 | 29 Oct 2026 |
The Morning Brief | By Gregor Becker |
Editor-in-Chief (M.Phil Economics, Oxford) | Well, that stung. Investors will forgive a lot of spending, but apparently not $2.12 against $3.02. Alphabet fell about 10% after hours, wiping almost $400 billion off its value, even as Google Cloud revenue surged 103% to $30.7 billion. 💸 Also on the tape: • | SK hynix jumped 13.3% on record third-quarter revenue and an 80% operating margin, and Micron rose 5.9% in sympathy |
• | And ServiceNow has our analysts split after its 20.1% drop: Jordan sees pricing power in a 77.5% gross margin - Jess sees 107.2x trailing earnings and no room for error. Read the debate below ⬇️ |
Editor's note: Today we also look at Big Tech's AI trade, and our Cybersecurity Portfolio holds the software defending it. Anyone who held the S&P 500 since March 2024 made 56%; the portfolio made 86%, which is 30 points more. See every holding.
| | Market Snapshot Index | 24h Change | YTD | S&P 500 | +0.28% | +12.9% | Nasdaq | +0.27% | +14.3% | Dow Jones | +0.19% | +8.5% | | | DAX | +1.07% | +5.9% | FTSE 100 | +0.33% | +7.8% | Euro Stoxx 50 | +0.35% | +4.7% | Nikkei 225 | +1.10% | +24.7% | Hang Seng | -0.59% | -12.8% |
• | Our take: Memory was the story: SK Hynix's blowout quarter pulled chip names higher, and Vertiv's results fed the idea that the AI buildout is still accelerating. The mood soured overnight, though, as Alphabet's earnings reignited worries about how companies make money from AI, so Microsoft and Alphabet's spending comments are what to watch next. |
| | The Odds 🎲 | Together with |  |
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What prediction markets are betting on today. -1 pts since yesterday | 32% |
| | Top of the Morning Alphabet Doubles Its Cloud. Investors Look at the Bill. |  | Alphabet's cloud revenue doubles, but spending costs worry investors. | • | 💸 The price of a miss: The drop wiped almost $400 billion off Alphabet's market value. It is a lot of money to lose over a company growing this fast. |
Dive Deeper: Google Cloud revenue surged 103% to $30.7 billion, and the division's operating income rose to $11.1 billion from $3.6 billion a year earlier. Consolidated operating income rose 30% to $40.6 billion. • | 🧾 Where the money went: A net loss of $8.7 billion on equity securities cut net income by $6.7 billion after tax, or $0.55 per share. Capital spending reached $51.4 billion in the quarter, up from $24.0 billion a year ago, and free cash flow turned negative at $9.1 billion. The cloud business is growing quickly, and so is the cost of building it. |
Why it matters: Investors had hoped big tech earnings would show that the AI spending would pay off. Microsoft gained nearly 4% after hours on stronger Azure growth and better-than-expected cash flow. • | 🔜 Amazon is next: Its results are due later today. AWS growth will matter, but investors will care more about what Amazon says about AI spending and the returns on it. |
• | Our take: Alphabet showed that the spending is producing growth. It also showed that the spending is large, and that growth is no longer sufficient on its own. Year to date, capital spending is $132.0 billion. Investors are asking for the receipt, and a company that has doubled its cloud business can fairly be asked what it cost. |
| | ➡️ Easy-to-Follow Portfolio |  | • | The record: Tracked since March 2024, Cybersecurity Portfolio has returned 86%; the S&P 500 managed 56% over the same months, leaving the portfolio 30 points ahead. |
• | Nothing held back: Every holding published in full, with the price we paid and a live call on each name. |
• | Act when we act: Each week's buys and sells reach you the morning we make them, so you act on them rather than reading about them later. |
| | What’s up Yesterday's session, factoring in pre-market data 
| $SKHY +13.3% SK hynix Inc. |
| $MU +5.9% Micron Technology, Inc. |
| $ORCL +10.6% Oracle Corporation |
| $AMD +3.2% Advanced Micro Devices, Inc. |
| $SNDK +7.7% Sandisk Corporation Sandisk jumped 7.7% as memory chip stocks rose again, with Micron and SK Hynix also climbing after a particularly bad run, and it slips another 2.5% before the bell. |
| What’s down 
| $FTNT -5.9% Fortinet, Inc. |
| $BSX -5.8% Boston Scientific Corporation |
| | 🤝 Your First Month Free |  | • | Where it stands: Since March 2024 the record reads 86%, against 56% for the S&P 500: a lead of 30 percentage points. |
• | The offer: Enter code OXFORD26 at checkout and your first month of Cybersecurity Portfolio costs nothing. Cancel any time. |
| | Today's Debate → | After a 20% plunge on AI disruption fears for software seats, is ServiceNow ($NOW) now a buy for long-term investors? |
 | Jordan Bittencourt Bull 🐂 |
Yes. A 77.5% gross margin describes a franchise with real pricing power, and I would rather buy a 20% repricing of that than run from it. • | The valuation claim: ServiceNow ($NOW), a cloud workflow-automation specialist, grew revenue +20.9% in its latest year. A business compounding at that pace has earned a better multiple than a one-day panic over seat counts suggests. Panic is a fine mood, but a poor valuation model. |
• | The catalyst claim: Revenue came in at $4,107M against a $4,095M estimate. The AI outlook was raised too, alongside an uptick in multi-million-dollar AI deals. That is real demand, and I think it is the best answer to the seat-disruption fear. |
• | The risk claim: EPS of $1.00 missed the $1.02 estimate, and return on invested capital of 4.8% is thin. I would size the position carefully. But a two-cent miss is a thin reason for a record one-day drop. |
 | Jess Langley Bear 🐻 |
No, I would not buy ServiceNow ($NOW) after this plunge. A 107.2x trailing P/E still prices in flawless execution, and the EPS miss shows how little room is left. • | Valuation claim: The stock still trades at 52.3x EV/EBITDA after the drop. That is a price that assumes nothing goes wrong, and the market just showed it has very little patience for even a small slip. |
• | Jordan's best point: Jordan will point to the revenue beat, that figure against that figure expected, and the raised AI outlook in MarketWatch's report. Fair enough, but the beat is only +0.3%, which is close to a rounding error. EPS of that figuremissed that figureestimate by 2.0%. |
• | The risk: The balance sheet is clean, with net debt/EBITDA of 0.2x. But a clean balance sheet cannot rescue a stretched multiple. A 3.1% free cash flow yield is thin compensation if software seats keep getting questioned, so I would wait for evidence before buying. |
| | The Digest ✨ What investors like you are reading. As WSJ reports, the Fed chairman says higher rates are now reaching the AI-driven investment surge while growth broadens beyond it. Europe's benchmark gas contract hit €100 per megawatt hour for the first time since December 2022, Reuters reports. Middle East shipping disruptions are choking LNG supply, which raises energy costs for industry. Shell ($SHEL) will launch a $5 billion share buyback after soaring earnings, Morningstar reports. |
| | ➡️ Follow Our Trading Strategy |  | • | Against the index: Measured from March 2024, the portfolio is up 86% where the S&P 500 is up 56%, a lead of 30 percentage points. |
• | What arrives: The full Cybersecurity Portfolio every week, with the entry we paid and a live call on every name we hold. |
| | Situational Awareness US • | Nasdaq futures slide: Nasdaq futures dropped on Thursday as mixed earnings from Alphabet ($GOOGL) and Microsoft ($MSFT) left investors weighing the payoff from heavy AI spending. ( Reuters) |
• | Anthropic debt deal: Broadcom ($AVGO) CEO Hock Tan raced over the weekend to rescue a massive chip-financing arrangement for Anthropic, described as the largest AI debt deal of its kind. ( The Wall Street Journal) |
• | Wendy's going private: Wendy's ($WEN) has struggled to regain its footing. ( Business Insider) |
• | Tesla's Korean court win: A court victory in South Korea removed one legal headache from Elon Musk's autonomous-driving ambitions, even as Tesla ($TSLA) shares slipped on profitability worries. ( Invezz) |
• | Alphabet's worst day: Alphabet ($GOOGL) stock headed for its worst single-day decline in over six years as Waymo and other bets widened the third-quarter loss to over $2 billion. ( Benzinga) |
World • | Oil falls on diplomacy: Oil prices fell as traders weighed U.S.-Iran diplomacy. ( WSJ) |
• | DeepSeek trained on GPT-6: The Information reports that DeepSeek and Moonshot used OpenAI's GPT-6 Astra to train their latest models. ( Reuters) |
| | Today's Agenda (ET) | Japan: Consumer Confidence (Oct) est. 35.1%, prev 35.4% |
| Spain: Retail Sales MoM (Sep) est. 0.4%, prev 0.2% |
| Spain: Retail Sales YoY (Sep) est. -0.5%, prev -0.5% |
| Italy: Unemployment Rate (Sep) est. 6.2%, prev 6.3% |
| UK: BoE Interest Rate Decision prev 3.75% |
| US: GDP Growth Rate QoQ (Q3) est. 3.2%, prev 2.2% |
| US: GDP Price Index QoQ (Q3) est. 3.2%, prev 6.1% |
| US: Core PCE Price Index MoM (Sep) est. 0.3%, prev 0.2% |
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