What changed since No. 3
- New this week: Part 15, Oil Is the Headline. The Real Yield Is the Bill.
- New this week: Part 16, The Seller Holds the Paper.
- New this week: Part 17, The Guarantee Has No Date.
- Result: p07-t02, Call held: the result the Call expected.
- On the calendar: Oct 28, 2026: Alphabet and Microsoft report, and the Fed decides the same day: whether the TPU system sales inside Google Cloud's backlog get a size, and whether Cloud growth holds near the second quarter's 82% without them.
- On the calendar: Oct 28, 2026: Microsoft reports: the share of backlog due within twelve months, 30% last quarter, and whether the near book's growth closes on the far book's 113%; at Alphabet, whether the TPU contracts inside cloud backlog get a size; at Meta, which reports October 21, whether the $10.8 billion of restricted cash stays restricted.
The week, in our words
The Guarantee Has No Date. By mid-2026 the five largest builders of AI data centers had signed $1.12 trillion of leases not yet begun, by DeepStack's sum of their filings, 69% more than Moody's counted at the end of 2025. The leases reach the balance sheet on a schedule. The guarantees beside them have no date.
The next test is on the calendar. Oct 28, 2026: Alphabet's September quarter: whether capital spending takes 80 cents or more of each dollar of operating cash, after 49.5 cents a year earlier and 95.0 cents in the first half of 2026.
This week in The Buildout · Part 17
The Guarantee Has No Date
The leases the AI builders signed reach their balance sheets on dates their filings print. The guarantees behind the projects carry little or no recorded liability, and four filings between December 2026 and February 2027 test whether the risk off the books is still rising.
The DeepStack CallMixed
Leases pile up faster than they start, Alphabet's backstops cost more to carry, and Oracle's cash leans on its customers' prepayments.
- Add the five 'not yet commenced' lines in February 2027: $1,118.5 billion at mid-2026 against Moody's $662 billion at end-2025.
- Read guarantees at their threshold, not booked liability: Meta's Hyperion guarantee of about $28 billion carried none on June 30, 2026.
- Strip prepayments from Oracle's operating cash on Dec 14: $11.4 billion of $23.1 billion in the quarter to Aug 31, 2026.
Forecast of the week · Part 03
Did Nebius's September-quarter results, in the release, the shareholder letter or on the call, still price compute capacity of six months or less at a premium to its one-to-three-year contracts?
- The Call
- 60%
- Claude
- 25%
- DeepSeek
- 75%
- GPT
- 64%
- Readers
- None so far
The numbers that moved
- 10-year Treasury
- 5.00%
- −9 bp this week
- 2-year Treasury
- 4.69%
- −5 bp this week
- 30-year Treasury
- 5.33%
- −10 bp this week
- 10-year real yield
- 2.66%
- −8 bp this week
- S&P 500
- 7,757
- +0.5% this week
- Brent crude
- $115.22
- −8.4% this week
Data: U.S. Treasury; S&P Dow Jones Indices via FRED; EIA via FRED
Notes under pressure · 4 of 4
Note 04 · Above the 5% line
The gap between the earnings yield and the 10-year is almost gone.
What would change our read. Our read eases if the 10-year closes below 5.00%, or if forward earnings rise about 4% at today’s prices. That would cut the multiple to 18.2x and put the earnings yield 50 basis points above the 10-year.
Note 01 · Curve steepening
The long end is doing the tightening.
What would change our read. If the long end falls while the Fed holds, the market is pricing weaker growth rather than heavier supply. Cheaper long money would ease the financing math in Parts 03 and 08, and we would say so.
Note 02 · Profits ahead of productivity
Profits are running ahead of productivity.
What would change our read. Productivity growth above 2% a year for two straight quarters would start to close the gap. A fall in profits with productivity flat would tell us the denominator was borrowed.
Note 05 · Real money is expensive
Debt is a contract written in real terms.
What would change our read. A 10-year real yield back below 2% would cut the real cost of the buildout’s debt. Breakevens rising toward 3% would mean the bond market has started to believe the households.
Chart of the week · Live
Profits ran ahead of the economy
US corporate profits against output per hour, both indexed to 100. Move the starting line and watch the gap Part 10 calls the denominator.
Run the numbers yourselfAlso in The Buildout
Part 16Markets
The Seller Holds the Paper
The demand for AI chips is real, and the sellers now carry part of the bill: longer receivables, guarantees, backstops and loans to their own buyers. DeepStack measures Nvidia's share, sets the critics of Anthropic beside its defenders, and names the November 18 filing that tests the view.
Part 15Markets
Oil Is the Headline. The Real Yield Is the Bill.
The barrel gave a Fed already facing hot core prices one more reason to hike, and the borrowing of the Treasury and the hyperscalers helped lift the real yield that long-dated earnings answer to. DeepStack reads the three sides, splits the 10-year on public data and names the tests, starting with the Fed's decision of October 28.
Part 14Markets
The Cash Arrives Unevenly
Microsoft pays for its data centers from its own cash with room to spare. Alphabet and Meta now spend most of theirs and Amazon more than all of it; Alphabet and Amazon have covered the gap with stock and bonds. DeepStack reads the filings company by company and names the October 28 report that tests the view.
Results · one test came in
Call held Oct 19, 2026 · Part 07
Japan's holdings of U.S. Treasury securities fell: $1,103.9B at end-July 2026, $1,068.3B at end-August 2026.
Treasury's Table 5 of major foreign holders, read on 2026-10-19, puts Japan's holdings at $1,068.3B at end-August 2026 against $1,103.9B at end-July 2026, a change of -$35.6B in the same table (U.S. Treasury, TIC Table 5: Major Foreign Holders of Treasury Securities).
The Docket: dates that will settle the argument
- Oct 28, 2026
Alphabet's September quarter: whether capital spending takes 80 cents or more of each dollar of operating cash, after 49.5 cents a year earlier and 95.0 cents in the first half of 2026.
Part 14: The Cash Arrives Unevenly - Oct 28, 2026
Alphabet and Microsoft report, and the Fed decides the same day: whether the TPU system sales inside Google Cloud's backlog get a size, and whether Cloud growth holds near the second quarter's 82% without them.
Part 12: The Model Is Not the Price - Oct 28, 2026
Microsoft reports: the share of backlog due within twelve months, 30% last quarter, and whether the near book's growth closes on the far book's 113%; at Alphabet, whether the TPU contracts inside cloud backlog get a size; at Meta, which reports October 21, whether the $10.8 billion of restricted cash stays restricted.
Part 11: The Backlog Is Not the Quarter - Oct 28, 2026
Microsoft and Alphabet report October 28, after Meta on October 21, and Amazon follows on October 29; depreciation, server lives and 29.5% growth will test the earnings denominator.
Part 10: The Bubble Is in the Denominator