursuing; healthcare: FDA closes the GRAS food-ingredient loophole, the childhood vaccine schedule goes 17 to 11 diseases (Japan’s MMR split was reversed after completion collapsed), Thermo Fisher is seeing early-stage equipment rebound, and the AZN-BMY rumor died even as Eliquis (one-third of BMY sales, largest Medicare Part D line) faces a 2028 patent cliff that Jason puts at ~$10B of Part D savings. Show Notes [00:00] Intro & Cash Flow Memo Download the memo at telltales.us; 30 minutes on energy, technology, and healthcare cash flows. [00:27] Iran, Hormuz, and $90 Oil Iran’s demands are not negotiable, so Hunt keeps oil closer to $90 than $80 for 6–12 months. About 20 ships a day still move; Iraqi crude is allowed through, and Saudi barrels can go Red Sea. [04:20] $70 Decisions and Caterpillar Producers still underwrite $70–75, so activity does not spike. Caterpillar is the industrial read-through: data-center turbines and reshoring more than offset weak housing. [07:47] AWS Sold Out Through 2028 Jassy says AWS AI demand is sold out through this year, next year, and most of 2028. $200B of CapEx will not close it, and recursive models by year-end add another multiple of inference per user. [10:37] The Grid Says Build Your Own Power New York’s hold, Virginia saturation, and the Texas governor’s ERCOT audit all push data centers off-grid. Combined cycle is years out; simple turbines are sold out. SpaceX Memphis (~$30B, 2 GW) is the exception. [14:45] A 2020 Chip Gets a 25% Hike CoreWeave extended Nvidia A100 rentals through 2029 at a 25% price increase. Hunt would still avoid the stock and own Amazon, Google, and Microsoft instead. [16:31] TSMC, Memory, and the Terafab TSMC wafers and packaging, plus a memory squeeze that hits Apple, sit behind the power constraint. Tesla and SpaceX are planning a Terafab that replaces ASML’s tin-droplet EUV with a particle accelerator. [22:15] Why It Won’t Run on Your Phone Frontier models need a rack of GPUs and have to run 24/7 even when the phone is offline. On-device AI will route requests, not replace the cloud. [24:11] Huawei and the China Supply Threat Locked out of the latest ASML tools, China is already on particle accelerators and e-beam. If the rest of the world stays chip-constrained, Huawei has a willing market. [26:12] Healthcare: FDA, Vaccines, and the Eliquis Cliff FDA closes the GRAS loophole; the childhood schedule goes 17→11 diseases. Thermo Fisher is seeing early-stage equipment rebound. The AZN–BMY rumor died; Eliquis is one-third of BMY and the largest Medicare Part D line, with a 2028 patent cliff Jason puts at ~$10B of savings. Subscribe for the weekly Cash Flow Memo walkthrough, download the memo at telltales.us, and join us next Wednesday. Cashtags $AAPL $AMZN $ASML $BMY $CAT $CRWV $GOOGL $INTC $META $MSFT $NVDA $SEI $TSLA $TSM This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 10, 202614 min

Weekend Update - W2632

▶ Explore this week’s Tape — live, sortable, drill-down → A note from the desk: this week’s update is landing a few days late. We hit a technical problem over the weekend that took our production pipeline down. Everything below is as of Friday’s close, August 7. We’re back on the normal cadence next week. ## The Public Market Just Quoted a Price on a Drug Pipeline. The Price Was Zero. Eighteen billion dollars of biotech changed hands inside seventy-two hours this week, and not one dollar of it was priced by the tape. That is the part worth sitting with. Not the premiums, not the CEO change, not the guidance cut. The fact that when a listed market and a private buyer looked at the same molecules on the same Monday, they came back with numbers that do not live in the same decade. The cleanest evidence is an instrument almost nobody will look at. Curium is paying a hundred-two-fifty a share in cash for Lantheus at closing, plus up to twelve dollars a share in contingent value rights tied to clinical milestones, with the deal closing in the first half of 2027. ¹ Lantheus finished the week around a hundred and one.² Read that as the market does: the cash is money-good, and the twelve dollars of clinical optionality is worth approximately nothing. Approximately nothing. That is not a Lantheus fact. It is a quoted, tradeable, sector-wide statement about what the public market will pay for radiopharmaceutical milestones it has not yet seen work, and the answer is that it will not pay. Every discounted-cash-flow argument about pipeline value in this space now has a live market print arguing against it, and the print says zero. Meanwhile the buyers on the other side of that refusal are underwriting the exact same molecules at a discount rate the tape will not touch. Vertex beat the quarter, raised the year to roughly thirteen billion, and wrote a ten-billion-dollar cash check for Crinetics at eighty-five a share in the same week. ³ ⁴ ⁵ It can do that because a franchise throwing off close to four billion of trailing free cash flow, marked in the Cash Flow Memo around thirty times, funds a decade-long option without going near the debt line.⁶⁷ Curium is private capital reaching the same conclusion through a different funding stack. Both transacted above where the listed market had the asset marked. The cashflow read is in Marcus’s column below; short version, Lantheus screens like a cash machine and now trades like a legal document. And then BioNTech, which is the one that ratifies all of it. Seven times trailing free cash flow, a fourteen percent yield, a market that has effectively stopped underwriting a future at all.⁸⁹ Management’s answer was not to argue. It halved the revenue guide, replaced the co-founder in the CEO seat, said it would close manufacturing sites affecting up to eighteen hundred and sixty jobs, and authorized a billion-dollar buyback. ¹⁰ ¹¹ ¹² That is a management team agreeing, in cash, with the tape’s refusal to fund its own pipeline. Here is the second-order effect nobody put a number on this week. Every one of these transactions moves the option value of a drug pipeline off a public balance sheet and onto a private or strategic one, at the precise moment the public market has declared that optionality worthless. Public shareholders get the cash and forfeit the decade. That is not a premium — it is a settlement. Crinetics holders get eighty-five dollars today; Vertex gets whatever those molecules are in 2034. Lantheus holders get a hundred-two-fifty and a lottery ticket the market has already voided. The premium is the consolation prize for handing over the part that compounds. What changes the read. Watch the contingent value right itself. It is a listed instrument that will trade between now and the close in the first half of 2027, and it is the only continuous public quote on radiopharmaceutical milestone risk anyone will get. If it develops a real bid, the public market is re-underwriting clinical optionality and this discount closes. If it sits at nothing through the close, the price-setting has moved permanently off the tape, and the next listed rare-disease or radiopharma name to go strategic or private goes at a premium the screens never marked. The other test is BioNTech’s oncology data, which is the only thing that separates a rational retreat at seven times from a market that got it wrong. Wall Street’s consensus on biotech M&A: a premium is a win for shareholders. Ten billion in cash and a contingent value right nobody will bid for suggests the premium is what you get paid to stop owning the decade. The Tape — W2632 Universe of 94 cashflow-memo names, snap dates 2026-07-31 → 2026-08-07. Composite is rank-sum percentile of FCF Yield + NTM Revenue Growth (higher = better balance). Banks and finance-book names shown separately. Telltales Yield — Top 10 From the Cashflow Desk — Marcus Graham Lantheus ranks in the table above on cash flows that stopped setting its price this week. The composite reads it as a balanced cash generator, 8.2% FCF yield, top-five in the universe, and none of that is what clears the stock now. It is a legal document trading against $102.50 of cash at closing plus up to $12 a share in contingent value rights, and the tape is marking that $12 at approximately nothing. That is not laziness. Radiopharmaceutical milestones are clinical, not commercial, and the public market has never priced that risk well in either direction. The test between now and the first-half-2027 close is whether the CVR develops a real bid. A bid means someone is re-underwriting milestones the seller could not prove standing on its own. Telltales Yield — Bottom 10 This Week’s Reporters Sector Medians Debt / FCF Watch (highest leverage on TTM FCF) Weekly Price Movement Top 5 (week-over-week price) Bottom 5 (week-over-week price) Banks (shown separately — FCF metric not meaningful) Finance-book — FCF not comparable Customer-float / captive-finance / reserve businesses (IBKR broker float, KMX CarMax Auto Finance, PYPL customer funds, CRCL stablecoin reserves). The memo’s operating-FCF method overstates their FCF, so they are held off the ranked leaderboard pending the P&L-waterfall rebuild. Data Gaps 85 of 92 ranked-eligible names ranked. 7 dropped for missing FCF yield or NTM revenue growth; 7 shown separately (banks + finance-book, FCF not comparable). Source: cashflow-memo master_2026-08-07.csv . NTM growth from analyst-estimates consensus. Composite is a percentile rank, not a recommendation. The Issue — This Week's Brief The Cashflow Memo Weekend Update - W2632 Why a Q2 beat bought nothing this week, and $18 billion of biotech changed hands The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the companies in the Cash Flow Memo. About 14 minutes. No filler. Download the memo at telltales.us . Hunt, Jason, and Mike are back Wednesday on episode E2633. Chapter markers * Time | Segment * 0:00 | Cold open — a good quarter bought nothing * 0:45 | Theme — the quarter is a receipt (AMD, CVS, Celsius) * 4:45 | Deep dive — page 15: Vertex, Lantheus, BioNTech * 8:45 | Rapid fire — ConocoPhillips, Harrow, and the forward calendar * 11:45 | Close, Consensus Watch, and the Wednesday tease * 12:40 | Closing disclaimer Full transcript Cold open Ava: A good quarter bought you nothing this week. The companies that beat got sold. The one that missed got an activist who wants the CEO’s job. And the biggest checks anyone wrote were for assets that don’t pay off until the 2030s — $18 billion of biotech changed hands inside 72 hours[^news-vrtx-crinetics-20260804][^news-lnth-curium-20260803]. Nobody was paying for the quarter. They were paying for the next five years. So today: two beats that got punished, one miss that turned into a proxy fight, and three companies on the same page of the memo making three incompatible bets on the same decade. Ava: Telltales Weekend Update. I’m Ava Cabot, with Marcus Graham at the cashflow desk. Theme — the quarter is a receipt Ava: AMD delivered about as clean a print as semis produced this quarter, and the market took 7% out of the stock for it. Revenue $11.5 billion, up 52% year-over-year. Gross margin 54%. Net income $2.3 billion, EPS $1.30[^news-amd-q2-20260805]. Then the Q3 guide landed at $13.0 billion at the midpoint, above consensus[^news-amd-q3guide-20260805]. Beat, beat, and beat. Down 7%[^news-amd-stockdrop-20260805]. Marcus — what did they actually get punished for? Marcus: Not the quarter. The price of admission. The memo had AMD at 88x trailing free cash flow going into this print, Q1 10-Q confirmed[^memo-amd-evfcf-20260807], on $8.7 billion of trailing free cash flow[^memo-amd-fcf-20260807]. We re-anchor when the Q2 10-Q files. At 88x you are not buying a beat, you are buying years of uninterrupted acceleration — and Jean Hu just told you the data center step-up is second-half weighted[^news-amd-datacenter-20260805]. Second-half weighted means the proof shows up after the multiple already has to hold. That’s the part that got sold. Ava: And in the same week they went shopping. AMD agreed to buy Taalas, a Canadian startup, to add another category of AI silicon for the data center[^news-amd-taalas-20260806]. Marcus, is that a company that thinks it’s ahead? Marcus: It’s a company hedging its own roadmap, which is the correct thing to do and an uncomfortable thing to watch. Going into this print the memo had AMD running $1.2 billion of capex trailing twelve[^memo-amd-capex-20260807] against under $1 billion of buybacks[^memo-amd-buyback-20260807], Q1 10-Q confirmed — and that was before Taalas. Lisa Su spent the week praising Elon Musk after SpaceX committed to Nvidia exclusively[^news-amd-musk-20260805]. Buying a second accelerator architecture says management does not believe one roadmap wins this market outright. That is honest, and it is the opposite of what a multiple in the high 80s is underwriting. The test is whether the Taalas silicon shows up in a customer deployment before that multiple has to be defended again. Ava: Gracious in public, hedging in the checkbook. CVS beat the quarter, raised the year, then said one thing about 2027 and gave it all back. Adjusted EPS guidance up to $7.90–$8.10, from $7.30–$7.50[^news-cvs-q2guide-20260805]. $2 billion of costs already out the door, stores closed, leadership reshuffled[^news-cvs-costs-20260805]. And then a preliminary look at 2027 profit that disappointed, plus a warning about the pharmacy benefit business next year. Shares fell[^news-cvs-2027-20260805]. Marcus — twelve months of execution against one sentence about a year that hasn’t started. Marcus: On this balance sheet, the sentence should win. The memo had CVS at 16x trailing free cash flow going in, Q1 10-Q confirmed[^memo-cvs-evfcf-20260807], carrying 7.5 turns of debt to free cash flow[^memo-cvs-debtfcf-20260807]. That leverage is what makes a 2027 comment expensive — a levered turnaround gets paid for the trajectory, not for the print. What would change my view is the pharmacy benefit line holding through next year’s renewal cycle. If it doesn’t, the deleveraging slides a year to the right, and the multiple is the thing doing the waiting. Ava: And then Celsius, where a missed quarter turned into a job application. Q2 revenue $817.9 million against consensus of $870 million[^news-celh-revenue-20260806]. GAAP EPS down to $0.14 from $0.33 a year ago[^news-celh-eps-20260805]. The core Celsius brand shrank about 12%[^news-celh-brand-20260806]; Alani Nu retail sales grew 56%[^news-celh-alani-20260806]. So the growth is real. It’s just not the name on the can, and it’s not the name on the building. Adjusted EPS came in at $0.36, so the operating business is not broken[^news-celh-adjeps-20260805] — what’s broken is the story that Celsius, the brand, is the growth engine. Then Friday. Russ Savage, the man who founded Rockstar Energy, disclosed a 4.7% stake, more than 12 million shares, and said the board should replace CEO John Fieldly[^news-celh-savage-20260807]. With himself. Nobody buys 12 million shares of a company to relitigate last quarter. He’s buying the next five years of a portfolio he thinks is being run by the wrong person — and he built a competitor in this exact category before he bought a share of this one[^news-celh-savage-20260807]. Deep dive — page 15: Vertex, Lantheus, BioNTech Ava: Page 15 of the Cash Flow Memo is pharma and biotech, and this week three names on that one page made three completely different bets on the same decade. Vertex is buying. Lantheus is being bought. BioNTech is shrinking. Ava: Vertex beat, with Q2 revenue of $3.33 billion, up 12%[^news-vrtx-q2rev-20260803], raised full-year guidance to $13.1–$13.2 billion[^news-vrtx-guidance-20260804], and agreed to pay $10 billion in cash for Crinetics at $85 a share[^news-vrtx-crinetics-20260804]. Lantheus agreed to sell itself to Curium for up to $8 billion — $102.50 a share in cash at closing, plus up to $12 a share in contingent value rights, closing in the first half of 2027[^news-lnth-curium-20260803]. And BioNTech cut full-year revenue guidance from €2.5–€3.1 billion down to €1.6–€1.9 billion[^news-bntx-guidance-20260804], named Guido Oelkers to replace co-founder Ugur Sahin as CEO[^news-bntx-ceo-20260803], and said it will close manufacturing sites affecting up to 1,860 jobs while authorizing a $1 billion buyback[^news-bntx-layoffs-20260805]. Marcus — three answers to the same question. Which one is the market getting wrong? Marcus: Lantheus, and the spread tells you where. The stock closed the week around $101[^memo-lnth-price-20260807] against $102.50 of cash at closing[^news-lnth-curium-20260803]. That’s a market saying the deal closes, and pricing the $12 of contingent value rights at approximately nothing. In radiopharmaceuticals the milestones are clinical, not commercial. A CVR with no bid is the market’s statement about what the buyer thinks it’s getting, and what the seller could never prove standing on its own. Ava: Free option, no bid. And Vertex is standing on the other side of that trade. Marcus: Vertex is paying cash for a pipeline it can’t sell for years, and it can afford to. The memo had Vertex at 30x trailing free cash flow going into the print, Q1 10-Q confirmed[^memo-vrtx-evfcf-20260807], on $3.7 billion of trailing free cash flow[^memo-vrtx-fcf-20260807]. $10 billion out the door against that clears without touching the debt line. We re-anchor when the Q2 10-Q files. What I’d watch is whether the raised guide survives the integration year, because a company that raises the year and writes the biggest check in its history in the same week is telling you the core franchise is funding the option, not the other way around. Marcus: BioNTech is the one nobody wants to look at, and it’s the most honest of the three. Going into this print the memo had them at 7x trailing free cash flow[^memo-bntx-evfcf-20260807] at a 14% yield[^memo-bntx-fcfyield-20260807], Q1 10-Q confirmed, and those are euros, translated in the memo at today’s rate. That is a market that has stopped underwriting a future at all. Halving the guide, closing plants, and authorizing a buyback is management agreeing with that price. I’d weight it as a rational retreat rather than a value trap — but the two look identical until the oncology pipeline delivers data. Ava: So what does page 15 actually say this week? Marcus: That the discount rate on a biotech pipeline is being set by somebody other than the public market. Vertex at 30x trailing free cash flow and BioNTech at 7x sit on that same page[^memo-vrtx-evfcf-20260807][^memo-bntx-evfcf-20260807], applied to the same underlying activity — finding molecules that work. Curium is private capital, Vertex is a strategic, and both transacted above where the tape had the asset marked. When the price-setters on a page are a private buyer and a strategic buyer, the listed multiple stops being the opinion that matters. What would flip that is the Lantheus CVR trading with a real bid before the close. Ava: Same page, same week, same disease franchises. One company spent $10 billion buying a decade. One took $102.50 a share to hand its decade to somebody else. One said out loud that it doesn’t have one to sell. Three managements priced their own optionality in public inside 72 hours. The earnings reactions were the small part. Rapid fire Ava: Rapid fire. ConocoPhillips posted its best profit since 2022 and used the same press cycle to change CEOs[^news-cop-profit-20260806]. Q2 earnings of $3.23 a share[^news-cop-q2eps-20260806]. Ryan Lance is out after 14 years into a transitional executive chair role; CFO Andy O’Brien becomes president and CEO September 1, with Konnie Haynes-Welsh moving up to CFO[^news-cop-succession-20260806]. Going into the print, the memo had Conoco at 9x trailing free cash flow[^memo-cop-evfcf-20260807] at a 10.8% yield[^memo-cop-fcfyield-20260807], on $18.5 billion of trailing free cash flow[^memo-cop-fcf-20260807]. That trailing twelve carried $4.0 billion of dividends and $4.5 billion of buybacks[^memo-cop-dividend-20260807][^memo-cop-buyback-20260807]. Handing a franchise returning that much capital to the finance seat at the top of the cycle is a choice. The thing to watch is whether the return pace survives the handoff, because a new CEO who came up through the CFO’s chair has every incentive to build a war chest in his first year. Ava: Harrow bought a product four days before it has to explain itself. Definitive agreement for the global rights to Tyrvaya from Viatris — $30 million up front, up to $70 million more in milestones tied to net sales[^news-hrow-tyrvaya-20260806]. Tyrvaya is the only FDA-approved nasal spray for dry eye disease[^news-hrow-tyrvaya-fda-20260806]. On page 20 of the memo, Harrow sits at 46x trailing free cash flow[^memo-hrow-evfcf-20260807] with 8 turns of debt to free cash flow[^memo-hrow-debtfcf-20260807], Q1 10-Q confirmed. And Harrow reports Monday, consensus at a $0.23 loss on $70.4 million of revenue[^earn-hrow]. A levered specialty pharma company buying a commercial asset the week of its own print is either conviction or timing. Monday says which. Ava: Also on page 20. Uber grew gross bookings 22%[^news-uber-bookings-20260804] and non-GAAP operating income 40%[^news-uber-opinc-20260804], then guided Q3 light and dropped 5%[^news-uber-guidance-20260805] — the same week it committed more than $10 billion to a robotaxi aggregator strategy[^news-uber-robotaxi-20260806]. And Airbnb beat and raised full-year revenue guidance to at least mid-teens growth[^news-abnb-guidance-20260807], with the stock up 15%[^news-abnb-surge-20260807] on a World Cup travel surge[^news-abnb-worldcup-20260807]. Brian Chesky says the company will spend a lot more on AI this year because inference came in cheaper than he budgeted for[^news-abnb-ceoai-20260807]. Which is a CEO announcing his own forecast was wrong, in the happiest available way. Ava: Two more. Palantir grew US commercial revenue 149% to $764 million[^news-pltr-commercial-20260804], total revenue 93%[^news-pltr-total-20260804], raised the year to 82% growth[^news-pltr-fyguide-20260804], and put up 29% in a single session[^news-pltr-surge-20260804]. The memo had it at 102x trailing free cash flow before any of that, Q1 10-Q confirmed[^memo-pltr-evfcf-20260807]. 102x. Alex Karp’s line on the call was that his customers have, quote, declined to become vassal states of the language labs[^news-pltr-karp-20260804]. Nobody has ever sold sovereignty harder, and at 102x, nobody has ever needed to. And Disney beat on fiscal Q3[^news-dis-q3-20260805], sold its 50% stake in A+E Global Media to Hearst for $1.2 billion[^news-dis-ae-20260805], and signed a global short-form content deal with TikTok[^news-dis-tiktok-20260806] — three storylines, one week. Disney is selling the cable asset and renting the attention. Ava: Forward calendar. Harrow Monday[^earn-hrow]. Venture Global Tuesday[^earn-vg]. Then the consumer block the week after — Home Depot Tuesday[^earn-hd], Lowe’s and Target Wednesday[^earn-low][^earn-tgt], Walmart and Deere Thursday[^earn-wmt][^earn-de]. Five names, three days, and the whole picture on household spending. Close Ava: That’s the show. A good quarter bought nothing this week. Wall Street’s consensus on earnings season: a beat gets bought. AMD beat on revenue, profit, and the guide and lost 7%. CVS beat and raised and gave it back on one sentence about 2027. Consensus is still grading last quarter’s tape. Ava: What actually got paid for this week was the 2030s — $10 billion for Crinetics, up to $8 billion for Lantheus, $100 million for a single nasal spray. The prints were the receipts. Ava: On Wednesday’s episode 2632, Hunt, Jason, and Mike took Harrow through the AI-in-healthcare segment and landed on it as a commercialization business, one where AI isn’t the deciding factor[^ep-e2632]. Four days later Harrow went out and bought something to commercialize. Hunt, Jason, and Mike are back Wednesday on episode 2633. Ava: Download the memo at telltales.us. Twenty pages, every week. And send us feedback through the Substack. Every note gets seen. Ava: The show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Closing disclaimer Ava: The following conversation is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you. The views expressed on this podcast are the host alone and do not constitute an offer to sell or a recommendation to purchase, or a solicitation of an offer to buy any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the host nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. The host and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future, and may or may not hold positions in the securities mentioned. Sources * Advanced Micro Devices. (2026, August 5). AMD reports second quarter 2026 financial results [Press release]. https://ir.amd.com/news-events/press-releases/detail/1295/amd-reports-second-quarter-2026-financial-results * Associated Press. (2026, August 7). New kind of flu shot is on the way as the FDA approves Moderna’s mRNA-based vaccine . AP News. https://apnews.com/article/flu-vaccine-moderna-mrna-fda-mflusiva-59d991a6bf70c26e2f0c210cc8ca87f1 * Automotive World. (2026, August 6). Uber pledges $10bn to robotaxis, Waymo still important . Automotive World. https://www.automotiveworld.com/news/uber-pledges-10bn-to-robotaxis-waymo-still-important/ * Axios. (2026, August 5). Disney selling A+E stake, announces partnership with TikTok . Axios. https://www.axios.com/2026/08/05/disney-ea-hearst-cable-tv * BioNTech. (2026, August 3). BioNTech announces appointment of Guido Oelkers to management board as Chief Executive Officer [Press release]. https://www.biontech.com/int/en/home/mediaroom/news/press-releases/2026/08/BioNTech-Announces-Appointment-of-Guido-Oelkers-to-Management-Board-as-Chief-Executive-Officer.html * BioNTech. (2026, August 4). BioNTech announces second quarter 2026 financial results and corporate update [Press release]. https://investors.biontech.de/news-releases/news-release-details/biontech-announces-second-quarter-2026-financial-results-and * Bloomberg. (2026, August 5). CVS Health falls after warning on 2027 outlook, Caremark challenges . Bloomberg. https://www.bloomberg.com/news/articles/2026-08-05/cvs-raises-outlook-as-medical-cost-improvement-drives-profits * Bloomberg. (2026, August 6). Advanced Micro Devices to buy startup Taalas for new AI chips . Bloomberg. https://www.bloomberg.com/news/articles/2026-08-06/advanced-micro-devices-to-buy-startup-taalas-for-new-ai-chips * Celsius Holdings, Inc. (2026, August 5). Celsius Holdings reports second quarter 2026 financial results [Press release]. https://ir.celsiusholdingsinc.com/news/news-details/2026/Celsius-Holdings-Reports-Second-Quarter-2026-Financial-Results/default.aspx * CNBC. (2026, August 4). Palantir (PLTR) earnings Q2 2026 . CNBC. https://www.cnbc.com/2026/08/03/palantir-pltr-earnings-q2-2026.html * CNBC. (2026, August 4). Palantir stock skyrockets 29%, narrowly missing its best day ever after otherworldly results . CNBC. https://www.cnbc.com/2026/08/04/palantir-2q-earnings-ai-sovereign-tools.html * CNBC. (2026, August 5). AMD earnings report Q2 2026 . CNBC. https://www.cnbc.com/2026/08/04/amd-earnings-report-q2-2026.html * CNBC. (2026, August 5). CVS Health (CVS) earnings Q2 2026 . CNBC. https://www.cnbc.com/2026/08/05/cvs-health-cvs-earnings-q2-2026.html * CNBC. (2026, August 5). Disney (DIS) earnings Q3 2026 . CNBC. https://www.cnbc.com/2026/08/05/disney-dis-earnings-q3-2026.html * CNBC. (2026, August 5). Lisa Su brushes off Musk’s Nvidia commitment as AMD stock sinks after earnings . CNBC. https://www.cnbc.com/2026/08/05/amd-stock-today-earnings-q2.html * CNBC. (2026, August 5). Uber stock sinks 5% after weak guidance despite revenue growth . CNBC. https://www.cnbc.com/2026/08/05/uber-stock-q2-2026-earnings.html * CNBC. (2026, August 6). Airbnb raises its outlook as growth accelerates and AI speeds product development [Video]. CNBC. https://www.cnbc.com/video/2026/08/06/airbnb-raises-its-outlook-as-growth-accelerates-and-ai-speeds-product-development.html * CNBC. (2026, August 6). ConocoPhillips CEO Ryan Lance departs as oil producer posts best profit since 2022 . CNBC. https://www.cnbc.com/2026/08/06/conocophillips-ceo-ryan-lance-departs-as-oil-producer-posts-best-profit-since-2022.html * CNBC. (2026, August 7). Chesky says Airbnb will spend a lot more on AI as earnings beat and stock surges 15% . CNBC. https://www.cnbc.com/2026/08/07/chesky-airbnb-ai-earnings.html * CNBC. (2026, August 7). Rockstar Energy founder builds Celsius stake, wants to take over as CEO . CNBC. https://www.cnbc.com/2026/08/07/rockstar-energy-founder-celsius-stake-ceo.html * ConocoPhillips. (2026, August 6). ConocoPhillips announces planned leadership succession: Andy O’Brien named president and CEO, Ryan Lance to assume transitional executive chair role, Konnie Haynes-Welsh appointed CFO [Press release]. https://www.conocophillips.com/news-media/story/conocophillips-announces-planned-leadership-succession-andy-obrien-named-president-and-ceo-ryan-lance-to-assume-transitional-executive-chair-role-konnie-haynes-welsh-appointed-cfo/ * ConocoPhillips. (2026, August 6). ConocoPhillips announces second-quarter 2026 results and quarterly dividend [Press release]. https://www.conocophillips.com/news-media/story/conocophillips-announces-second-quarter-2026-results-and-quarterly-dividend/ * CVS Health. (2026, August 5). CVS Health Corporation reports strong second quarter 2026 results and raises full-year 2026 guidance [Press release]. https://www.cvshealth.com/news/company-news/cvs-health-corporation-reports-strong-second-quarter-2026-results-and-raises-full-year-2026-guidance.html * Globe Newswire. (2026, August 6). Harrow acquires global rights to TYRVAYA, the first and only FDA-approved nasal spray for dry eye disease [Press release]. https://www.globenewswire.com/news-release/2026/08/06/3340081/0/en/harrow-acquires-global-rights-to-tyrvaya-the-first-and-only-fda-approved-nasal-spray-for-dry-eye-disease.html * Invezz. (2026, August 7). Airbnb stock jumps 11% as World Cup travel sparks a surprise growth burst . Invezz. https://invezz.com/news/2026/08/07/airbnb-stock-jumps-11-as-world-cup-travel-sparks-a-surprise-growth-burst/ * Lantheus Holdings. (2026, August 3). Curium announces definitive agreement to merge with Lantheus [Press release]. https://investor.lantheus.com/news-releases/news-release-details/curium-announces-definitive-agreement-merge-lantheus * Ophthalmology Times. (2026, August 7). Harrow acquires global rights to Tyrvaya . Ophthalmology Times. https://www.ophthalmologytimes.com/view/harrow-acquires-global-rights-to-tyrvaya * Palantir Technologies. (2026, August 4). Q2 2026 press release [Exhibit 99.1]. U.S. Securities and Exchange Commission EDGAR. https://www.sec.gov/Archives/edgar/data/1321655/000132165526000039/a2026q2ex991pressrelease.htm * Reuters. (2026, August 3). Palantir lifts annual revenue forecast on steady demand . Reuters. https://reuters.com/technology/palantir-raises-annual-revenue-forecast-strong-demand-us-government-commercial-2026-08-03 * Reuters. (2026, August 5). BioNTech SE company page: manufacturing site closures and $1.0 billion buyback authorization . Reuters. https://www.reuters.com/company/biontech-se/ * StockAnalysis. (2026, August 6). Celsius Holdings (CELH) stock price & overview . StockAnalysis. https://stockanalysis.com/stocks/celh/ * StockTitan. (2026, August 4). Crinetics (Nasdaq: CRNX) agrees to $85 cash-per-share sale to Vertex [8-K material event]. StockTitan. https://www.stocktitan.net/sec-filings/CRNX/8-k-crinetics-pharmaceuticals-inc-reports-material-event-3bad8e8db9de.html * The Walt Disney Company. (2026, August 6). The Walt Disney Company and TikTok announce a first-of-its-kind global short-form content-sharing deal [Press release]. https://thewaltdisneycompany.com/news/tiktok-content-sharing-deal/ * TradingKey. (2026, August 5). AMD beat on revenue, profit, and guidance — So why did the stock drop 7%? TradingKey. https://www.tradingkey.com/analysis/stocks/us-stocks/262074451-amd-q2-2026-earnings-double-beat-stock-falls-tradingkey * Uber Technologies. (2026, August 4). Uber announces results for second quarter 2026 [Press release]. https://investor.uber.com/news-events/news/press-release-details/2026/Uber-Announces-Results-for-Second-Quarter-2026/default.aspx * Vertex Pharmaceuticals. (2026, August 3). Vertex reports second quarter 2026 financial results [Press release]. https://news.vrtx.com/news-releases/news-release-details/vertex-reports-second-quarter-2026-financial-results * Yahoo Finance. (2026, August 4). Vertex Pharmaceuticals Inc (VRTX) (Q2 2026) earnings call highlights: Revenue surges 12% . Yahoo Finance. https://finance.yahoo.com/healthcare/articles/vertex-pharmaceuticals-inc-vrtx-q2-050826035.html * Yahoo Finance. (2026, August 6). Celsius Q2 earnings call highlights . Yahoo Finance. https://finance.yahoo.com/markets/stocks/articles/celsius-q2-earnings-call-highlights-130400635.html * Yahoo Finance UK. (2026, August 6). Celsius Holdings Inc (CELH) (Q2 2026) earnings call highlights: Portfolio growth drives 11% . Yahoo Finance UK. https://uk.finance.yahoo.com/news/celsius-holdings-inc-celh-q2-190423226.html Note: reference 2 (AP News) is retained from the dryrun source pool and is not cited in the shipped script. All other entries map to at least one footnote in the canonical. Internal data Internal data is provided on a best efforts basis. Earnings slate Forward earnings dates are sourced from the W2632 earnings slate, pulled 2026-08-07. See 04. Publishing/shows/weekend-update/W2632/dryrun/earnings_slate.md. * DE - Deere & Company, 2026-08-20 (Thursday), consensus EPS 4.71, consensus revenue $10.8B * HD - Home Depot, 2026-08-18 (Tuesday), consensus EPS 4.73, consensus revenue $47.3B * HROW - Harrow Inc, 2026-08-10 (Monday), consensus EPS -0.23, consensus revenue $70.4M * LOW - Lowe’s, 2026-08-19 (Wednesday), consensus EPS 4.25, consensus revenue $26.2B * TGT - Target, 2026-08-19 (Wednesday), consensus EPS 2.30, consensus revenue $26.1B * VG - Venture Global, 2026-08-11 (Tuesday), consensus EPS 0.48, consensus revenue $4.7B * WMT - Walmart, 2026-08-20 (Thursday), consensus EPS 0.74, consensus revenue $186.8B This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com

August 5, 202628 min

900 Gigawatts, 90 Gigawatts of Grid

Hunt, Mike, and Jason walk the Cash Flow Memo through an oil tape driven by Hormuz headlines, a power grid that has started saying no to data centers, and the valuation question underneath the Tesla-SpaceX merger. The Cashflow Memo Key Takeaways * Oil is trading the Hormuz headline, not the fundamentals: Saudi Aramco earned $33B in Q2 because price more than offset shipped volume, and its CEO says ~2 mmbbl/d of Saudi supply covers customers with or without the Strait open. Hunt’s pattern holds (roughly $90 on missile strikes, high-$70s to $80 when calm, ~$20 of backwardation to the 12-month strip at ~$70-72), and he reads the market as pricing this better than the commentators do. * Natural gas is holding $3.50 on LNG alone (13 Bcf/d in 2024, 16 in 2025, 18+ this year, 20 next) with gas-for-power flat since 2025; the swing factor is data centers forcing on-site turbines, which would restore ~1.5 Bcf/d/yr of power demand and firm gas toward $4. Supply growth is 10 of the last 15 Bcf/d from Permian associated gas, so incremental supply keys off the oil price, not the gas price. * Siting, not chips, is now the binding constraint on the buildout: New York has a one-year hold, Virginia is saturated (Google will not propose more), and the Texas governor just ordered audits (effectively ~12 months) of 900 GW of proposals against ~90 GW of installed state capacity. Combined cycle cannot be built fast enough and turbines are sold out, so on-site generation is the only path. * SpaceX is the episode’s central valuation debate: hosts expect Tesla merged into SpaceX on a trailing-45-day price basis after the China operations are spun out, and treat the equity as a data center business that buys land-free siting. Jason underwrites just south of $90 (~8 GW next year at ~$35B/GW, 20 GW target, 15% IRR), Hunt anchors $50 at roughly half the current price, and Mike flags lockup expiries and launch or regulatory stumbles as the cheaper entry. Launch economics gate the space leg: $1,000/kg makes a gigawatt cost $31B to loft, $150/kg makes it $4.7B, and Starship has flown four times. * Healthcare AI expands capability rather than cutting cost, with one exception. Lilly’s Isomorphic Labs partnership is about a year old with nothing to show yet, and scientists at Lilly, Regeneron, and Pfizer will assault IT budgets for tokens rather than save money. UnitedHealth is the real cost-out: $1.5B of IT spend, one-third to make Optum Insight AI-first and two-thirds to insurance systems, with a pre-auth pilot cutting missing-information denials 68% and appeals nearly 90%. Energy IT departments (Exxon, midstream, EOG) get genuine savings, and the token spend routes through Amazon, Microsoft, and Google because no one gets fired for running a Chinese open-weight model on a hyperscaler. Show Notes [00:00] Intro & Cash Flow Memo Download the memo at telltales.us; 30 minutes on energy, technology, and healthcare cash flows. [00:27] Iran, Hormuz, and $90 Oil Saudi Aramco earned $33B in Q2 as price offset lost volume, and management says ~2 mmbbl/d covers customers either way. Oil runs to roughly $90 on strikes and back to the high-$70s when things calm, with ~$20 of backwardation to the 12-month strip. [03:19] Exhibit B: Gas, LNG, and Permian Supply Gas holds $3.50 on LNG growth from 13 Bcf/d in 2024 to 20 next year, while gas-for-power has been flat since 2025. Ten of the last 15 Bcf/d of supply growth is Permian associated gas, so supply follows the oil price. [05:01] The Grid Says No: New York, Texas, Virginia New York’s one-year hold, Virginia’s saturation, and the Texas governor’s audit letter against 900 GW of proposals versus ~90 GW of state capacity. Combined cycle is too slow and turbines are sold out, so on-site generation wins. [10:40] Tesla into SpaceX: What Is It Worth The hosts expect a trailing-45-day merger after a China spin-out, then split on price: Jason just south of $90 on 8 GW next year at ~$35B/GW and a 15% IRR, Hunt at $50, Mike waiting on lockups and launch risk. Launch cost decides the space leg at $31B versus $4.7B per gigawatt. [18:18] AI in Healthcare: Harrow, Lilly, UnitedHealth Harrow is a commercialization business where AI is not decisive. Lilly’s Isomorphic Labs tie-up is a year old with no results yet. UnitedHealth is spending $1.5B, with a pre-auth pilot cutting missing-information denials 68% and appeals nearly 90%. [22:53] Token Budgets at Pfizer and Regeneron Scientists will consume the IT budget rather than shrink it. Expect more candidates and fewer late failures, not cost savings. [24:20] Energy IT: Exxon, Midstream, EOG Upstream and midstream have run machine learning for years and get real cost savings here. EOG’s decade-old well-file system is the template. [26:12] Open Weights and Why the Hyperscalers Win Open-weight models cut token cost, but IT departments would rather buy from Amazon, Microsoft, and Google than defend a Chinese model to their board. That routes the savings through the hyperscalers. [28:06] Apple’s Siri Problem Apple still has no AI-enabled phone and a software team behind the eight ball. Ecosystem lock-in buys time; it does not buy stagnation. Subscribe for the weekly Cash Flow Memo walkthrough, download the memo at telltales.us, and join us next Wednesday. Cashtags $AAPL $AMZN $EOG $GOOGL $HROW $ILMN $KMI $LLY $MSFT $PFE $REGN $SPCX $TSLA $UNH $XOM This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. 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