GM. This is Milk Road Stocks, the newsletter that’s basically a pit crew for your portfolio.
We have 3 hyperscalers reporting this week, all preceded by a Fed decision that directly affects their ability to borrow and scale - buckle up!
First, a quick detour.
Milk Road’s audience doesn’t just follow markets. They obsess over them. 👉 Partner with Milk Road
3 THINGS TO WATCH THIS WEEK 👀
It's another busy week of earnings season, with a Fed decision landing right in the middle of it all.
Here’s what we’re watching this week:
1. The earnings cheat sheet.
The week ahead:
- Tuesday: Robinhood and Seagate report after the close.
- Wednesday: The Fed's rate decision at 2pm ET, then Microsoft and Alphabet after the close.
- Thursday: Amazon reports after the close.
The Fed hiked to 3.75-4% in September, and prediction markets give a hold ~93% odds - which is good, as two of the biggest AI spenders will open their books just hours after the announcement.
For the big three, cloud growth is the number to watch, since that's where all the data center spending is meant to pay off.
Last quarter, Google Cloud grew 82%, Azure grew 43% and AWS grew 37%. 👇
Source: Abc, Microsoft, Amazon
But a lot of that growth has to keep up with the bill. Alphabet's free cash flow (cash left after running the business and paying for data centers and chips) went negative in Q2.
With $242B of cash on hand, Alphabet can live with that.
(The companies one rung down? Not so much.)
2. The neocloud debt crunch.
Chamath called neoclouds "disorganized and poorly capitalized" on X.
Elon agreed, saying debt markets have "almost entirely shut off" for any company without big revenue outside AI data centers.
"That means the 200+ neoclouds are going to see guppy-level death and consolidation."
SpaceX just closed $40B of debt for GPUs, he added, because it has a strong credit rating thanks to the money earned from Starlink and its rocket launches.
CoreWeave, Nebius and IREN all fell more than 4% before the open today, on top of an already ugly October.
Source: 247wallst, coincentral
Vincent (our PRO analyst) blames funding costs.
Neoclouds borrow billions to build upfront, then lock customers into multi-year deals at mostly fixed prices - so when borrowing gets pricier, less cash is left to repay lenders.
He doesn't think Nebius or CoreWeave go bust, but he isn't buying either.
3. Meta's $35B raise.
On Oct 21, we asked whether Meta's ads could keep paying for its AI spending.
Its Q3 report showed the ads holding up (revenue +26%), but $34.9B of CapEx (spending on data centers and chips) outran $32.8B of cash from operations.
That left Meta with its first negative free cash flow in over a decade.
This morning, Meta launched a ~$35B stock sale:
- $22.5B of regular shares via forward sale agreements (Meta locks in the sale now, but collects the cash by November 2027).
- $12.5B of mandatory convertible preferred stock, which pays a dividend and turns into regular shares in 2029.
- Up to $60B more next year through new Class C shares, which carry no votes (so Zuckerberg keeps control).
Nvidia, AMD and Broadcom may also buy up to $5B of the shares between them.
(I.e. Meta's chip suppliers may help pay for Meta's chips.)
The catch is dilution (more shares = a smaller slice of future profits for each one).
But Meta now owes slightly more ($83.7B of debt) than it holds in cash ($82.4B), and selling stock instead of borrowing protects its credit rating right as lenders turn away from AI-heavy borrowers.
That puts a lot of weight on Wednesday night.
If cloud growth at Microsoft and Alphabet keeps pace with spending, the giants can keep paying their own way.
If it doesn't, Meta probably won't be the only one selling stock.
Btw - all four of our PRO analysts own Robinhood going into tomorrow's report (they’re all up ~22-34%).
To see what they do once the numbers drop, try Milk Road PRO for a buck for 7 days.
GET YOUR BRAND IN FRONT OF 500K+ INVESTORS
Milk Road’s audience doesn’t just follow markets. They obsess over them.
Every day, hundreds of thousands of investors come to Milk Road to discover new companies, understand new products, find new investment ideas, and stay ahead of what’s happening across crypto, stocks, AI and finance.
And they want to hear about what you’re building.
Milk Road gives brands a direct line to that audience across:
- 500K+ followers and subscribers
- 35M+ monthly content impressions
- 400K+ monthly podcast views and listens
- 187K unique monthly newsletter readers
- 4,200+ paying Milk Road PRO members
Whether you’re launching a new product, introducing your company to investors, or just want more people talking about your brand, we’ll help you get it in front of an audience that’s actually interested.
