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GOOG, MSFT, AMZN, NVDA – INVESTING RISK AND REWARD!!!

Value Investing with Sven Carlin, Ph.D.•Aug 3, 2026

Summary

Sven warns that the massive growth reported by tech giants like Google, Microsoft, and Amazon is deceptive because it relies on "circular financing." Sven explains that hyperscalers invest in AI startups like Anthropic or OpenAI, which then use that same capital to buy cloud services or chips from the investors, creating an artificial revenue loop. Sven emphasizes that the capital expenditure (capex) required to sustain this AI race is unprecedented and will lead to massive depreciation costs in the coming years. Sven further highlights the risk of hidden liabilities, estimating that major hyperscalers have up to $1.65 trillion in off-balance sheet debt through special purpose vehicles and leases. Sven concludes that current valuations are priced for a "perfect" scenario that is historically unlikely to materialize, suggesting that the AI boom resembles the dot-com bubble.

Google (GOOGL): Sven points out that 40% of Google's cloud business is driven by Anthropic, which is funded by Google itself. Sven argues this circular nature makes the growth unsustainable and creates a risky feedback loop. Sven notes that Google must reach nearly $400 billion in net profit within five years to justify its current valuation, which Sven deems nearly impossible.
Microsoft (MSFT): Sven highlights Microsoft's staggering $50 billion investment in a single quarter, much of which is tied to the OpenAI partnership. Sven warns that the useful life of AI hardware is short, leading to potential depreciation costs of $60 billion per year that are currently underreported. Sven compares the current situation to the post-dotcom era, where Sven recalls the stock provided zero returns for 15 years.
Nvidia (NVDA): Sven describes Nvidia's growth as incredible but warns that it is currently being sustained by financing its own customers to buy its chips. Sven argues this circular tech bubble means the current demand level is not a true reflection of sustainable profitability. Sven believes the market is ignoring the fact that these recognized revenues will face massive costs and competition in the long run.
Meta (META): Sven notes that Meta's costs are growing at 55% while revenue only grew 28%, leading to shrinking operating margins. Sven critiques Mark Zuckerberg's massive spending plan of up to $145 billion, which Sven believes lacks a clear path to direct profitability compared to other hyperscalers. Sven also mentions Meta's reliance on off-balance sheet funding with BlackRock to hide the true scale of its investments.
Amazon (AMZN): Sven observes that Amazon's cash flow has turned negative because the company is investing upwards of $170 billion to $220 billion in capex. Sven states that while operating income appears to be booming, the massive investments in companies like Anthropic are high-risk bets. Sven argues that Amazon is forced to overspend simply to keep up with competitors like Microsoft and Meta.
Apple (AAPL): Sven identifies Apple as an outlier because Sven sees that Apple is not participating in the aggressive AI capex race, maintaining a capital-light model with only $14 billion in spending. However, Sven still considers the stock expensive at a P/E ratio of 47 and previously noted it was overvalued at $280. Sven suggests that while the market is punishing Apple for its lack of AI spending, Sven believes Apple avoids the circular financing risks plaguing its peers.

Mentioned Stocks

AMZN
Sentiment: SELL

Reasoning: Sven explains that Amazon's aggressive pursuit of AI capabilities has pushed the company's cash flow into negative territory over the last twelve months. Sven notes that Amazon is spending over $170 billion on capex simply to keep pace with its technological rivals. Sven argues that relying on unprofitable startups like Anthropic for cloud growth makes Amazon's current strategy a high-stakes and potentially dangerous gamble.

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META
Sentiment: SELL

Reasoning: Sven points out that Meta's operating expenses are growing nearly twice as fast as its revenue, leading to compressed margins and lower income from operations. Sven criticizes the lack of a clear return on investment for the massive infrastructure spending Sven believes Mark Zuckerberg is pursuing. Sven also notes that Meta is utilizing off-balance sheet debt structures to obscure the true scale of its financial liabilities.

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NVDA
Sentiment: SELL

Reasoning: Sven claims that Nvidia's massive revenue growth is being artificially supported by financing its own customers to buy its products. Sven warns that this creates a circular tech bubble reminiscent of the dot-com era. Sven believes that the current demand level is not sustainable and that future depreciation and competition will eventually erode the company's profitability.

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MSFT
Sentiment: SELL

Reasoning: Sven highlights Microsoft's massive capital expenditure, noting that Sven believes the company invested an unsustainable $50 billion in a single quarter. Sven warns that the short useful life of AI hardware will lead to enormous underreported depreciation costs in the near future. Sven compares the current situation to the early 2010s when Microsoft's stock remained flat for fifteen years following a valuation bubble.

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GOOGL
Sentiment: SELL

Reasoning: Sven argues that a significant portion of Google's cloud growth is derived from circular financing with Anthropic. Sven states that the company's valuation requires reaching nearly $400 billion in net profit in five years, which is statistically unlikely. Sven warns that the current AI-driven momentum masks underlying risks and unsustainable capital commitments in the business model.

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AAPL
Sentiment: SELL

Reasoning: Sven notes that Apple is avoiding the aggressive AI capital expenditure race, maintaining a capital-light business model with only $14 billion in spending. However, Sven argues that although Apple is safer from circular financing risks, the stock remains expensive at a P/E ratio of 47. Sven mentions that Sven previously considered Apple overvalued at $280 and maintains a cautious stance at current prices around $340.

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