On this episode:
United Parcel Service (UPS):
Financials: Beat on adjusted EPS and revenue, but consolidated revenue declined slightly Y/Y.
Key Action: Focused on profitability by strategically shedding low-margin volume, including a "planned glide down" of Amazon volume.
Outlook: International segment was strong; domestic performance reflects cost controls and deliberate mix management.
Caterpillar (CAT):
Financials: Strong beat on revenue (up 10% Y/Y) and adjusted EPS.
Key Driver: Booming demand in Energy & Transportation for power generation equipment—a direct connection to the massive build-out of AI data centers.
Outlook: Large and growing backlog suggests sustained momentum from infrastructure demand.
Alphabet (GOOGL):
Financials: Reported its first-ever $100 Billion revenue quarter, beating expectations. EPS also beat.
AI Engine: CEO cited a "full-stack approach to AI" as the core driver of growth across Search, Cloud, and YouTube.
Cloud: Google Cloud (GCP) revenue surged 34%, validating large AI investments.
CapEx: Expects higher Capital Expenditures (CapEx) going forward to meet AI/Cloud demand.
Amazon (AMZN):
Financials: Strong beats on revenue and EPS.
Cloud Comeback: Amazon Web Services (AWS) growth re-accelerated to over 20%, easing investor concerns and leading to a positive stock reaction.
Segments: Retail was solid; Advertising remains a high-growth pillar, enhanced by AI targeting.
Meta Platforms (META):
Financials: Excellent 26%+ revenue growth on strong ad performance. However, GAAP EPS missed due to a significant, one-time tax/legal charge.
The AI Cost: Management is aggressively increasing spending on AI infrastructure (CapEx) and hiring to build "personal superintelligence," which is weighing on near-term margins.
User Growth: Daily Active People (DAP) continued its strong growth trajectory.
The AI Arms Race: The biggest theme is the massive, multi-billion dollar CapEx cycle by Google, Amazon, and Meta, driving demand for specialized infrastructure (chips, data centers, power generation).
Cloud Competition: AWS's re-acceleration keeps the pressure on Google Cloud, making AI feature integration the primary competitive battleground.
Operational Discipline: In a mixed economic environment, companies like UPS are prioritizing margin preservation and quality of business over volume at any cost.
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