BIG TECH WEEKLY | Big-Techs' CapEx War, winner is Nvidia?

Big-Tech’s Performance

With the election approaching, and important events such as the jobs report and the interest rate meeting, the big tech-led market has also been at high levels and is not immune to more pullback pressure.Next week's election will determine the trend of some concept companies, the entire broad market volatility will not be small.

By the close of November 1, Big Tech as a whole retreated over the past week with $Apple(AAPL)$ -2.02%, $NVIDIA Corp(NVDA)$ -5.45%, $Microsoft(MSFT)$ -4.33%, $Amazon.com(AMZN)$ +0.01%, $Alphabet(GOOG)$ $Alphabet(GOOGL)$ +5.16%, $Meta Platforms, Inc.(META)$ -0.04% and $Tesla Motors(TSLA)$ -4.08%.

Big-Tech’s Key Strategy

Big Tech Bloodbath on AI, Capex a Potential Burden?

Big tech companies have ramped up their capital expenditures, even becoming a key factor in dominating investor sentiment, such as META's ultra-surprising "hemorrhage" in Q1.This quarter is no exception, although investors have become accustomed to continue to expand, but the pitfalls are already emerging - the damage to the profit side of the first embryonic.

Among them, Google/Microsoft/Amazon have been the big cloud services players with relatively high overall capex, with Meta following suit after investing in big models.

In terms of branching out

• AAPL looks relatively conservative, but also because it hasn't invested in big models and doesn't intend to, and may spend a lot of money on acquisitions in the future, or make long term collaborative "purchases";

• MSFT appears to be the most honest, with depreciation and amortization taking off in Q3, and profit growth already appearing to be failing to keep up with revenue.Meanwhile, if you include the portion of Capital Lease that doesn't account for CapEx, it's going to be a third higher than current value these quarters, reaching $20 billion in Q3;

• AMZN even adjusted its depreciation algorithm in the quarter (extending years), preserving Q3 margins for now, as AWS, which is No. 1 in terms of share of cloud services, has been spending a lot of capex since 2019 and the growth rate has returned in recent quarters'

• Meta and Google's capex is also up after 23 years, with Meta's capex as a percentage of revenue as well as total assets being relatively high among big tech companies due to its high asset quality.

At present, the next quarter as well as next year's capital expenditure has expressed the position of the big technology companies, the most aggressive to be counted in the MSFT and AMZN, although Google did not explicitly state, but certainly can not be in the "cloud three strong competition" in the loss.

At this rate of growth, at least $ Nvidia (NVDA) $ to the middle of next year.

Big-Tech Weekly Options Watcher

Coming up on November 5 the upcoming election, the biggest impact of Tesla, in the week of November 8, Call's extreme distribution of 280, 270 is also quite a lot, even if Trump won, which is also a considerable resistance level, rushing 300 I'm afraid that the difficulty is a little big; in addition, PUT in 240-250 position two is also relatively large, once the Trump failure, are likely to fall to thePUT profit level.

Less affected by the election instead is NVDA, as whoever is elected is unlikely to try to limit AI. Harris may be more supportive of tech companies explicitly, and Trump will find a way to keep more of tech's core interests on U.S. soil. the distribution of NVDA's November monthly options is just about even, and the overall Call/PUT ratio is high, with relatively optimistic sentiment.Combined with the fact that there was a big CALL of 180-190 in the mid to long term previously, many investors are also betting on another rally after Blackwell's results come out.

$Invesco QQQ(QQQ)$ $.IXIC(.IXIC)$ $ProShares UltraPro QQQ(TQQQ)$

Big-Tech Portfolio

The Magnificent Seven form a portfolio (the "TANMAMG" portfolio) that is equally weighted and reweighted quarterly.The backtesting results are far outperforming the $.SPX(.SPX)$ since 2015, with a total return of 2125.74%, while the $SPDR S&P 500 ETF Trust(SPY)$ has returned 228.50% over the same period, once again pulling ahead with an excess return of 1897.24%.

Big tech stocks underperformed this week, but year-to-date returns are still there to 40.70%, outpacing the SPY's 20.77%, with excess returns still at to 19.94%.

The portfolio's Sharpe Ratio over the past year has rebounded to 2.7, the SPY is 2.75 and the portfolio's Information Ratio is 1.47.