Dan Niles Calls Meta a Re-Rating Candidate as AI Products Test Capex Payoff

BNP Paribas sees higher Azure pricing and a possible SpaceX cloud-computing deal as future catalysts that could extend Microsoft's cloud growth. Analyst Stefan Slowinski said Microsoft executives acknowledged Azure pricing is moving higher, but existing contracts will not be rewritten, so the benefit will reset only upon renewal and feather into results gradually rather than create a material step-up in near-term Azure growth. Microsoft has said Azure's recent acceleration into the mid-40% growth range was not driven materially by pricing, with fleet-level efficiency improvements and continued capacity additions the main contributors. Slowinski maintains a Buy rating and $549 price target on Microsoft, and said he would not be surprised by a potential future announcement involving SpaceX, which recently disclosed a new compute customer expected to spend roughly $1 billion per month starting in December. Microsoft declined to confirm any relationship, and also said OpenAI revenue sharing is not currently driving Azure's outperformance.

OpenAI, Anthropic and SpaceX have reached a combined valuation of roughly $5.2 trillion, eclipsing the $4.1 trillion first-day value generated by 3,365 U.S. technology IPOs between 1980 and 2025. That $5.2 trillion total includes approximately $2 trillion for SpaceX, $2 trillion for Anthropic and $1.2 trillion for OpenAI, with OpenAI and Anthropic alone accounting for about $3.2 trillion, or roughly 62% of the three-company total, despite neither having reached public markets. SpaceX priced its June IPO at $135 per share, initially valuing it around $1.75 trillion, then opened at $150 and finished its first session at $160.95, pushing its market capitalization to roughly $2.1 trillion after raising about $75 billion. The stock later reached an intraday record of $225.64 before retreating sharply, closing Monday at $151.85, about 5.7% below its first-day close and nearly 33% below its record high. OpenAI has pushed back its IPO timetable and is not expected to list in 2026, while Anthropic has reportedly been considering a November offering at a valuation as high as $2 trillion, although timing and terms could still change.

NVIDIA expects roughly a quarter of its fiscal 2028 business to come from AI labs it will back with its own balance sheet, a concentration management acknowledged some will call circular financing. NVIDIA has already invested nearly $50 billion in frontier AI labs, and for one more lab it will provide credit support for nearly 2 gigawatts of computing capacity, while guaranteeing minimum revenue on part of some cloud partners' facility capacity. Business Insider reported that NVIDIA's overall equity portfolio has reached $99 billion, up from roughly $7 billion in summer 2025, a 14-fold increase. Days of sales outstanding rose to 60 days, which management attributed to extended payment terms for large purchases by certain investment-grade customers shipped over multiple quarters. OpenAI's existing and planned commitments represent about 12 gigawatts of NVIDIA computing, with deployments committed through 2030, and NVIDIA's next update comes at its fiscal Q3 2027 earnings call on November 17.