Tech's Q3 Earnings: More Like Q3 Illusions?
Alright, let's get this straight. Q3 earnings are in, and everyone's tripping over themselves to declare victory for tech. Valuation bumps all around! Alphabet's AI is gonna save the world! AMD's swimming in OpenAI cash! Give me a break.
Morningstar's analysts are patting themselves on the back for raising fair value estimates. SanDisk, Western Digital, AMD, Seagate... the list goes on. But here's the thing: "fair value" is about as real as the metaverse. It's a guess, dressed up in financial jargon. You can see a list of 10 Stocks with the Largest Fair Value Estimate Increases During Q3 Earnings at Morningstar.
SanDisk's fair value estimate went from $40 to $135. Quadrupled! And the analyst still thinks it's overvalued. So... what was the point of the "fair value" in the first place? Was it just a random number generator set to "bullish"?
Western Digital's getting a boost because AI needs storage. Okay, makes sense. But the analyst says, "if AI demand and pricing remain this strong past 2027, we could even see upside from here.” So, they're hedging their bets based on something that might happen three years from now? That's not analysis; that's fortune-telling with spreadsheets.
And AMD? They're supposedly raking in "tens of billions of dollars" from OpenAI. But the rollout doesn't even start until the second half of 2026. That's like counting chickens before the eggs are even laid. Or, more accurately, counting chickens before you've even bought the chickens.
Then there's Alphabet, the darling of the AI boom. Gemini this, TPU that. They’re growing, sure, but is it sustainable, or just another hype cycle fueled by investor FOMO?
"Alphabet’s execution on artificial intelligence… continues to drive results while refuting the AI-led disruption narrative," the analyst writes. Refuting the disruption narrative? That's rich, considering AI is literally disrupting everything. Maybe Alphabet's just disrupting slower than everyone else. S&P 500 rips 1.6% higher, Nasdaq posts best day since May as Alphabet reignites AI trade, according to CNBC.
And this Anthropic deal? "Worth tens of billions of dollars." Sounds impressive, right? But it's for AI accelerators that'll be coming online in 2026. That's like announcing a moon landing... in 2040.
Honestly, are we just supposed to blindly believe that every tech company is going to magically transform into an AI powerhouse overnight? Maybe I'm too cynical. Nah.
Even Reddit's getting in on the action, with a fair value bump to $200. Apparently, their ads are getting better, which is attracting more advertisers. Okay, fine. But let's be real: Reddit is still Reddit. It's a cesspool of misinformation, conspiracy theories, and cat memes. Polishing the ads doesn't change the fact that the product is still... well, you know.
Oh, and Cloudflare? Sales growth is accelerating, margins are expanding... but the stock is still overvalued. So, what are we even celebrating here? The fact that a company is doing well while simultaneously being a terrible investment? Makes perfect sense.
Speaking of terrible investments, I gotta vent. My neighbor keeps trying to get me into this crypto thing. Says it's the future. The future of what? Losing all my money? I told him I'd rather invest in Beanie Babies. Atleast you can cuddle them.
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