This week’s insight
Google just put TPUs in orbit. Back on Earth, investors are stress-testing the economics.
Raz Mangel, General Partner
Earlier this month Google launched a Project Suncatcher prototype carrying its TPUs into space. It’s an early research experiment, not a data center, but it shows how far the hunt for AI compute is going.
Same week, very different headline — the FT reported OpenAI’s annualized revenue was approaching $50B at the end of September, vs. the ~$70B previously reported. The gap came from how cloud-partner sales were counted when comparing OpenAI to Anthropic, so no, $20B of sales didn’t just vanish. Also worth remembering that annualized revenue isn’t a year of revenue. Before we argue about the multiple, let’s make sure we understand the revenue.
Markets weren’t moving as one either. For the week ended Oct 9, SMH (semis) was down 4.3% and IGV (software) was up 3.9%. Meanwhile TSMC reported September revenue up 54.6% YoY. Chip stocks down and chip sales up can both be true. One week isn’t a rotation, but it’s a good reminder that “AI” isn’t one business model or one trade.
Then there are rates. After September’s hike, Fed Governor Waller said he expects more. If you’re committing capital today against returns years out, cost of capital matters.
None of this means we should be less ambitious on AI. It means conviction on the tech doesn’t replace discipline on the economics. Who captures the revenue, how much of it turns into cash flow, how much capital it takes to get there, and what’s already in the price. You can be right on the tech and still wrong on the price.
Explore the Weekly Comps 👇
Israeli High-Tech Funding: Cumulative YTD Tracker
SaaS Public Comps
Top 10 by EV / NTM Revenue
Ranked by EV / NTM revenue multipleas of
SaaS EV / NTM Revenue vs. NTM Revenue Growth
2025-26 SaaS IPOs added:
SaaS EV / NTM Revenue Multiples Over Time
AI Infrastructure
AI Infra EV / NTM Revenue vs. Rule of 40
Every cohort constituent is plotted. Bubble size scales with market cap. Per-name detail for each cohort is in the tables below.
AI Infra EV / NTM Revenue Multiples Over Time
This week in AI infrastructure
Large-Cap Security
Large-Cap EV / NTM Rev vs. Growth
Security Comps
Sorted by enterprise valueas of
Macro Indicators
Macro-Economic Indicators
Sources and method. Public market data from stockanalysis.com (S&P Global Market Intelligence and Nasdaq Data Link), as of October 9, 2026. The two EV / NTM Revenue Multiples Over Time charts are built from PitchBook consensus data. TSMC's EV / NTM Revenue is taken from PitchBook rather than stockanalysis, so the figure in the Semiconductors table matches the multiples-over-time chart; its remaining columns are stockanalysis-sourced like every other name. EV / NTM Rev is enterprise value divided by consensus next-fiscal-year revenue. Growth-adjusted multiple is EV / NTM Rev divided by NTM growth. Rule of 40 is NTM revenue growth plus LTM free-cash-flow margin. P/E shows "n/m" where earnings are negative. SG&A percent of revenue is shown because the data source does not break out a separate sales and marketing line. Year-to-date trading is an ETF-style, market-cap-weighted cumulative return from January 2026, using a fixed basket at current share counts. P/E is the market-cap-weighted trailing P/E of profitable constituents, shown on a log scale. Capex is total reported capital expenditure, as companies do not disclose an AI-only figure. LTM is the sum of the four most recently reported quarters of cash capital expenditure, from each company's cash-flow statement (source: stockanalysis.com), and it updates every quarter rather than once a year. Fiscal calendars differ, so the LTM windows are not identical: Microsoft, Amazon, Alphabet and Meta run through June 2026, Oracle through May 2026. The 2026 column is company guidance or consensus (Amazon $200B, Alphabet $185B, Meta $135B). Microsoft and Oracle have already closed their 2026 fiscal years, in June and May respectively, so both show actuals rather than estimates: Microsoft $115.9B and Oracle $55.7B, which is why each matches its LTM bar. Microsoft's widely quoted FY26 figure of $190B, later revised to roughly $175B, counts capital expenditure plus finance leases; this chart uses cash capital expenditure from the cash-flow statement throughout, so the two are not comparable. Guidance for the calendar-year companies is not always stated on that same basis, so their 2026 bar and LTM bar are not strictly like for like. SpaceX issued no formal 2026 capex guidance; its bar is H1 actuals of $28.5B plus management's remark on the Q2 call that quarterly capex stays near $18.4B, so it is a derived figure rather than a company forecast. Bubbles on the EV / NTM Rev and Rule of 40 charts are sized by market cap, scaled so that area rather than width tracks it. Sizes are capped above roughly $680B and below roughly $19B, so the very largest names are drawn alike and so are the very smallest; hover any bubble for the figure. For the security chart, NTM Revenue Growth is used as a proxy for ARR growth. The 2025-26 SaaS IPOs (SailPoint, Figma, Navan, Netskope, and MNTN) are added to the scatter; none currently price above the EV / NTM Rev top ten. Macro indicators: the 10-year Treasury yield, the effective Federal Funds rate and CPI year-on-year, monthly from January 2012 (macro tracker workbook, PitchBook-sourced). This is not investment advice. Verify before acting.