Hi All,
Welcome to our brief overview of portfolio news from the past few days.
The Efficiency Drive: Layoffs & “AI-Driven” Shifts
Big tech continues to trim headcount, signaling a structural shift towards leaner operations, often quietly powered by AI.
Amazon is reportedly planning a second phase of corporate layoffs, potentially affecting 30,000 employees. While CEO Andy Jassy frames this as a cultural shift for agility, Deepwater Asset Management's managing partner Gene Munster suggest AI is the quiet driver behind smaller teams.
Autodesk is cutting 7% of its workforce (~1,000 jobs) as part of a restructuring plan, incurring up to $160M in charges.
We are seeing a ‘saving on Opex to spend on Capex’ trend. Companies are cutting operational costs to fund the massive infrastructure required for AI. For the broader economy, however, this signals potential headwinds as unemployment risks rise, a concern echoed by Anthropic’s CEO, who warned unemployment could reach 10% due to AI’s impact.
PayPal’s Future: Agents & Taxes
PayPal is aggressively expanding its ecosystem beyond simple payments.
Agentic Commerce: PayPal agreed to acquire Cymbio, a platform to help merchants become discoverable on AI platforms. This supports their “Store Sync” agentic commerce service and the transaction is expected to close in H1 2026. That’s another move that positions PayPal for a future where AI agents do the shopping.
Tax Season Utility: A new partnership with April allows PayPal Debit cardholders to file taxes for free (saving ~$160). This adds stickiness to the ecosystem.
Tomorrow, we will publish our detailed PayPal Valuation Update, including a downloadable model for premium members to run their own scenarios to see how value can change.
Google: Gemini Rising
Alphabet is seeing tangible momentum with its AI models.
Gemini’s share of generative AI traffic has surged from 5.3% a year ago to 22.0% today, firmly establishing itself as the clear runner-up to ChatGPT (whose share dropped from 86.6% to 64.6%).
Source: Similarweb
Developer Demand: API requests for Gemini exploded from 35 billion in March to 85 billion in August, a bullish signal for Google Cloud revenue ahead of earnings.
Waymo: The autonomous unit launched fully driverless ride-hailing in Miami, with 10,000 residents already signed up.
Other Key Updates
Intel shares sank 17% after a disappointing outlook and supply disruptions. While they are optimistic about their external foundry efforts with its 14A process, meaningful volume production and thus revenue isn’t expected until late 2028.
Fortinet: Up 5% after an upgrade to ‘Buy’ by TD Cowen ($100 target), citing steady business demand heading into fiscal 2026.
Allegion: Schlage was named the “Most Trusted Door Lock” brand for the 7th consecutive year, with a high Net Trust Quotient of 117.0. A boring but beautiful reminder of their brand moat.
Macro: Markets rebounded after Trump announced a framework deal regarding Greenland, suspending the tariffs that were set for Feb 1.
That’s a wrap. See you soon.