How to Invest in AI Infrastructure: Who Really Wins When Big Tech Goes All-In

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and welcome to the first edition of InvestTalk in the month of September. This September 1st, 2026
As we head into the last month of the third quarter and deeper into a year that is moving oh so quickly, our mission remains the same. We come here five days a week, except on holidays, with one goal, to help make you a better and more informed investor. To that end, before we go over what happened in the market today and run down our show topics, let's start off by answering this caller question now. Good morning, gentlemen.

**SPEAKER_3** (1:03)
This is Brad from New Jersey.

**SPEAKER_4** (1:04)
Thanks for all that you do. Calling in about sticker symbol SLB.
I am interested in buying it, and I just wanted to know if you guys think this is a good buy, or if I should wait a little longer, be looking for a different price target.

**SPEAKER_5** (1:16)
Again, thanks for all that you do.

**SPEAKER_6** (1:17)
Have a good one. Bye bye.

**Luke Guerrero** (1:20)
SLB is SLB Limited. It is an $89 billion market cap company. It is the world's largest oil field services company. It used to be Schlumberger Limited. Where did they actually change their name? That's interesting. Let's take a look. Anyway, they changed their name recently. It is doing pretty well this year. Year-to-date, it is up 48.91%, up 55.13% over the past 52 weeks. They have seen some pretty solid revenue growth over the past five years, 8.6% on an annualized basis going back to the past five years. They only got $10 billion in debt. And the return on equity is pretty solid, about 14.3%.
Relative to the rest of their competitors, their enterprise value is kind of middle of the range, actually on the upper end of the range, forward-looking price to earnings as well, really the highest amongst the large cap competitors within this space. Now, they reported earnings in the middle, towards the end of July, actually, July 24th. How did they do? Revenue beat consensus estimates up 3%, quarter over quarter, 5% year over year, adjusted earnings per share, beat by, looks like, about 6%.
Net income was up 22% year over year. For them, looks like the primary drag that slowed down growth a little bit was geopolitical disruptions out of the Middle East. Iraq remained under force majeure, and so that obviously hurts a company like this whose sole source of revenue and whose real business is servicing oil fields.
But, couple that with the fact that they did have a good quarter, they are having a good year. Yes, the headline year over year numbers are a little bit softer than expected, or rather a little bit softer than they were last year, but in spite of everything, having a genuine beat on both revenue and earnings per share against some pretty depressed expectations. Decent, they also had free cash flow improvement.
Free cash flow is projected to come in softer than last year, but still, improvement quarterly. For me, when you have a company that beats expectations like this, and I don't even mean expectations like the consensus. I mean, based upon some really, really rough headwinds, that's certainly a reason to want to include it in your portfolio. That being said, it is a little bit expensive. The reason being, it's, well, it's run up a bit, and it ran up, it's kind of has continued to run post-earning. So at some point, I mean, it did have a fall about 4.9% today, as you did see some tensions starting to rise again in the Middle East, but still trading at the upper end of its five-year range. So for me, I'd keep this on my watch list for now, but it's a good solid company. We like it. We used to own it for clients. Bit expensive, still a solid, solid performer. That is Slb, used to be Schlumberger.
Thanks for the call. And we got a great show for you today, but before we move forward, I wanna talk a little bit about yesterday. On yesterday's show, we talked about Alibaba's $10 billion AI bet and what that investment meant about the global AI race. We also answered a listener question on a favorite of ours and favorite of yours as well, because we get questions on it all the time. Let's take our CCJ, Kamiko Corp. If you happen to miss yesterday's episode, I encourage you to check it out. Remember, the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. All right, on to today, a new month. My main focus point, how to invest in AI infrastructure. Who really wins when big tech goes all in? This week's earnings season delivered a clear message. The AI infrastructure build out is not a zero sum game, and the capital being deployed is staggering. But with Meta already planning an AI-driven layoffs, and SoftBank seeking another $10 billion loan just for open AI's exposure, investors need to think hard about where the real returns will flow. Also, we're going to talk a little bit about Congress punting the health insurance cliff to December 11th, what that means for your costs. Let's talk about Japan. We saw bond yields touching 3% yesterday for the first time in a really long time. And should we have time at the end of the show, we'll talk about the corporate bond market and how there's a lot of money that needs to be refinanced into what is the worst stretch for treasuries since the mid 2000s.