Investment Review №332. The Bulls switched to big tech

Amazon

On October 30, 2025, Amazon.com, Inc. (AMZN) reported results for 3Q2025 that exceeded market expectations across all key metrics, showcasing impressive acceleration in the AWS cloud segment. Investors reacted enthusiastically, sending the stock up more than 11% the following day to a record high. The standout driver of the report was the sharp reacceleration in AWS growth, reaching levels not seen since 2022. The AWS contract portfolio totaled about $200 billion as of late October, and shortly after the earnings release, Amazon announced a $38 billion deal with OpenAI. The acceleration in growth was enabled by the launch of new computing capacity, including projects implemented under Project Rainier. The strong cloud performance was complemented by continued gains in e-commerce and high-margin advertising, both contributing meaningfully to operating profit. Management also announced a reduction of 14,000 employees, characterizing the move as part of a cultural transformation to operate as "the world’s largest startup".

Growth rates of Amazon's total revenue and AWS segment revenue, %

Sources: FactSet, Freedom Broker analysis

Alphabet, Meta Platforms, Microsoft, Amazon, Apple

Over the past weeks, most major tech companies released quarterly results that confirmed robust AI-driven demand but also renewed investor concerns over the return on massive capital investments. Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL) all beat expectations on revenue and EPS, though some offered mixed forward guidance. A common theme across all companies was a clear signal that CAPEX growth will accelerate in 2026. While none provided formal multi-year guidance, management rhetoric was quickly reflected in market expectations. As a result, the 2026 CAPEX consensus among the Big Tech group rose 10.7%, following a 17% increase during the previous earnings season. The 2027 CAPEX forecast has been revised up by another 15.6% over recent weeks. This management tone from major AI infrastructure players creates a positive backdrop for data-center component suppliers, notably Nvidia Corp. (NVDA), which is scheduled to report results on November 19 after the market close.

Big tech CAPEX estimates before and after reports, $ billion

Sources: FactSet, Freedom Broker analysis

Boeing

Boeing (BA) showed early signs of recovery. The 737-production rate increased to 42 aircraft per month, while operating cash flow turned positive at $1.1 billion. The Commercial Airplanes division continued to strengthen, despite lingering quality and FAA oversight issues. The Defense segment returned to profitability with a record backlog of $76 billion, and the Services segment continued to provide stable revenue support. The main source of uncertainty remains the 777X program, which has incurred $4.9 billion in charges and pushed the cash-flow breakeven point to 2028. Nonetheless, Boeing is gradually improving its liquidity position and expects to achieve cash neutrality by 2028, targeting $10 billion in long-term free cash flow. Freedom Broker maintains a “Buy” rating with a target price of $223.

Boeing Commercial Deliveries

Sources: FactSet, Freedom Broker analysis

Eli Lilly

Eli Lilly (LLY) delivered impressive third-quarter results, with revenue up 54% y/y to $17.6 billion, far exceeding the consensus estimate of $16.01 billion. Adjusted EPS reached $7.02, 18.6% above the $5.92 consensus. Growth was once again driven by the company’s flagship GLP-1 drugs — Mounjaro and Zepbound — which continued to gain market share, now at 57.9% in the U.S., and consolidated Eli Lilly’s leadership in the incretin analog market. For the first time, sales of these two products exceeded $10 billion in a single quarter. In light of these strong results, the company raised its full-year revenue and adjusted EPS guidance for 2025 for the second time this year. The quarter was not without challenges: pricing pressure in the U.S. increased due to Medicare Part D reforms and competitive dynamics among insurers, partially offsetting volume gains. Nevertheless, management remains optimistic about long-term growth prospects, supported by large-scale investments in manufacturing and the advancement of its R&D pipeline.

Sales of LLY's GLP-1 drugs, $ billion

Sources: FactSet, Freedom Broker analysis

NVIDIA

The Nvidia Corp. (NVDA) GTC 2025 Conference, held on October 27–29, once again demonstrated the company’s strategic importance to the global technology ecosystem. CEO Jensen Huang announced that Nvidia has visibility into $500 billion in cumulative revenue from sales of Blackwell and next-generation Rubin GPUs through the end of 2026 — a figure far above current market estimates. During the event, Nvidia announced several major strategic partnerships, including a $1 billion investment in Nokia to accelerate 6G network development, plans to deploy 100,000 autonomous vehicles with Uber by 2027, the construction of the world’s largest AI supercomputer for the U.S. Department of Energy, and a collaboration with Palantir to expand enterprise AI solutions. Among the new product announcements, the company introduced the Vera Rubin Superchip, a next-generation AI platform combining two Rubin GPUs with an 88-core Vera CPU, as well as NVQLink, an open architecture designed to enable integration of quantum processors with GPU-based supercomputers.

Market capitalization of NVIDIA Corp. (NVDA), $ billion

Sources: FactSet, Freedom Broker analysis