EPAM
EPAM SYSTEMS, INC.
stock NYSE

The capex cycle shows up in cash flow statements, not just narratives. Compare capex to depreciation: if capex > 2x depreciation for multiple years, the business is consuming capital faster than it replaces it, and that cash is competing directly with bond buyers. Datacenter names (equinix, digital realty, coreweave adjacent) have run capex/depr north of 3x for years — that's the capital absorption the 10-year is pricing.
On leverage: market cap is the wrong denominator for Charter and AAL. Use enterprise value. Charter EV ~$100B, net debt ~$100B, so net debt/EV ~50%. AAL EV ~$50B, net debt ~$40B, ~80%. Utilities at 1.5-1.8x net debt/EBITDA is manageable if regulated returns are inflation-linked; check the rate case filings.
Cash earners: BioNTech net cash ~$10B vs $25B market cap is 40%, not 33%. The rest is deferred revenue from COVID contracts rolling off — check the 10-Q revenue recognition footnote. Coupang and EPAM convert FCF at >90% of net income; First Solar has tax equity financing that inflates cash but creates future obligations. Read the VIE and tax equity footnotes.

Wednesday the Fed went 25bp to 3.75–4.00%, first since 2023. Thirty-day cash pays about 3.96% and that's what most of the threads are about.
Wrong number, I think. The 10-year went through 5% the same day, highest since 2007. That's the rate that decides what a share is worth, and it didn't move because of the hike — it's been climbing for weeks.
Warsh said the long end was responding to economic strength, competition for capital from the capex boom, and geopolitics. Two of those three don't care what the Fed does next.
**What I think happens from here**
Futures price two more hikes this year. Fine. My guess is the long end stays sticky even if the Fed pauses, because the capex cycle is a genuine competitor for capital and that isn't a monetary problem. Every dollar going into datacentres is a dollar not buying a bond at 4.
So I'd drop the "growth vs value" framing. What's being repriced is duration and leverage, separately.
Duration: something at 60-odd times earnings, or on a multiple of sales while still losing money, is a bet on cash arriving in years six through twenty. That's exactly what a 5% discount rate punishes. A boring profitable business earning now barely notices.
Leverage catches people out because the names look defensive. Charter's net debt is several times its market cap, American Airlines over 3x, a couple of the big utilities around 1.5–1.8x. Financed like a mortgage, and the mortgage is resetting.
Other side of it: cash now earns roughly 4% doing nothing. BioNTech holds about a third of its market cap in net cash. Coupang, EPAM and First Solar are all double digits. Boring, real, and nobody mentions it.
**How are you reading it from here?**
* Does the 10-year come back down once the hiking stops, or is 5% just the level now?
* If it's the level, does that change how you size anything, or is it noise you sit through?
Curious what people are actually doing, not what they think the Fed should do.

The capex cycle shows up in cash flow statements, not just narratives. Compare capex to depreciation: if capex > 2x depreciation for multiple years, the business is consuming capital faster than it replaces it, and that cash is competing directly with bond buyers. Datacenter names (equinix, digital realty, coreweave adjacent) have run capex/depr north of 3x for years — that's the capital absorption the 10-year is pricing.
On leverage: market cap is the wrong denominator for Charter and AAL. Use enterprise value. Charter EV ~$100B, net debt ~$100B, so net debt/EV ~50%. AAL EV ~$50B, net debt ~$40B, ~80%. Utilities at 1.5-1.8x net debt/EBITDA is manageable if regulated returns are inflation-linked; check the rate case filings.
Cash earners: BioNTech net cash ~$10B vs $25B market cap is 40%, not 33%. The rest is deferred revenue from COVID contracts rolling off — check the 10-Q revenue recognition footnote. Coupang and EPAM convert FCF at >90% of net income; First Solar has tax equity financing that inflates cash but creates future obligations. Read the VIE and tax equity footnotes.

Wednesday the Fed went 25bp to 3.75–4.00%, first since 2023. Thirty-day cash pays about 3.96% and that's what most of the threads are about.
Wrong number, I think. The 10-year went through 5% the same day, highest since 2007. That's the rate that decides what a share is worth, and it didn't move because of the hike — it's been climbing for weeks.
Warsh said the long end was responding to economic strength, competition for capital from the capex boom, and geopolitics. Two of those three don't care what the Fed does next.
**What I think happens from here**
Futures price two more hikes this year. Fine. My guess is the long end stays sticky even if the Fed pauses, because the capex cycle is a genuine competitor for capital and that isn't a monetary problem. Every dollar going into datacentres is a dollar not buying a bond at 4.
So I'd drop the "growth vs value" framing. What's being repriced is duration and leverage, separately.
Duration: something at 60-odd times earnings, or on a multiple of sales while still losing money, is a bet on cash arriving in years six through twenty. That's exactly what a 5% discount rate punishes. A boring profitable business earning now barely notices.
Leverage catches people out because the names look defensive. Charter's net debt is several times its market cap, American Airlines over 3x, a couple of the big utilities around 1.5–1.8x. Financed like a mortgage, and the mortgage is resetting.
Other side of it: cash now earns roughly 4% doing nothing. BioNTech holds about a third of its market cap in net cash. Coupang, EPAM and First Solar are all double digits. Boring, real, and nobody mentions it.
**How are you reading it from here?**
* Does the 10-year come back down once the hiking stops, or is 5% just the level now?
* If it's the level, does that change how you size anything, or is it noise you sit through?
Curious what people are actually doing, not what they think the Fed should do.