Curious how others are adjusting their analysis of Alphabet, Microsoft, and the broader AI trade.

Ten foot pole?

Even assuming things go largely to plan, there are some troubling back of the envelope issues about the future profits. One cause of furrowed brows for me is that the useful lifetime of the equipment being purchased will be *very* short given how fast the system designs are evolving, meaning any realistic view of owner earnings will have to treat them with a very short amortization. Realistic amortization charges might exceed revenues for some players. Who wants a data centre built around systems that are a generation or two out of date, or aren't optimized for the right mix of functions?

The firms in question may not use realistic schedules when they file their statements, but that just delays the reckoning, it doesn't make it go away.

Jim