Earnings reports from the big three cloud players disappointed investors this week. All three US hyperscalers fell a bit short of consensus for their cloud revenues in the December quarter and investor reaction has been negative. But squinting through the data, there’s a lot to like about the position of AWS, Google Cloud Platform and Microsoft Azure. In particular, the IaaS and PaaS revenue alone for the big 3 approached $200B in 2024 and grew 25%. All three cited capacity constraints and, along with Meta, are committing more than $300B in CAPEX spend this year, most of it to support current and future AI demand. As is often the case, when a new wave hits it tends to be overhyped at the beginning of the cycle and underestimated when it hits a steady state. And in between points A and B we often see blips and bumps that represent opportunities for long term investors.