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Yahoo
17 minutes ago
- Yahoo
Microsoft Seeks Evergreen Access to OpenAI's AI Models
Microsoft (NASDAQ:MSFT) is in advanced talks to rewrite its OpenAI deal so it can keep tapping the startup's latest AI models even after the AGI mark. Under the current agreement, hitting AGI which OpenAI defines as machines outpacing humans on most economically valuable taskswould strip Microsoft of those rights come 2030. Warning! GuruFocus has detected 7 Warning Sign with MSFT. So far Microsoft has pumped in $13.75 billion and may walk away with a low? to mid?30% equity stake in a restructured, for?profit OpenAI. OpenAI, meanwhile, is pushing for a bigger slice of revenue and the freedom to serve clients outside Azureincluding government agencies that aren't on Microsoft's cloud. They're also insisting on strict safety standards as models edge toward true AGI. There's a business milestone too: once OpenAI hits about $100 billion in total investor profits, fresh IP clauses kick in and any disagreement over that trigger could wind up in court. Past IP waivers for OpenAI's $6.5 billion io deal and the stalled $2.4 billion Windsurf acquisition show just how high the stakes are. Locking in perpetual access to OpenAI tech is critical for Azure's edge and Microsoft's long?term AI will be watching for deal terms in the coming weeks and any updates at Microsoft's Ignite conference this autumn. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


Geek Wire
18 minutes ago
- Geek Wire
Microsoft plans record $30 billion in quarterly capital spending to meet surging AI demand
Microsoft plans to invest more than $30 billion in capital expenditures in the upcoming quarter — a new high — as it races to expand its cloud and AI infrastructure. Amy Hood, the company's chief financial officer, disclosed the figure on Microsoft's earnings call after the company reported stronger-than-expected results for its fiscal fourth quarter, including $76.4 billion in revenue, up 18% from a year earlier, and earnings of $3.65 per share, a 24% increase. The company reported $24.2 billion in capital spending for the recently completed quarter. More than half of that was directed toward long-lived assets expected to support monetization for 15 years or more, Hood said, while the remainder focused on servers — both CPUs and GPUs — to support growing AI workloads. Hood said the company is making the investments based on 'continued strong demand signals' for AI from Microsoft's customers. Keeping up with Amazon and Google Microsoft continues provide significant computing capacity to OpenAI for training and running the models that power OpenAI and other applications. The Redmond company is racing against cloud rivals Amazon and Google in building capacity to train and run AI models for a wide range of consumer and business applications. Google's capital spending for the second quarter of 2025 was $22.4 billion, according to numbers released as part of its earnings report last week. Amazon could see as much as $111 billion in capital expenditures this year, with the majority going toward technology and infrastructure, according to Morgan Stanley estimates. AI boosts cloud demand In a new disclosure, Microsoft said revenue from its Azure cloud platform surpassed $75 billion for the fiscal year, up 34% from the prior year — driven not only by AI demand but by 'growth across all workloads,' according to a statement from Microsoft CEO Satya Nadella in the company's earnings release. Later, speaking on Microsoft's earnings call, Nadella said the company's Copilot applications have surpassed 100 million monthly active users across commercial and consumer offerings. By comparison, Google last week said its Gemini app now has more than 450 million monthly active users, which reflects the search giant's larger reach on Chrome and Android devices. Overall, Microsoft now has more than 800 million monthly active users of AI-powered features across its products, Nadella said on the call. Capital spending and job cuts The record-setting capital investments coincide with significant workforce reductions at the company, totaling more than 15,000 cuts since May. In a recent press conference and interview with GeekWire, Microsoft President Brad Smith said that internal AI-driven efficiency gains were 'not a predominant factor' in the company's layoffs. However, he noted that rising capital expenditures have created pressure to reduce operating costs, which consist largely of employee headcount. In a memo to employees last week, Nadella acknowledged the 'uncertainty and seeming incongruence' of thriving financially while undergoing major layoffs. 'This is the enigma of success in an industry that has no franchise value,' he wrote. 'Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding. But it's also a new opportunity for us to shape, lead through, and have greater impact than ever before.'
Yahoo
38 minutes ago
- Yahoo
Why Unusual Options Activity for Builders FirstSource (BLDR) May Point to an Earnings Surprise
With the housing market in a rough patch due to elevated prices and borrowing costs, it's no surprise that Builders FirstSource (BLDR) — the largest U.S. supplier of building products for new residential construction — has struggled. Since the start of the year, BLDR stock is down more than 5% while the benchmark S&P 500 index is up almost 7% during the same frame. It's also worth pointing out that in the past 52 weeks, the security has given up more than 19% of market value. Frankly, it's not a great look for Builders FirstSource, which is scheduled to release its earnings results this Thursday before the opening bell. However, bold and adventurous speculators interested in a contrarian idea may want to keep their eyes on BLDR stock. More News from Barchart $200 AMD Price Target? Try These 2 Option Trades Before the Market Moves Option Volatility And Earnings Report For July 28 – Aug 1 Should You Grab This 'Strong Buy' Semiconductor Stock Ahead of Earnings? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! First, Builders FirstSource represented one of the highlights of Barchart's Unusual Stock Options Volume screener. This nifty readout provides platform users with the top 500 securities that have incurred aberrant activity in the derivatives market relative to normal trends. Potentially, this screener can clue us in on what the smart money may be doing with its funds. On Monday, total options volume for BLDR stock hit 6,231 contracts, representing a nearly 85% lift over the trailing one-month average. Further, call volume reached 3,127 contracts while put volume was 3,104 contracts. This pairing yielded a relatively even put/call ratio of 0.993. Nevertheless, Barchart's options flow screener — which focuses exclusively on big block transactions likely placed by institutional investors — added a bit more nuance. As it turned out, net trade sentiment yesterday landed at $55,100 above parity, thus favoring the bulls. The biggest transaction by dollar volume was $210,000 worth of sold puts expiring Sep. 19, 2025. As a credit-based transaction (due to the sale of options), we can reasonably presume that the sellers don't expect BDLR stock to fall materially below the underlying option's strike price (which was $140). That's not definitive proof that Builders FirstSource will post an earnings surprise. However, it does seem that the smart money is confident that the company can deliver the goods. Statistical Case Adds a Tempting Note to BLDR Stock While deciphering unusual options activity can provide an edge, it's difficult to know for sure how the market will ultimately respond. When it comes to unusual derivatives, the fact is that investors sold $140 puts expiring in September, with a bid price of $10.60. Based on intrinsic value only, it's imperative for the put sellers that BLDR stock not drop below $129.40. However, if we're actively speculating on Builders FirstSource, the above tidbit doesn't really tell us a whole lot about how we should structure our trade. This is where we need to think in a different framework. Here, it's helpful to consider market demand as a sentiment voting record. Just about the only objective fact that we know is that, in the past 10 weeks, the market has voted to buy BLDR stock six times and sell four times. During this period, BLDR enjoyed an upward trajectory. For brevity, we can abbreviate this sequence as 6-4-U. Now, at first glance, it may seem ridiculous to compress BLDR's price magnitude into a simple binary code. But what we have done here is to categorize the stock's behavior as a discrete state. Moving forward, we can compare this state against others to determine if we have an asymmetric edge. Conducting this exercise across rolling 10-week intervals (using data from January 2019 onward) gives us the following demand profile: L10 Category Sample Size Up Probability Baseline Probability Median Return if Up 2-8-D 8 50.00% 53.06% 11.15% 3-7-D 35 51.43% 53.06% 4.40% 3-7-U 10 50.00% 53.06% 9.23% 4-6-D 27 40.74% 53.06% 6.95% 4-6-U 25 48.00% 53.06% 5.29% 5-5-D 7 28.57% 53.06% 5.35% 5-5-U 45 48.89% 53.06% 4.14% 6-4-D 14 71.43% 53.06% 5.19% 6-4-U 63 63.49% 53.06% 3.88% 7-3-D 8 87.50% 53.06% 3.49% 7-3-U 57 50.88% 53.06% 4.75% 8-2-D 5 60.00% 53.06% 3.85% 8-2-U 6 0.00% 53.06% N/A As you can see, the chance that a long position in BLDR stock may rise on any given week is 53.06%. This is essentially the null hypothesis, the expectation of upside assuming no mispricing and no asymmetric edge. However, my alternative hypothesis is that because the 6-4-U sequence is flashing, we have a 63.49% chance of upside, not 53.06%. Assuming the positive pathway, the median return stands at 3.88%. That would put BDLR stock really close to the $141 level. But because we're talking about an earnings report, a positive surprise could potentially swing the share price to $145, maybe even higher. Putting It All Together Based on the market intelligence above, aggressive speculators may consider the 140/145 bull call spread expiring Aug. 15. This transaction involves buying the $140 call and simultaneously selling the $145 call, for a net debit paid of $190 (the most that can be lost in the trade). Should BLDR stock rise through the short strike price ($145) at expiration, the maximum reward is $310, a payout of over 163%. Admittedly, this trade is risky because the median expected performance from the 6-4-U sequence falls short of the $145 target. That said, a positive showing for the upcoming earnings could help deliver a stronger-than-average return. As for the sequence itself, running a one-tailed binomial test reveals a p-value of 0.0783. This means that there is a 7.83% chance that the implications of the sequence could materialize randomly as opposed to 'intentionally.' While this is a tad bit removed from the 5% threshold of statistical significance, I would make the argument that the stock market's open, entropic system allows for some wiggle room. In other words, there appears to be something empirically intriguing about the 6-4-U. Combined with the unusual options activity and the upcoming earnings, BLDR stock deserves to be on your radar. On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on