SHOWNOTES

In this episode of the Telltales Podcast, Mike, Jason and Hunt walk through the latest Cash Flow Memo, tying together US fiscal policy, oil and gas fundamentals, and the cash-hungry AI build-out at Apple, Amazon, Nvidia and more. They also dive into GLP-1 pricing wars, ophthalmology upstarts, and how post-COVID cash piles are being spent in biotech.

[00:00] Welcome, format & Cash Flow Memo overview

[00:20] Quick disclaimer (informational only)

[00:30] Exhibit C – Oil demand, OPEC and a “mature” China

Hunt reviews OPEC’s restrained production increases and how slower global liquid fuel demand growth, especially from a now-mature China, is extending the time needed to work off surplus barrels. They discuss why macro risks (Iran, Russia) may still keep WTI around $60 despite sluggish demand.

[02:20] Exhibit B – US natural gas, LNG and power demand

The crew breaks down booming LNG demand versus relentless US gas supply growth from the Permian, Haynesville and Marcellus. Negative Waha hub pricing, pipeline constraints to the Gulf Coast, coal’s temporary share gain in power, and the likely return of gas-fired growth post-2026 all feature.

[03:34] Exhibit A – US deficits, debt-to-GDP and the dollar

Hunt walks through US government revenues, spending and a projected $400–500B deficit reduction in 2026, contrasting America’s path with China, Europe and Japan. They highlight how stabilizing debt-to-GDP around ~100% and a potentially stronger dollar could support capital markets.

[04:54] Apple, Siri & the Gemini deal: renting AI instead of building it (Memo p.1)

Hunt, Jason and Mike dig into Apple’s decision to license Google’s Gemini model to upgrade Siri, while keeping the model on Apple-controlled servers for privacy and antitrust reasons. They contrast Apple’s historically low ~$12B CapEx with Amazon, Alphabet and Microsoft, and debate whether running large language models will finally force Apple to “spend like a hyperscaler.”

[07:00] Hardware vs software at Apple, and the next CEO profile (Memo p.1)

Mike recalls Apple’s earlier need to buy NeXT for its OS, drawing a parallel to today’s LLM lag. They argue that under Jobs, software quality led hardware, whereas under Cook, hardware has leapt ahead while software (Siri, iOS polish) has slipped—shaping why a hardware-centric leader like John Ternus may be the logical next CEO.

[09:00] Google’s incentives, Apple’s privacy stance & why not just use Google’s cloud? (Memo p.1 – AAPL, GOOGL)

The hosts question whether a $1B annual fee truly compensates Google for tailoring Gemini to Apple silicon and serving it from Apple data centers. They explain why Apple can’t simply run AI off Google’s cloud without undermining its security narrative and App Store defense.

[11:00] TSMC, Nvidia vs Apple and the chip supply pecking order (Memo p. 1, 3 – AAPL TSM NVDA)

Hunt quizzes Jason on who is the bigger TSMC customer now—Apple or Nvidia—and how priority access to leading-edge nodes has shifted. They touch on AMD’s timing on new process nodes, hints of a historical feud between Steve Jobs and Jensen Huang, and why Apple still relies on laptop-class chips in its data centers.

[14:58] Harrow Health: retina focus and salesforce strategy shift (Memo p.20)

Turning to healthcare, the team revisits Harrow’s progress commercializing its ophthalmology portfolio, especially one drug with slower-than-expected uptake. Jason explains Harrow’s pivot to target retina surgeons more directly and sell a broader basket of products through a focused salesforce.

[15:54] GLP-1 wars: Novo Nordisk vs Eli Lilly on price (Memo p.19)

On page 19, they examine Novo Nordisk’s response to Lilly’s lead in GLP-1s, with Novo aggressively undercutting pricing on Ozempic/Wegovy to ~$199–349 per month for self-pay patients. Jason notes this is a rare corner of healthcare where competition and out-of-insurance purchasing have driven prices from ~$1,200 to ~$200 a month in just a year.

[17:09] Regeneron’s Eylea cliff and new eye-care competition (Memo p.19)

Mike outlines how Regeneron’s Eylea faces a wave of biosimilar competition, underwhelming uptake of Eylea HD, and new implant-based therapies that reduce injection frequency to every 6–12 months. They still respect Regeneron as a company, but highlight mounting pressure on this key franchise.

[18:12] Vertex: cystic fibrosis strength and non-opioid pain optionality (Memo p.15)

The conversation moves to Vertex’s healthy cystic fibrosis business and its potential upside from novel pain medicines awaiting clarity under the US “No Pain Act.” Jason emphasizes how reimbursement decisions could unlock broader coverage and meaningfully expand the addressable market.

[18:47] BioNTech vs Moderna: who kept their COVID cash? (Memo p.15)

Hunt contrasts BioNTech’s ~€14B cash hoard with Moderna’s reduced ~$4.5B balance, despite both enjoying COVID windfalls. He credits BioNTech’s more conservative founders—who famously still bike to work—as an example of capital discipline, and hints at a new analytical angle on both names reserved for a future episode.

[19:47] Mega-cap tech CapEx: Apple, Amazon, Alphabet, Microsoft and Tesla (Memo pp.1–2)

Back on page 1, they compare Apple’s modest CapEx with Amazon’s staggering ~$110B spend and ~$90B R&D budget, plus Microsoft’s $70B CapEx. The hosts note that while free cash flow can look lower in the short run, these companies are plowing enormous sums into data centers and AI infrastructure.

[22:12] Oracle’s big bet on OpenAI (Memo p.2)

On the software page, they highlight Oracle’s ~$27B CapEx run rate and its heavy commitment to building data centers for OpenAI, despite having far less free cash flow (and more debt) than Microsoft or Amazon. This raises questions about how much balance-sheet strain Oracle can comfortably bear.

[22:44] Nvidia earnings preview, hyperscalers vs “Neo-Cloud” buyers (Memo p.3)

Turning to page 3, the team previews Nvidia’s post-close earnings, noting that hyperscalers now account for slightly more than half of Nvidia’s sales, including high-margin networking gear. Jason labels the rest of the customer base “Neo-Cloud”—banks like JPMorgan, big pharma R&D shops, government labs, research supercomputers and sovereign data centers worldwide.

[25:38] Nvidia margins, the “tax” on AI and how long it can last (Memo p.3)

They marvel at Nvidia’s ~$170B revenue run rate with over half dropping to free cash flow after CapEx, R&D and taxes. Jason will be watching gross margins closely to see if the “Nvidia tax” can hold as Blackwell ramps, networking mix shifts and capex budgets eventually hit limits.

[26:26] Wrap-up, next-week teaser & closing disclaimer

To dig into the full numbers, exhibits, and company-by-company cash flow detail discussed in this episode, download the latest Cash Flow Memo at telltales.us. If you enjoy this format, please like, subscribe, and share the Telltales Podcast with a friend who loves deep-dive investing conversations.

This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.

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