🧢 UncappedEx

Earnings season is in full swing and this week is one of the biggest, with five of the Magnificent 7 — Amazon, Apple, Alphabet, Microsoft, and Meta — reporting over the next two days. 

One area investors will be laser-focused on is AI, particularly regarding the amount of capital expenditure, or capex, each will be laying out on property and equipment like massive data centers for the rest of the year and beyond. 

Meta, which reports after the bell tomorrow, has been pouring billions into data centers to power its AI ambitions — and traders, for now, are going along.

• Analysts surveyed by FactSet expect Meta’s third-quarter revenue to jump 22% year over year to $49.5 billion. Meanwhile, its spending on property and equipment is projected to surge 123% to $18.4 billion, surpassing its anticipated net income of $17.1 billion.

• That would push Meta’s capital expenditure to roughly 37% of revenue, up from about 20% a year earlier — its highest capex-to-sales ratio on record, as we’ve charted. 

• The spending spree shows no sign of slowing: Wall Street predicts capex will approach $97 billion in 2026, while Meta has outlined plans to invest $600 billion in US data centers and infrastructure through 2028.

CEO Mark Zuckerberg recently told the “Access” podcast that “misspending a couple of hundred billion dollars,” while “very unfortunate,” would still be worth it to achieve superintelligence. “The risk, at least for a company like Meta, is probably in not being aggressive enough rather than being somewhat too aggressive,” he said.

The Takeaway

While investors will press Meta on how and when these AI investments will pay off, JPMorgan analysts who cover Amazon and Meta are optimistic on both hyperscalers’ upcoming results. They recommend traders position for strength — but not too much strength — from both stocks as investors react to the quarterly figures.

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Last year, China bought more than $12 billion worth of American soybeans. Since the summer, however, not a single bean has been shipped, one of many commodities that fell victim to the simmering trade tensions. 

With a trade truce seemingly in reach, China might be about to start buying American beans again. Soybean futures rose 2% to a five-month high in Chicago on Monday morning, after Treasury Secretary Scott Bessent said China “will be making substantial purchases” as the two countries close in on a trade deal.

• For American farmers, it’s a much-needed jolt of optimism, as soybeans are the country’s biggest agricultural export — worth $24.5 billion last year. 

• China typically buys more than half of that total, so its absence this season has left US silos full and profits thin. 

• Earlier this month, Washington outlined a bailout plan to help offset losses, but payments have been delayed by the government shutdown, leaving growers in limbo in the middle of harvest season.

The Takeaway

If this soybean standoff feels familiar, it’s because we’ve been here before. Back in 2018, the US-China trade flare-up cut American soybean exports to China by 75% in a single year, prompting the government to roll out roughly $12 billion in emergency farm aid.

Meanwhile, China has already stocked up soybeans from Brazil and Argentina and is ramping up domestic production. Still, Bessent, himself a soybean farmer, said growers will be “extremely happy” with the upcoming deal “for this year and for the coming years.”

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Apple is planning to put advertising in its Maps app 

Apple is well known for its iconic ads. Now, the same thing that attracted many to the company in the first place could be what deters them from its products. 

Estimated time of arrival

• 🏛️ Louvre Heist: Traders think there’s a 64% chance that a thief involved in the Louvre heist will be charged before November, with the market pricing an 89% chance of at least one charge before December.

• 📊 Fed Cut: Needless to say, it would be a shocker if the October Fed decision is anything but a 25-basis point cut, with traders on Robinhood’s* prediction market aligned and giving a 97% chance of that being how things go down later this week. 

• 🗽 NYC Mayoral: As early voting starts, Robinhood’s market price for a Zohran Mamdani win translates to a 92% chance of victory for the assemblyman, with rivals Andrew Cuomo ($0.08) and Curtis Sliwa ($0.02) trading for pennies on the dollar.

• ✨ TikTok: With just days to go, traders on Polymarket think there’s a 17% chance that a TikTok sale will be announced by October 31. Current pricing implies only a 59% chance the deal is done by the end of the year. 

*Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company.

• Tesla chair urges approval of $1 trillion pay package: “Without Elon, Tesla could lose significant value”

• Even the White House is happy “Halo” is finally available on PlayStation, and that makes GameStop stock happy, too

• Thinking about leveling up your derivatives game as earnings season kicks into high gear? Here’s what you need to know about futures’ past before adding them to your present