00:00:00 · John Coogan, Jared Allen, Jordi Hays
[00:00:00] S0: You're watching TBPN. Today is Thursday, 10/29/2026. We are live from the TBPN UltraDome, the temple of technology, the fortress of finance. The capital of capital. Oh, what? Oh, no. What what why why don't you... How do you sound weird today? Are you okay? What were you doing this weekend? What are you doing surfing a lot? Oh, I was surfing this weekend Yeah. Down in Malibu. Yeah. Having a good time down there. That's good. Yeah. What do [00:00:25] S1: you mean? [00:00:26] S0: You you... It seems like you're not...... Or something? Sharp. Yeah. Something's a little different. I don't know I don't know where where to place it, but let me tell you about ramp. I'll try and figure it out. Time is money saved by the way. We can use corporate cards, bill pay, accounting, and a whole lot more. I was playing on my racing sim last night, so maybe I'm a bit tired. Okay. Yeah. That must be it. That must be it. [00:00:48] S2: How's your phone doing?
00:00:48 · Jordi Hays, John Coogan, Jared Allen
[00:00:48] S2: How's your phone doing? [00:00:50] S0: With the phone? Oh, yeah. My phone, it's feeling pretty good. What the heck? Who... What the... Who's that? It looks like Tyler is wearing a perfect Jordi mask. Because look at Tyler today. He looks exactly like Jordi. This is crazy. I'm so confused by what's going on right now. No. Of course, of course, Tyler is wearing the the Jordi mask, which is extremely freaky. When I ran into him this morning, I thought... I didn't clock it as Jordi, actually, I I just thought it was a guest who was here to hang out or say hi, but, it is bizarre. You can't really move your mouth that much. Right? That's the... I can't really move my mouth. I can't breathe through my nose either. It's a bit hard. It's pretty uncomfortable to wear. But but do a little spin because the back is pretty solid. They nailed the hair. I think they got it pretty good back there. And I think the sunglasses do a lot of the work. If you take out the sunglasses, you'll give everyone a jump scare. Yeah. The eyes are... [00:01:45] S2: Oh. No. I gotta keep those on. [00:01:48] S0: Not good. You gotta keep the sunglasses up. But it's helpful because Jordi wears the sunglasses a lot on the show. So it works. I think we're gonna sub the real Jordi back in. But this is an A plus bit. I thoroughly enjoy this. [00:02:02] S2: Tyler, forgot your laptop. Keep it on. Keep it on. Keep it for the whole show. [00:02:11] S0: Cool? Do not do that. [00:02:12] S2: No. Keep it on [00:02:13] S1: for We the whole
00:02:13 · Jared Allen, John Coogan, Jordi Hays
[00:02:13] S1: for We the whole [00:02:15] S0: we we we've tested these masks before and they are so uncomfortable. It feels like you're suffocating. It's absolutely absolutely brutal. But it's a lot of fun. The chat's saying you got Botox over there. Anyway, let me tell you about Cisco. Critically interesting for the AI era. Unlock seamless real time experiences. A new value with Cisco. Chip wars going on. There's another spy. There was a spy at OpenAI. Now there's a spy tracking Jensen over at NVIDIA. The wars are are waging. Google earnings is today. We have Ice Cube joining. We got lots of stuff going on today. We start a little Google earnings recap, and then we'll go into the the NVIDIA story? What do think, Jordi? [00:02:59] S2: Yeah. Let's do
00:02:59 · John Coogan
[00:02:59] S0: it. Cool. So Google stock is cratering. It's down 12 and a half percent. Earnings miss, rare. And here are the results. So revenue. Consensus was 100 and 128,000,000,000, came in at a 127.6. Like, only a third of a percent miss down. But to the negative, you usually want to be beaten, these consensus estimates. Earnings per share, not nearly as good. 30% miss. They were expecting $3 a share, $30.01, came in at $2.12. And so there was a little bit of nuance there because some of the earnings miss was related to owning SpaceX stock, which traded down in the interval, and so they had to take a little bit of a write down on that. But even if you factor that out, so that was an 8,700,000,000 loss that they technically took on the equity investments. That reduced EPS by 55¢. And so even if you exclude that impact, EPS still would have been $2.67, still below the $3.01 that Wall Street was expecting. So you can you can factor out that nuance and still get to a place where something went slightly awry. There's a lot of good stuff happening, a lot other worries, and that's why the market is reacting the way it is. So the first key takeaway is that cloud is just a monster business. There was very interesting reporting years ago in 2018 that back in 2017, Larry Page had considered pulling the plug on Google Cloud. He was like, we're competing with AWS. There's two executives that were sort of fighting at the time. There's too much going on. Maybe we shouldn't even be in this business. Maybe we shouldn't even do cloud and have a cloud platform. Well, that it's a completely different world today because cloud is so important to the business. Revenue doubled to $30,700,000,000 Operating profit tripled to $11,100,000,000 Operating margin is at 36.2%. It's a fantastic business. If it were independent, it would be worth an incredible amount of money. Hundreds of billions, maybe a trillion dollars right there just in that value. And so, Google and Alphabet truly has become this diversified portfolio of bets. Search is just one of them. They got YouTube. They also have cloud, obviously. So, the cloud backlog now is $561,000,000,000 of companies, labs that have gone to them. We just saw this with OpenAI buying cloud and TPUs. There is a lot of demand for their services. And what's interesting is that you can look at that number $561,000,000,000 that's ton...
00:05:26 · John Coogan
Is that over ten years, you know, we saw in the Anthropic s one, some of these contracts go out, you know, till Years. 2033, 2036. But 55% of that cloud backlog is expected to be recognized as revenue within two years. So even though you have this big number, you're getting half of that 275,000,000,000, something like that, over the next two years, that's pretty quick for a business that did 30,700,000,000 in revenue. You're getting two fifty coming really fast. So that should be driving valuation upwards. Search advertising though, growth slowed. Last quarter was 17%. This quarter came in at 12%. AI is accelerating query volume, so they are seeing a ton of token production. You see that when Sundar steps on stage and shows the progress of their models, the diffusion of Gemini models. Query AI mode is actually taking share. People are using it in place of the default search, not really by their choice a lot. It just sort of pops up a lot of the times. But it monetizes less effectively than traditional searches right now. Now, what's interesting is that at the end of the day, it's a person asking a question and getting a bunch of pixels on a screen. And if you're on your phone, it's a vertical screen that's, you know, nine by 16. Right? Square for some. Square for some if you're on the Duo. You're Mark Garman. You're Mark Garman. But at the end of the day, as a as a... If you're Instagram, you want to monetize every pixel that you're showing the person while they're on Instagram. If you're Google, when someone asks a question, you want to monetize every pixel with ads and that's what has happened with Google Search over the past decade, right? There was a time when it used to be a very clear call out for one sponsored post at the top and now it's been, you scroll the whole first page and it's all ads. AI mode isn't that. AI mode might have some monetization going on, but it's not every single sentence is a sponsored ad just yet. They got to get there. They're not going to talk about that because that's rough and that's complicated. But it's going to be a hard road to figure out exactly how do we monetize the full response. Everything that we're showing to the viewer should have a lot of things, a lot of links and and and offers and brand messages that are monetizable, paid for, bidded auction style to really maximize every view that they get.
00:07:53 · John Coogan
And so that is the is the coming challenge, but, you know, they've been doing this for twenty plus years. And so that is the path that they're on. The last thing, Google is spending $200,000,000,000 on AI infrastructure this year. 2026 CapEx guidance, dollars 195 to $2.00 $5,000,000,000 right in that $200,000,000,000 range. They are also signaling that they will expect that they expect a significant increase in 2027. Q3 spending alone was 51.4. So they're already on their $200,000,000,000 run rate, and next quarter should be higher, following quarter should be higher, etcetera. So let's go. And then the last thing is that Gemini crossed a billion MAU, monthly active users. The first party AI model, the API is doing 32,000,000,000 tokens a minute. Hard to say what that means in the modern era because there's so many models that are more token efficient and really just getting stuff done, getting answers, satisfying users is what matters. But it's up 40% quarter on quarter. Clearly, they're serving more models. More people are using them. And then, of course, they announced Gemini four Carbon, the newest frontier model, the day or before earnings, two days before earnings, sort of trying to reassure investors that they are still on the frontier, that they're... That the benchmarks look good and that the adoption will come and more importantly that they are vertically integrated. So even if they don't show up on the ramp data and the open router data, just having the frontier model internally is super valuable because it will drive YouTube, it'll drive AI search, it'll drive internal workloads. All... There'll all be all these things where they aren't going outside for costs and they will be vertically integrated.