Hyper Scalers, Polymarket, AI Crossover, Earnings.

Happy Friday! This was one of the busiest weeks of the year, with most of the major hyperscalers and tech platforms reporting, alongside new inflation data and a Fed meeting. Big picture, there weren’t any major surprises. The tone across markets and policy was one of stability. The Fed held steady and won’t decide again for another 45 days, leaving plenty of time for more data to guide the next move.

As for AI, the narrative is still running strong. While there are certainly pockets of exuberance, our conversations with companies suggest we’re just starting to see real implementation, with AI products being embedded into existing software suites in tangible ways. We highlight some interesting data below!

Here is the summary if you want just that:

• Azure takes on AWS

• Fiverr record cash flow + spend per buyer.

• 26% of Polymarket vs Robinhood

• Meta wowza.

Let’s kick it off with a chart summarizing all three scaler, Microsoft, Google and Amazon AWS.

Azure is now leading the cloud pack, growing 39% Y/Y and adding $9.2B in ARR in Q2, the most of any major provider. Google Cloud saw a modest rebound to 32% growth, while AWS remained flat at 17%. Amazon margins were little light, some will chalk that to competion. Azure’s outperformance suggests strength in enterprise renewals and broader product integration, while AWS’s deceleration is a reminder that incumbency doesn’t guarantee momentum.

Speaking of earnings. Fiverr just posted $94.4M in trailing 12-month operating cash flow, its highest ever. That’s nearly double where it was a year ago. Also and more important is their move upmarket shows with spend per buyer hitting a record at $318. A steady increase that’s also reflected in both 12- and 24-month average spend cohorts.

Just for context, they grew faster than Apple, Google, Tesla, and Amazon and trade at 70-90% discount. It’s also a good reminder that even in slower macro conditions, well-structured marketplaces can hum quietly in the background. Market hasn’t been friendly to job market sensitive names with FED rates staying elevated, but their day in the sun will come.

Back to the AI data, and this time time-of-day correlations, which shows that generative AI apps are used alongside Amazon, Google, TikTok, and YouTube, but not Slack or Zoom. This suggests AI is following a consumer engagement pattern, becoming part of everyday life more than workplace tools. It also hints that lower-correlated apps may be more insulated from disruption, at least for now.

We also dug into App Store advertising to see who’s spending to spotlight their AI capabilities. Adobe topped the list, followed by Microsoft and Google. You could interpret this two ways, they’re either playing catch-up or doubling down from a position of strength. Either way, it’s a signal worth tracking.

Back to earnings. Robinhood reported this week, a company we follow closely and remain intrigued for the long term. They’re going all-in on tokenization and prediction markets, and now we know why. Data shows that ~26% of Polymarket users also use Robinhood, which is by far the deepest overlap among adjacent financial platforms. For comparison, only ~5% of Robinhood users are on DraftKings or FanDuel. This is imokrtant data as it shows that part of the move into prediction market is actually defensive.

How about Meta. Meta posted a strong quarter across the board, with revenue hitting $47.5B (+22% Y/Y) and operating income up 38% to $20.4B, driving an impressive 43% operating margin. Daily Active People reached 3.48B (+6%), ad impressions rose 11%, and average price per ad increased 9%, signaling strength in both engagement and monetization. Free cash flow came in at $8.55B, and while CAPEX was revised up by $2B on the low end which is up $30B Y/Y, a massive investment pace. The takeaway? Revenue growth is creating real leverage.

The $5T question: when will the market care about all the investment spend that will eventually flow through the P&L over the coming years.

These are NO LONGER ASSET LIGHT BUSINESSES.

See you next week!

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About Avory & Co.

Investing where the world is headed. 

Avory specializes in high-conviction equity strategies, emphasizing Secular Growth and Transformation Stories driven by exceptional teams. Data guides decisions. We cater to high net worth investors, family offices, and institutional investors. Note: This information doesn't constitute a recommendation to buy or sell any mentioned securities. Avory is based in Miami, Florida with clients all across the globe.

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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.