How large are the numbers?/What's bitcoin more correlated with?/WARN/TIC data/The consumer

I’m going to start with a reprint of the numbers I put together last month after the big hyperscalers released earnings that show the level of CapEx relative to revenue (not cash flow which would be even higher) to just highlight why investors are asking tougher questions, as they should. These are no longer asset light businesses as we now clearly know.

Oracle expected CapEx $35 billion in fiscal yr 5/26 vs expected revenues of $67 billion and a ratio that equals 52%. It was 10% in 2022.

Microsoft expected CapEx $88 billion in fiscal yr 6/26 vs expected revenues of $323 billion and a ratio that equals 27%. It was 12% in 2022.

Meta expected CapEx $69 billion in fiscal yr 12/25 vs expected revenues of $196 billion and a ratio that equals 35%. It was 16% in 2021 (as they ramped up spend in 2^nd half of 2022).

Google/Alphabet expected CapEx $85 billion in fiscal yr 12/25 vs expected revenue of $336 billion and a ratio that equals 25%. It was 10% in 2021 (also ramped up spend in back half of 2022).

With respect to Bitcoin and the message its action might be sending, this was a great chart from my friend Cameron Dawson in her super helpful weekly chart fest that reflects the real relationship that Bitcoin has and it’s not yet with gold.

From the Cleveland Fed, WARN (Worker Adjustment and Retraining Notification) notices continue to rise and were up almost 11k in October to 39,000, the highest since May and the 2^nd highest since October 2020. Prior to 2020 this level was last seen in 2008 and 2009. This reflects activity in 21 states and where employers need to provide written warnings two months before large layoffs and/or there are closings of plants.