The $200bn capex number is absolutely wild. AWS reaccelerating to 24% growth is bullish but margins taking a hit in Q1 makes sense given that investment load. Im curious how long it takes for that capex to translate into actual cash flow - feels like were in for a multi-year payoff timeline here.
I think we need to separate out LEO from AI investments. The call insight report I just loaded up has plenty of clues indicating that the AI investments (bulk of capex) are actually monetizing immediately and are margin accretive. This maps Google's trend as well but is very different to Meta and Microsoft. I think we are seeing here the benefit of proprietary silicon.
On LEO, there will definitely be a multiple year path to material cashflows as it has to deploy the constellation and ground infrastructure ahead of commercial launch and residential sales.
The $200bn capex number is absolutely wild. AWS reaccelerating to 24% growth is bullish but margins taking a hit in Q1 makes sense given that investment load. Im curious how long it takes for that capex to translate into actual cash flow - feels like were in for a multi-year payoff timeline here.
I think we need to separate out LEO from AI investments. The call insight report I just loaded up has plenty of clues indicating that the AI investments (bulk of capex) are actually monetizing immediately and are margin accretive. This maps Google's trend as well but is very different to Meta and Microsoft. I think we are seeing here the benefit of proprietary silicon.
On LEO, there will definitely be a multiple year path to material cashflows as it has to deploy the constellation and ground infrastructure ahead of commercial launch and residential sales.