Anthropic recently disclosed its financial data ahead of its IPO. Revenue for the first half of 2026 skyrocketed 14x to $16.3 billion.
Right now, many people feel that the AI hype won’t pay off, and so on. I found an interesting piece on the topic.
🟢 How do AI companies make money despite falling prices?
Neural networks will soon become unprofitable, and all is lost, because competition forces prices down for users, while the cost of renting computing power only keeps rising.
However, people forget about efficiency gains.
👉 Example: A company sells 1 million generated words for $5, renting a server for $2 an hour. The margin is 60%.
Due to competition, the company lowers its price to users to $3, and the server cost rises to $3 (as hardware gets more expensive overall). Sounds like a disaster. But new technologies allow that same server to generate 3 million words in that exact same hour! Unit costs drop, and the company's margin actually climbs to 67%.
AI will definitely win and reshape the economy. But some of those currently building the infrastructure could end up in the red.
Right now, there are no problems, everything is soaring and going great. Profits are up, revenue is flowing. So don't expect a crash anytime soon ✊
Right now, many people feel that the AI hype won’t pay off, and so on. I found an interesting piece on the topic.
Neural networks will soon become unprofitable, and all is lost, because competition forces prices down for users, while the cost of renting computing power only keeps rising.
However, people forget about efficiency gains.
👉 Example: A company sells 1 million generated words for $5, renting a server for $2 an hour. The margin is 60%.
Due to competition, the company lowers its price to users to $3, and the server cost rises to $3 (as hardware gets more expensive overall). Sounds like a disaster. But new technologies allow that same server to generate 3 million words in that exact same hour! Unit costs drop, and the company's margin actually climbs to 67%.
Price cuts attract massive crowds of new clients, and Anthropic proves this: when they lowered rates for the new version of Claude, the user base multiplied several times over while margins remained untouched.
🔴 The Infrastructure Trap (The Main Risk)
The paradox is that this super-efficiency could bankrupt investors who are currently fanatically building data centers. Anthropic itself has signed rigid infrastructure leasing commitments totaling $637 billion.
If algorithms and chips improve faster than real demand grows, the world simply won't need that much hardware. Massive new data centers will sit idle, and rental prices for them will plummet.
AI will definitely win and reshape the economy. But some of those currently building the infrastructure could end up in the red.
Right now, there are no problems, everything is soaring and going great. Profits are up, revenue is flowing. So don't expect a crash anytime soon ✊
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If someone told me they were holding Boeing stock, my immediate reaction would be: "Sell at break-even, and that’s it for the company."
Let's briefly break down why Boeing is a bad investment choice right now.
What's wrong with Boeing?
Even if you don't know how to analyze financial reports at all, it's enough to open a summary on GuruFocus: everything there is either yellow or red. The company’s financial health is extremely weak.
Looking at the cold facts:
The only objective plus for Boeing is its economic moat, thanks to a huge accumulated backlog of orders. However, it doesn't outweigh the current fundamental problems.
🚫 Boeing is currently unsuitable:
• As a portfolio foundation — due to off-the-charts debt risk and operational inefficiency.
• As a growth stock or targeted aggressive idea — unless you have some specific insider info. I don't 😉
Buy only good companies. Good luck to everyone!
Let's briefly break down why Boeing is a bad investment choice right now.
It’s easy to understand why people buy shares of Boeing and other world-renowned giants whose services we use regularly. Since the company is top-tier and a household name, investing in it feels as safe as possible. But this is a misconception. You need to turn off your emotions and approach analysis with a completely cold calculation.
Psychologically, it's much easier for us to own a familiar name like Boeing with its commercial aviation than something like Palantir, a company that makes money off military software. But a business must be evaluated based on the facts.
What's wrong with Boeing?
Even if you don't know how to analyze financial reports at all, it's enough to open a summary on GuruFocus: everything there is either yellow or red. The company’s financial health is extremely weak.
Looking at the cold facts:
• Cash flows: Free cash flow (FCF) remains negative—operating cash flow simply doesn't cover capital expenditures.
• Debt burden: The debt-to-equity ratio is critically high. This is a clear red flag—the company is under severe stress.
• Profitability: Gross margin has plummeted from 19% to below 5% (a very weak result compared to the industry). Operating margin has even plunged deep into the negative (-5.42%).
• Capital efficiency: Return on capital metrics (ROIC vs. WACC) are extremely poor.
Multiples are unjustifiably high: A P/E ratio of 84 is one of the worst metrics in the sector.
It's also worth emphasizing that the company has never really recovered from the COVID-era crisis.
The only objective plus for Boeing is its economic moat, thanks to a huge accumulated backlog of orders. However, it doesn't outweigh the current fundamental problems.
🚫 Boeing is currently unsuitable:
• As a portfolio foundation — due to off-the-charts debt risk and operational inefficiency.
• As a growth stock or targeted aggressive idea — unless you have some specific insider info. I don't 😉
Buy only good companies. Good luck to everyone!