Key Takeaways Spotify is wisely focusing on long-term objectives over short-term profitability. Leverage will shift from labels (suppliers) to Spotify (the aggregator) as scale continues to grow.Read more

Key Takeaways Google’s dominance in search, and digital advertising industry growth will remain in tact. Cloud computing trends will support Google Cloud revenue growth Alphabet may implement AI slightly slower, but won’t fall behind Current estimates on costs per generative AI query are prohibitive to profitability Until processing power improves and makes generative AI cheaper, Google is unlikely to lose much market share.Read more

Key Takeaways Apple will dominate thanks to brand, installed user base, and ecosystem of products More revenue from Services will increase gross and net margins Apple Silicon is paving the way for it to gain market share in the PC space More parts being developed in-house should increase product margins Biggest risks are manufacturing challenges and reliance on emerging markets growth (India) Catalysts Apple’s Brand leads to sticky revenues and increasing installed device base Apple has become more than a tech hardware and software company, it has become a lifestyle product. It has embedded itself into the lives of billions of people around the world, many of whom say they couldn’t live without their iPhone.Read more

Key Takeaways Possible consolidation in the streaming market will benefit NFLX with better negotiating leverage Internal initiatives of ad-plans and paid sharing will drive user and revenue growth ARPM will increase due to future price increases and advertising revenue Advertising dollars will transition from Cable TV to NFLX as its ad-supported members base grows Discipline on content costs will increase net margins and push future earnings and cash flows higher Catalysts Industry Catalysts Consolidation Of Content In The Streaming Market After 25 years of expensive growth, Netflix has now become the most dominant, profitable streaming player in the world. With 238m subscribers, trailing 12 month revenues of $32bn and cash flows of $4.6bn (all as of June 30 2023), the company has reached scale economics that allow the streaming model to work profitably.Read more

Key Takeaways Amazon’s earnings power is much higher than its reported profits - driven by 3P sellers, Advertising and AWS More growth to come from best-in-class customer experience, cross-selling and industry growth trends Continued reinvestment will suppress short to medium-term cash flows and hide profitability Operating leverage will drive revenue growth higher than fixed cost growth, and operating margins will increase. That growth will come from Online retail (and 3P), Cloud computing and advertising revenues Catalysts Business Catalysts Refocusing On The Core Businesses And Opportunities Will Improve Profitability Andrew Jassy’s 2nd shareholder letter from the 2022 annual report outlined the fact that Amazon is choosing to refocus on the core businesses and opportunities that they have long term conviction in.Read more