Hyperscaler Results, Berkshire's Cash Pile and Fuel Pain

Episode Summary

The hyperscalers just published numbers that almost don’t seem real. Microsoft, Amazon and Alphabet hold a combined $1.46 trillion in remaining performance obligations, with $112 billion of capex spent in Q1 alone. Simon walks through where that money is going, why copper is the quietly compounding AI trade, and why Berkshire Hathaway’s $380 billion cash pile is now an obvious drag on the share price. Closer to home, tomorrow’s fuel price hike and Brent back at $114 keep consumer stocks under pressure.

Sponsored by Standard Bank Global Markets Retail & Shyft

What We Cover 🗂️

🏛️ Powell stays through the May FOMC, Fed chair confirmation update
🔌 Why copper is the quiet AI trade — and the JSE plays that benefit
☁️ Hyperscaler RPOs: Microsoft $627bn, Alphabet $468bn, AWS $364bn
💰 Berkshire Hathaway: $380bn in cash is roughly 38% of market cap
🤖 Using AI to write institutional-grade research (CMH initiation + earnings update)
💾 Samsung, SK Hynix, Micron — choosing pricing power over capacity
⛽ Fuel price hike: consumers under pressure, Brent back at $114
🛢️ UAE withdraws from OPEC and OPEC+ — the cartel’s grip is gone

Key Takeaways 💡

📈 Combined hyperscaler RPOs hit $1.46 trillion. Microsoft alone is up 51% year-on-year. Google’s book has roughly doubled quarter-on-quarter, with over 50% converting to revenue inside 24 months.
⚡ The binding constraint is now power and data centre capacity, not demand. Q1 capex across MSFT, GOOGL and AMZN was $112bn — and Google has guided to $180–190bn for the full year.
💵 Berkshire’s $380bn cash pile is an explicit drag with US markets at highs. The maths works in a crash; until then, it’s a third of the business earning a low single-digit yield.
🧠 Memory makers (Samsung, SK Hynix, Micron) are not adding capacity — they are raising prices. SK Hynix sits on a forward PE of ~4.5, with FY26 revenue forecast up 239% and EPS up 384%.
🛢️ Brent at $114 means another fuel hike on Wednesday. Consumer stocks look cheap but the household squeeze isn’t over — Simon’s watching, not buying.

Stocks & Markets Mentioned 📋

AGL — Anglo American — copper exposure, merging with Canadian copper player
BHP* — BHP Group — major JSE-listed copper producer
SBCOP — Standard Bank Copper ETN — direct play on the copper price
MSFT — Microsoft — Azure +40%, ending OpenAI exclusivity, $37bn AI revenue run-rate
AMZN — Amazon — AWS +28%, $364bn RPO (ex-Anthropic deal)
GOOGL — Alphabet — Google Cloud RPO doubled QoQ to $468bn
ETF5IT* — 1nvest S&P 500 Info Tech ETF — Simon’s holding
BRK.A / BRK.B — Berkshire Hathaway — $380bn cash, target prices on A-shares averaging ~$760k
005930.KS — Samsung Electronics — memory pricing power
000660.KS — SK Hynix — forward PE ~4.5, FY26 revenue forecast +239%
MU — Micron — memory maker, AI tailwind
CMH* — Combined Motor Holdings — Simon’s AI-generated coverage; 12-month target R81 vs ~R40 share price
- Initiation of coverage report here.
- Follow up report post results here.
CPI — Capitec — referenced as the “next Capitec” benchmark for the 28 May Power Hour
Brent crude — trading $111–114 vs $90 pre-Iran conflict

Listen & Subscribe 🎧

Simon Brown

* I hold ungeared positions.

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WorldWide Markets Podcast

Wednesdays are all about hard-core investing and trading with Simon Brown’s WorldWide Markets podcast (previously JSE Direct). JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.

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