Big tech has a cash flow problem, and it could provide the pin that pops today’s stock market mania.

The MAG-4 hyperscalers including $GOOG, $AMZN, $META and $AMZN are pouring a record $200B annually into data center infrastructure, primarily $NVDA GPUs for the AI Arms race.

These five tech companies have provided the majority of earnings growth and price gains in the broad market indices so far this year.

But today, we’ll show why the MAG-4 earnings could be significantly overstated - as their earnings growth increasingly diverges from cash flow. This has set the stage for a reckoning in the MAG4 earnings trajectory, which in turn, would threaten the $NVDA growth story since the MAG4 are the major customers for $NVDA GPUs.

And if these five stocks take a stumble, it would deliver a death blow to the earnings outlook for the broad market indices, like the Nasdaq and S&P 500.

Let’s dive into the single greatest risk facing today’s stock market...

👇🧵 In this analysis, we’ll zero in on the $GOOG earnings report from last week, which provided a preview of what’s to come for the rest of the MAG5.

Despite $GOOG reporting double digit earnings growth that beat analyst expectations, the shares sold off by 5%. It also sparked a broad-based sell off across tech that took the $QQQ down 3.6% (largest daily loss in 2 years) and wiped out nearly 1 trillion from the MAG5 basket alone.

The problem? $GOOG free cash flow dropped 40% to $13.5 billion, massively undershooting its reported net income of $24.3 billion.

This is part of a broader trend among the MAG4 hyperscalers, where cash flow has increasingly diverged from earnings in recent years.

This trend began three years ago, thanks to a series of accounting adjustments that temporarily juiced earnings growth, but which could be on the verge of reversing.

Gather 'round, fintwit... it's time to tell the story of the greatest wealth compounder you've never heard of.

This stock has returned 50% annually since its 2016 IPO, and more than doubled the total returns of world-dominating stocks like $AAPL, $GOOG, $MSFT, and $META.

Today, we’ll explain what the business does, the secret behind its world-beating returns, and why this story’s just getting started… 👇 The business is Kinsale Capital $KNSL - a specialty insurance business that writes “excess & surplus” (E&S) policies.

These are the high-risk policies that standard property & casualty insurers won’t touch. Think of home insurance in hurricane-prone areas, like coastal cities in Florida. Or business insurance for convenience stores in high-crime areas.

Here’s the secret about E&S insurance: these high-risk policies don’t necessarily mean a higher-risk business model. Over the last two decades, E&S policies have generated 4.3% lower loss ratios than standard P&C policies.

AI will unleash a productivity boom on the same scale as the internet

And $NVDA will be among the biggest winners

What about $NVDA investors?

History provides some clues... First, what makes $NVDA the AI leader?

Machine learning algorithms, known as AI, are ever-changing and “learning” as they go. This requires massive computing power.

And $NVDA is the undisputed leader in producing AI computing chips with the greatest sheer processing power.

Today, we are in the preface of the greatest legal transfer of wealth in history

https://twitter.com/Porter_and_Co/status/1602692294402080768?s=20&t=J4_HKAxmn1f6Qid7niqL1A

India is the latest country a push to increase its liquified natural gas (LNG) import capacity as part of the government's plan to reduce the country's dependence on coal and increase the share of natural gas in its energy mix to 15% by 2030. With its sights set on a greener future, India is revving up its LNG engine and looking to sign long-term deals to fuel its growth.

Will the U.S. fall into the inflation trap of the 70s?

During the 70s, inflation climbed, and so did the anticipation of inflation. The more it rose, the more people expected it to rise. But when inflation came down, consumers had more spending power.

https://twitter.com/hmeisler/status/1562869218810658817?s=20&t=Es4RTmDTgowpze64OZWzwQ

Similar events are taking place today..

A sudden increase in used-car prices in January in the U.S. has the potential to harm hopes of declining inflation, even as the Federal Reserve increases interest rates.

In a recent .@MebFaber podcast, @porterstansb made a bold prediction: Boeing is going bankrupt

🧵Exploring the fate of $BA Boeing built the iconic B-17 bomber, known as the "Flying Fortress", a legendary plane during World War II. Boing had a reputation for durability and reliability, and its engineers were experienced aircraft builders who focused on quality.

1/ The stage is set for the largest legal wealth transfer in history.

Many fortunes will be lost… and a few will be gained, as trillions of dollars in wealth change hands.

Here's what you need to know to get on the right side👇 2/ First, how did we get here?

Following the Great Financial Crisis, policymakers solved nothing.

Sure, they beefed up regulations on real estate lending and cracked down on the risk-taking ability of Wall St banks.

But this merely re-arranged the deck chairs on the Titanic.

One of the top #oil giants' CEO warned the world will face shortages of liquefied natural gas #LNG through 2026. “You look around the world, and the balance is, the world will be short [of liquefied natural gas] probably through 2026. That’s how we’re seeing that balance play out — it just takes time to bring these very large, capital-intensive projects on stream.”

1/ The fuse is lit on a $1.3T ticking time bomb...

And yet, the mainstream media remains mysteriously quiet

Hundreds of billions of dollars in securitized loans could go up in smoke

Here's the Trillion Dollar debacle that you won't hear about on CNBC... until it's too late 👇 2/ Lucky Lopez is a veteran car dealer who buys repossessed cars from banks at auction. From his frontline view of the auto financing market, Lopez has recently reported some alarming trends, which all point in one direction…

The $1.3 trillion auto loan bubble is bursting.

1/ Warren Buffett is the GOAT of wealth compounding

That's not an opinion - that's what shows up in the data

A simple investment in $BRK beat every fund manager, and every other common stock, over the last four decades - turning $1 into over $3,600

Let's explore... 👇 2/ First things first: the data here comes courtesy of the quants at AQR, who produced a terrific paper called "Buffett's Alpha" (link at the end).

The paper begins by noting the importance time horizon.

In any given quarter or year, countless fund managers outperform $BRK