The Four Horsemen of AI Warfare

The Four Horsemen of AI Warfare: Why Palantir, Axon, Cloudflare, and CrowdStrike Are Reshaping Global Security

The future of warfare isn't coming; it's already here, and it's powered by artificial intelligence. Forget tanks and fighter jets – the real battleground is digital, and four companies are leading the charge: Palantir, Axon, Cloudflare and CrowdStrike. They're not just participating in the AI arms race; they're defining it.

1. Palantir: Owning the Intelligence Backbone

• Why it Matters: Palantir isn't just selling software; it's embedding its AI-powered platforms like Gotham and Foundry into the very fabric of military and intelligence operations. From Project Maven's battlefield intelligence to the Space Force's satellite analytics, Palantir is the architect of AI-driven decision-making in high-stakes environments.
• For the Enterprise and AI: Palantir's AIP is rapidly becoming the standard operating system for enterprise AI. It offers a unified intelligence layer, allowing businesses to integrate AI into existing data infrastructure, streamline decision-making, and gain a competitive edge. This is crucial as enterprises seek to operationalise AI at scale.

2. Axon: Dominating Real-World Enforcement

• Why it Matters: Axon has created a closed-loop ecosystem for law enforcement, from body cameras to cloud-based evidence management and AI-driven real-time intelligence. Its control over this vertical market is absolute, and its recent actions against competitors like Flock Safety demonstrate its commitment to maintaining that dominance.
• For the Enterprise and AI: Axon's expansion into corporate security and critical infrastructure monitoring signifies its potential beyond law enforcement. Its integrated AI solutions provide real-time situational awareness and response capabilities, crucial for protecting assets and ensuring security in a rapidly evolving threat landscape.

3. Cloudflare: Securing the Network Layer of AI Defence

• Why it Matters: Cloudflare's globally distributed AI-native defence network is redefining cybersecurity. By processing and neutralising threats at the network edge, it eliminates the vulnerabilities of traditional centralised systems. Its network is becoming an essential component of national defence strategies.
• For the Enterprise and AI: Cloudflare's edge computing capabilities are vital for handling the demands of AI workloads. As AI applications become more complex, Cloudflare's ability to process data closer to the source reduces latency and enhances security, enabling real-time AI execution across global networks.

4. CrowdStrike: Mastering the Cyberwarfare Battlefield

• Why it Matters: CrowdStrike's AI-driven Falcon platform goes beyond traditional cybersecurity by predicting and neutralising threats before they materialise. In an era of state-sponsored cyberattacks and autonomous AI threats, CrowdStrike's proactive approach is essential for protecting critical infrastructure and sensitive data.
• For the Enterprise and AI: As cyber threats become more sophisticated and AI-driven, CrowdStrike provides the essential AI-first security architecture needed to defend against them. Its ability to operate at machine speed is crucial for enterprises facing persistent and evolving cyber risks.

The Rise of AI Monopolies

These four companies aren't just competing; they establish monopolies in their respective domains. They control the intelligence, the real-world enforcement, the network security, and the cyberwarfare battlefield. In a world where AI is the ultimate weapon, these companies are not just participants; they are the architects of the new defence paradigm.

The implications for enterprises and the broader AI landscape are profound. These companies are shaping the standards and infrastructure for AI-driven operations across multiple sectors. Understanding their dominance is crucial for businesses and governments alike as they navigate the complexities of the AI-powered future. 

Agentic AI at a Crossroads: Acemoglu’s Vision and the Path Forward

Agentic AI—systems capable of acting independently to achieve goals—stands at a pivotal juncture, reshaping how enterprises operate and compete. Few thinkers are better positioned to guide us through this shift than Daron Acemoglu, the MIT economist whose groundbreaking work on institutions, technology, and prosperity earned him the 2024 Nobel Memorial Prize in Economic Sciences. In a recent provocative piece, Acemoglu presents a binary hypothesis on agentic AI’s future, framing it as a choice between a strategic advisor enhancing human decisions and an autonomous decision-maker steering the ship. This blog traces his background, unpacks his hypothesis chronologically, and expands into a practical roadmap for organisations, covering why it matters, actionable steps, and implications for IT services and products. Let’s dive in.   

Background: Who Is Daron Acemoglu?

Born on September 3, 1967, in Istanbul, Turkey, Daron Acemoglu is a titan in modern economics. After earning his undergraduate degree from the University of York and his PhD from the London School of Economics in 1992, he joined MIT, where he now serves as the Elizabeth and James Killian Professor of Economics. His research has redefined how we understand economic growth, focusing on the interplay of institutions, technology, and labor. Co-author of the seminal book Why Nations Fail (2012) with James A. Robinson, Acemoglu argues that "inclusive" institutions foster prosperity, while "extractive" ones stifle it—a lens he now applies to AI. With accolades like the 2005 John Bates Clark Medal and a 2024 Nobel Prize (shared with Robinson and Simon Johnson), he’s among the world’s most cited economists, making his take on agentic AI a must-heed perspective.   

The Journey Begins: Acemoglu’s Hypothesis in Chronological Order

Acemoglu’s exploration of agentic AI builds on his decades-long study of technology’s societal impact. His recent hypothesis, rooted in this legacy, unfolds as a binary choice:

AI as Strategic Advisor (The Inclusive Path)

Early in his career, Acemoglu examined how technology could amplify human potential without displacing workers. This evolved into his advisor model, where AI enhances decision-making, offering insights and recommendations, while humans retain control. Think of AI as a brilliant aide, like a doctor’s diagnostic tool, improving outcomes without replacing the physician.

AI as Autonomous Decision-Maker (The Extractive Risk)

Later, his work on automation and inequality highlighted technology’s darker potential. This informs his autonomous model, where AI acts independently, executing decisions without oversight. He envisions AI negotiators locked in unyielding standoffs—say, two systems haggling over a trade deal, programmed never to compromise—potentially destabilising markets and eroding human agency.   

His chronological arc ties past insights to present warnings: the degree of control we cede to AI will shape efficiency, equity, and stability. Acemoglu fears unchecked autonomy could mirror extractive institutions, concentrating power and wealth, while the advisor model aligns with inclusive growth, if guided wisely.   

Why It Matters: The Stakes Are High

Agentic AI isn’t a fleeting trend—it’s a paradigm shift. Businesses mastering it will redefine efficiency, innovation, and customer experience, gaining a decisive edge. Those lagging in risk obsolescence as competitors surge ahead. Beyond economics, Acemoglu’s concerns touch human purpose: will AI free us for higher-order work, or sideline us? For leaders, this is a strategic imperative with real-world stakes unfolding now—ignore it, and you’re betting against the future.   

Step 1: Executive Engagement – Setting the Vision

The journey starts with leadership. Executives must align agentic AI with organisational goals, envisioning where it amplifies strengths or automates drudgery. Engage the C-suite to:   

• Map Strategic Priorities: Identify domains—like supply chain or customer service—where AI drives value.
• Establish Governance: Set ethical guardrails and oversight levels, balancing innovation with accountability.
• Champion Collaboration: Build a culture where humans and AI thrive together.

Call to Action: Convene a cross-functional summit by May 2025 to forge an AI vision. Delay risks ceding ground to rivals already moving.   

Step 2: Strategic Play – Crafting the Blueprint

With buy-in, craft a playbook. Acemoglu’s binary oversimplifies—effective strategies blend models by context:

• Low-Stakes Autonomy: AI handles scheduling or data entry with minimal oversight.
• High-Stakes Advisory: AI models M&A scenarios, but humans decide.

Map AI’s role across departments, weighing stakes and outcomes for a tailored approach. 

Call to Action: Task your strategy team with a 90-day plan to define use cases and oversight gradients.

Step 3: Operating Model – Building the Foundation

A robust operating model integrates AI into workflows:

• Technical Infrastructure: Ensure scalable AI support.
• Human-AI Protocols: Define collaboration rules (e.g., when humans review outputs).
• Continuous Learning: Use feedback to refine AI.

Call to Action: Assign an operations lead to blueprint this within six months, starting with a pilot.

Step 4: Deployment – From Vision to Reality

Turn plans into action:

• Pilot Projects: Test AI in controlled settings (e.g., automating support replies).  
• Iterate Fast: Refine rollouts from early wins.
• Monitor Outcomes: Track efficiency, costs, and feedback.   

Call to Action: Launch a pilot by Q3 2025, aiming for measurable ROI by year-end.

Step 5: Prototyping – Pros, Cons, and Lessons

Prototype before scaling:

• How: Using off-the-shelf or custom tools, pick a low-risk use case (e.g., AI inventory forecasts).
• Pros: Validates feasibility, builds buy-in.
• Cons: Time-intensive; early flops may spark doubt.

Call to Action: Start a 60-day prototype, documenting lessons for scaling.

Step 6: Total Cost of Ownership (TCO) – Counting the Cost

AI isn’t cheap:

• Upfront Costs: Software, hardware, training (e.g., $ 50K-$1Mn depending on scope).
• Ongoing Costs: Maintenance, oversight (e.g., $ 20K-$80K/year).
• Hidden Costs: Resistance or ethical missteps.

Offset with ROI from efficiency or revenue. Example: $500K autonomous logistics AI saves $2M in fuel yearly. 

Call to Action: Run a TCO analysis with your pilot.

Step 7: Risks – Mitigating the Downsides

Acemoglu’s warnings highlight risks:

• Over-Automation: Losing control in key areas.
• Ethical Lapses: Bias or unintended outcomes.   
• Competitive Lag: Slow adoption cedes advantage.

Mitigate with governance and agility. Call to Action: Form an AI ethics board by mid-2025.

Step 8: Strategic Play Redux – Refining the Approach

Post-pilot, refine your strategy—adjust oversight, expand use cases. 

Call to Action: Schedule quarterly reviews to stay agile.

Step 9: IT Services Play – Leveraging Expertise

Internal IT may falter—partner with providers to:

• Accelerate Deployment: Tap technical know-how (e.g., Infosys’ $5M autonomous supply chain AI).
• Reduce Risk: Use their governance experience.

Example: Accenture’s $10M advisory AI dashboard for a bank, with $2M/year support. 

Call to Action: RFP a partner by mid-2025.

Step 10: Products Play – Innovating Offerings

AI enhances products:

• Advisor: Salesforce’s Einstein ($1,200/user/year) boosts sales reps.   
• Autonomous: Tesla’s $15K Full Self-Driving bets on autonomy.

Example: A $2,000 CRM with a $500 autonomy add-on hedges both. 

Call to Action: Brainstorm an AI-enhanced product by Q4 2025.

The Acceleration Opportunity

Firms transcending Acemoglu’s binary with context-driven approaches will lead. Programs like AI Risk’s Agentic AI Accelerator fast-track this, blending governance and tech. Hesitate, and competitors learning today will outpace you.

Superloop vs. Aussie Broadband: A Deep Dive into Financial Performance and Growth Strategies

Superloop vs Aussie Broadband

Parameter	Superloop	Aussie Broadband
Revenue	FY23: $323M (192% growth from FY21); H1 FY24: $197.6M (+32.7% YoY)	FY23: $854.9M (144% growth from FY21); H1 FY24: $445.9M (+17.7% YoY)
EBITDA	FY23: $33–36M (+82.2% from FY21); H1 FY24: $23M (+83% YoY); FY24 Guidance: $51–53M	FY23: $91.7M (from $34.8M in FY21); H1 FY24: $46.3M (+12.7% YoY); FY24 Guidance: $116–121M
Free Cash Flow (FCF)	FCF-positive in H2 FY23; H1 FY24 operating cash flow doubled	Strong cash flow in H1 FY24, supporting Symbio deal; specific FCF not detailed
Gearing Ratio	Low; net debt $13.3M, $49M undrawn capacity	Manageable; increased by $262M Symbio deal, offset by $99.8M Superloop share sale
Earnings Per Share (EPS)	Forecast: -0.046 (negative due to depreciation)	Est. ~$0.041 (positive; H1 FY24 net profit $9.8M)
Dividends Per Share (DPS)	None; reinvested in growth	None; reinvested in growth
P/E Ratio	N/A (negative earnings); EV/EBITDA ~6.0	~110 at $4.50/share (market cap ~$1B)
Capital Expenditure (CapEx)	FY24: $20–22M + $5M growth initiatives; FY21: $14.6M	FY23: $47.2M (from $34.5M in FY21); significant fibre and Symbio investments
Debt	Net debt: $13.3M; $100M facility (maturing 2026)	Increased by $262M (Symbio); moderated by $99.8M share sale, $250M facility
Organic Growth	NBN share 2.0% to 3.1% (FY23); 34,100 new customers (H1 FY24)	Residential +15% YoY, Wholesale +53% YoY (H1 FY24); Buddy Telco launch
Inorganic Growth	VostroNet, MyRepublic (FY23); Origin deal (130,000+ customers, $19M EBITDA)	Symbio ($262M, Feb 2024); failed $466M Superloop bid
Strategy Pros	Origin deal boosts wholesale; fibre leverages low costs	Symbio enhances enterprise; $42.7M gain from Superloop shares
Strategy Cons	Acquisition risks, rejected takeover	High debt/CapEx risks; lost Origin contract ($14M EBITDA hit)
Leadership Style	Paul Tyler: Strategic, execution-focused, efficiency-driven	Phillip Britt: Entrepreneurial, customer-centric; Michael Omeros (Symbio CEO)
Growth Style	Mix: Horizontal (customer expansion) + Vertical (fibre/wholesale depth)	Primarily Horizontal (service broadening) + Vertical (fibre investments)
Cloud Ventures	Nascent, growing via wholesale partnerships	Strong via Symbio (cloud voice, UCaaS)
Fibre Ventures	640+ km network (Aus, SG, HK); wholesale focus	Aussie Fibre expansion
Low-Cost Player	Efficient cost structure for competitive pricing	Buddy Telco for the budget segment
Consumer Segment	408,000 customers (H1 FY24, +38.1%); double-digit revenue growth	600,000+ customers (H1 FY24, +15%); stable ARPU
Business/Enterprise Segment	Fibre connectivity +22% YoY (FY21); rising EBITDA	Symbio boosts enterprise, growing EBITDA
Wholesale Segment	60–70% EBITDA growth (FY25 proj.); connections +52.8% (FY23)	+53% growth (H1 FY24); strong EBITDA despite Origin loss

Superloop on track to 1Bn Rev by 2028

Superloops Growth Strategy Analysis

Superloop employs a balanced growth strategy combining organic expansion and strategic acquisitions, with current emphasis shifting toward organic scaling

Growth Strategy Breakdown

Strategy Type	Components	Examples/Evidence	Impact
Organic Growth (Primary Driver)	- Customer acquisition (+62.6% YoY) - Market share gains (nbn up to 6.3%) - Product innovation (FTTP contracts, higher ARPU plans) - Wholesale partnerships (Origin, Leaptel)	- 37,000 net new Consumer customers in HY25 - 30.6% organic revenue growth - $20M marketing investment (FY22-FY23)	Accounts for ~70% of recent growth
Inorganic Growth (Strategic Supplement)	- Targeted acquisitions (Exetel, Uecomm)	- Uecomm acquisition adds 2,000km fibre - Origin migration: 130k customers - Exetel synergies ($5M+/year)	Accelerates infrastructure/customer base growth

Path to $1 Billion Revenue

Current Baseline (HY25):

• Half-Year Revenue: $258.1M 

• Annualized Run Rate: $516.2M

• Growth Rate: 30.6% YoY (organic)

Projections:

Scenario	Formula	Result	Timeline
Organic Only	$516.2M x (1.306)^n	$1.15B	2028
With Acquisitions	Add $50-100M/year from M&A	$1B+	FY27 (2027)

Key Variables:

• Uecomm Acquisition: Adds fibre assets (revenue contribution TBA) 

• New Contracts: Leaptel ($4-5M/3yrs), AV Jennings/Resimax FTTP deals

• Guidance: "Double Down" strategy targets 2x size by FY26, implying ~$800M revenue organically by 2026.

Strategic Catalysts

1. Operating Leverage:

   • EBITDA margins improved to 14.8% (HY25) vs. 10.4% (HY24)

   • Capex discipline: $15M HY25 reinvestment vs. $38.2M EBITDA

2. Market Trends:

   • Challenger brands now hold 19.8% nbn share

   • Consumer migration to higher-margin plans (ARPU growth)

3. M&A Potential:

   • $10.9M net cash position supports accretive deals

   • Focus on EBITDA-positive targets (e.g., Uecomm closes March 2025)

Risks & Considerations

• NPAT Drag: D&A from past acquisitions ($39.1M HY25) delays profitability until FY26

• Customer Concentration: Origin partnership contributes ~20% of HY25 Wholesale revenue 

• Competition: TPG/Vocus aggressively pursuing the same challenger-brand market

Superloop's hybrid model positions it to reach $1B revenue by 2027-2028, with upside potential from strategic M&A accelerating this timeline.

Comparison with Aussie Broadband

Metric	Aussie Broadband	Superloop
Revenue	$588.5 million	$258.1 million
Revenue Growth	6.80%	30.60%
Underlying EBITDA	$65.8 million	$38.2 million
EBITDA Growth	8.90%	66.20%
Net Profit/(Loss)	$12.16 million	($7.8 million)
Gross Margin	$217.6 million	$88.0 million
Gross Margin %	7.50%	28.00%
Customer Base	727,951 (broadband)	664,000
Customer Growth	12.50%	62.60%

Related

Telstras H1FY25 Results - Investors Lens

Aussie Broadband H1FY25 Results: Business & Enterprise Growth Shines

Aussie Broadband H1FY25 Results: Business & Enterprise Growth Shines

Aussie Broadband (ABB) has released its interim results for the first half of the 2025 financial year, showcasing a period of steady growth and strategic expansion. While the residential NBN business continues its upward trajectory, the real story lies in the impressive growth of the business and enterprise segments.

Metric	Result	Significance
Overall Revenue	$588m (+7%)	Steady growth
EBIT	37% increase	Significant improvement
NBN Market Share	7.8% (target 10%)	Shows Aussie's growing market presence
Residential Revenue	$327m (+15%)	Core business remains strong
Residential Gross Margin	31% (slight increase)	Marginal improvement in profitability
Business Segment Revenue	$54m (+13%)	Rapid growth in business segment
Business Segment Customer Growth	~50% over 2 years	Strong customer acquisition
Enterprise & Government Revenue	$47m (+13%)	Expansion into higher-margin segments
NPATA	$22m (+35%)	Substantial increase in adjusted profit
Dividend	4cps (incl. 2.4cps special)	Returns to shareholders
Capital Expenditure	Increased to $75-80m	Higher investment for future growth
Strategic Focus	Shift beyond reselling	Investments in infrastructure and cloud

Key Financial Highlights:

• Revenue Growth:
  • Total revenue increased by 7% to $588 million.
  • Residential revenue rose by 15% to $327 million.
  • Business revenue grew by 13% to $54 million.
  • Enterprise and government revenue also increased by 13% to $47 million.
  • Wholesale revenue decreased by 22% to $56 million.
• Profitability:
  • EBITDA climbed by 16% to $62 million.
  • NPATA (Net Profit After Tax, adjusted for acquired intangibles) surged by 35% to $21 million.
  • NPAT(Net Profit After Tax) rose 6% to $12 million.
• Dividends:
  • The company paid a total dividend of 4 cents per share (cps), including a special dividend of 2.4 cps.
• Capital Expenditure:
  • Capital expenditure guidance increased from $55-60 million to $75-80 million.

Business Segment Performance: A Driving Force

• Business Segment Growth:
  • Revenue in the business segment, serving small and medium enterprises, saw a 13% increase.
  • Customer numbers have grown by approximately 50% over the past two years.
  • This segment's growth is significant as customers tend to adopt multiple products, suggesting potential for accelerated revenue growth in the future.
  • Although the gross margins shrunk marginally to 43%, the large customer growth is very positive.
• Enterprise and Government Segment:
  • This segment, targeting larger customers and utilizing Aussie Broadband's own fiber network, also experienced a 13% revenue increase.
  • Gross margins in this segment decreased to 49%.
  • This is a key area of growth as it means that ABB is moving away from being solely reliant on the NBN network.
• Residential NBN Business:
  • While the residential business saw a respectable 15% revenue growth, the focus is clearly shifting towards the higher-margin business and enterprise segments.
  • The NBN market share is planned to grow to 10% from the current 7.8%.
  • Gross margins in this segment increased marginally to 31%.

Financial Outcomes and Key Considerations:

• EBIT Growth:
  • The 37% increase in EBIT and improved group margins reflect the success of Aussie Broadband's strategy to expand its higher-margin business and enterprise segments.
  • The expected full year EBIT of 90 million dollars, and resulting EBIT multiple of less than 9, shows that the company is currently undervalued.
• Operating Cash Flow:
  • The weak operating cash flow, attributed to working capital requirements, is a point of concern that investors should monitor in future reports.
• Capital Expenditure Increase:
  • The increased capital expenditure guidance indicates Aussie Broadband's commitment to investing in its infrastructure, including fiber network expansion, new IP addresses, and internal cloud capabilities.
  • This investment is crucial for the company's long-term growth and its ambition to become more than just an NBN reseller.

Strategic Direction and Future Outlook:

• Investor Day:
  • Aussie Broadband will host an investor day next month, where further details of its strategic direction will be unveiled. This event will provide valuable insights into the company's future plans.
• Beyond Reselling:
  • The investments in fiber and cloud capabilities suggest that Aussie Broadband is actively working to diversify its services and move beyond its core NBN reselling business.

Conclusion:

Aussie Broadband's H1FY25 results highlight a company strategically positioned for growth, particularly in its business and enterprise segments. While the residential NBN business remains a stable foundation, the focus on higher-margin services and infrastructure investments indicates a clear vision for the future. 

Related

Telstras H1FY25 Results - Investors Lens

Telstra's Dual Strategy: Dividends Rise as Buybacks Begin

Telstra's Dual Strategy: Investor Lens

Telstra's first half FY25 results have delivered a strategic surprise that signals management's growing confidence in the company's financial strength. With a clean 6% increase in underlying earnings, Telstra has not only raised its dividend as expected, but also announced a significant share buyback program. This dual approach to shareholder returns marks a new chapter for a telecommunications giant that has dramatically transformed recently.

Segment Performance: Mobile Leads with World-Class Margins

 
Mobile dominance continues: 

The Mobile division delivered 4% earnings growth, exceeding analyst expectations despite only four months of price increases and disruption from the 3G network shutdown.

Why it matters: 

With Mobile (>40% market share) accounting for over 60% of total EBITDA and maintaining an extraordinary 47% margin (among the highest globally), this segment remains Telstra's crown jewel. The division's ability to grow postpaid subscribers by 48k while experiencing minimal disruption from the 3G shutdown demonstrates operational resilience.

InfraCo exceeds expectations: 

The fixed infrastructure business grew EBITDA by 7% compared to a 2% expectation, with margins expanding to an impressive 62%. 

Why it matters: 

InfraCo's outperformance indicates that Telstra's structural separation strategy is yielding results, creating focused business units that can optimise operations independently.

The fixed segment shows dramatic 

Improvement: Fixed EBITDA surged 74% year-over-year to $183 million, primarily uplift in CS&B  and its digitisation.

Why it matters: 

This historically challenged segment is finally showing signs of stabilisation after years of 

NBN-related headwinds, contributing to a more balanced business portfolio.

EBITDA Growth and Profitability: Transformation Bears Fruit

 
Total EBITDA up 6% to $4.28 Bn, with 6/7 business segments showing growth.
Why it matters: 

The broad-based growth across multiple segments demonstrates that Telstra's transformation isn't dependent on a single division, creating a more sustainable earnings profile.

Return on invested capital (ROIC) reached 8.0%, supported by strong cost performance. 

Why it matters: 

This metric indicates that Telstra is deploying capital more efficiently, a key factor for long-term shareholder value creation and a sign of improved management discipline.

Earnings per share grew 6% to 8.9 cents, supporting the dividend increase.
Why it matters: 

Consistent EPS growth provides the foundation for sustainable dividend increases without compromising the company's financial position.

Capital Allocation: A New Framework Emerges

Management shifts to cash EPS focus for capital allocation decisions, moving away from traditional accounting EPS.
Why it matters: 

This change acknowledges the reality that Telstra's cash flows exceed accounting profits due to non-cash expenses like depreciation on leases, spectrum, and fibre assets.

$750 million share buyback announced, commencing March 12, 2025.
Why it matters: 

While some interpret buybacks as a sign management lacks investment opportunities, they can also indicate management believes the stock is undervalued. With Telstra, the buyback likely signals that management sees the current share price as disconnected from the company's intrinsic value, particularly given the stable cash flows from core businesses.

Capital reallocation to growth areas, including $800 million of capex redirected to mobile over the next four years.
Why it matters: 

This targeted investment demonstrates that while management is returning capital to shareholders, they're simultaneously investing in Telstra's highest-return business to maintain network leadership.

Cash Flow and Debt Position: Room to Maneuver
Full-year free cash flow guidance of $3.0-3.4 billion implies a free cash flow yield of nearly 4.5%.
Why it matters: 

This strong cash flow generation supports both dividends and buybacks while providing flexibility for strategic investments.

Gearing ratio of 2.16x at FY24, with projections to decrease to 2.0x in FY25.
Why it matters: 

Telstra maintains headroom under both its own "comfort zone" debt ratio (1.5-2.0x) and rating agency thresholds, providing flexibility for additional capital returns without jeopardising its financial position.

Potential for $2.25 billion in cumulative share buybacks through to FY28 as a base case, according to a leading analyst
Why it matters: 

The multi-year buyback capacity indicates sustainable financial strength rather than a one-time return of capital.

Dividend Strategy: Sustainable Growth Ahead

Dividend increased to 9.5c from 9.0c per share, a 6% increase.
Why it matters: 

Dividend increases typically support share price appreciation by attracting income-focused investors and signalling management confidence in future cash flows.

 
Potential for dividend to reach mid-20c range by FY28, limited primarily by franking credit generation.
Why it matters: 

This long-term dividend growth trajectory provides investors with visibility into future returns, supporting the investment case for patient shareholders.

 
Dividends currently exceed EPS, but are supported by superior cash flows.
Why it matters: 

This highlights the importance of Telstra's shift to cash EPS for capital allocation decisions, ensuring dividend sustainability despite accounting metrics suggesting otherwise.

Asset Monetisation: Reducing Complexity and Information Asymmetry

Sale of Ventures business completed, with proceeds reflected in the first half cash balance.
Why it matters: 

Divesting non-core assets simplifies Telstra's story for investors, reducing the information asymmetry that often leads to valuation discounts for conglomerates.

 
Foxtel sale in progress, not yet reflected in cash balances.

Why it matters: Beyond the immediate cash proceeds, divesting media assets allows management to focus on core telecommunications infrastructure, where Telstra has sustainable competitive advantages.

 
Portfolio restructuring continues, with the NAS division identified as a focus area.
Why it matters: 

This ongoing portfolio optimisation process suggests management is continuously evaluating where Telstra can create the most value, rather than maintaining legacy businesses for size alone.

Future Growth Catalysts: Beyond the Core

 
Accenture's partnership to develop AI capabilities, with $700 million investment primarily focused on cost reduction rather than revenue growth.
Why it matters: 

This strategic initiative demonstrates management's willingness to invest in emerging technologies with clear ROI metrics, rather than pursuing technology for its own sake.

Intercity fibre rollout progressing, with seven routes under construction and the first two (Sydney-Canberra and Melbourne-Canberra) expected to be ready in late 2025.
Why it matters: 

These new routes position Telstra to capitalise on growing demand from hyperscalers and the AI industry, representing a strategic pivot toward higher-growth market segments.

Mobile ARPU expected to benefit from the full-period impact of price increases in 2025.
Why it matters: 

This pricing power demonstrates Telstra's dominant market position (>40% market share) and ability to translate network quality into financial returns.

 
Investment Thesis: 

A Transformed Telstra. Telstra has completed a remarkable transformation, evolving from a clumsy giant with unfocused international ambitions to a streamlined, efficient telecommunications infrastructure business. With industry-leading margins in mobile, growing infrastructure returns, and a disciplined approach to capital allocation, today's Telstra offers investors exposure to stable cash flows with modest growth potential. The combination of dividend growth and share buybacks creates a compelling total return proposition in an uncertain economic environment. While the stock may never generate the same level of excitement as high-growth tech names, its 4.5% free cash flow yield and clear path to higher dividends make it a worthy consideration for income-focused portfolios. 

As management continues to monetise non-core assets and reinvest in high-return businesses, Telstra appears well-positioned to deliver sustainable shareholder returns while maintaining the financial flexibility to respond to industry shifts. The upcoming investor day later this year is expected to provide further clarity on Telstra's strategy through 2030, potentially catalysing additional investor interest in this transformed telecommunications leader.

source: AFR, Telstra, WSJ, Reuters, Yahoo Finance

How DeepSeek's Challenge Actually Strengthened NVIDIA's Market Position

How DeepSeek's Challenge Actually Strengthened NVIDIA's Market Position

The emergence of DeepSeek, a Chinese AI startup, initially sent shockwaves through the market, raising fears of disruption to NVIDIA's dominance in the AI chip market. DeepSeek's claim of developing an advanced AI model with significantly lower computing costs triggered a sharp market correction, wiping out nearly $750 billion from NVIDIA's market capitalization in a week. However, this seemingly negative event has, paradoxically, strengthened NVIDIA's long-term market position.   

The Initial Shock and the Correction:

The initial market reaction was swift and decisive, with NVIDIA's stock price dropping by 6% while the Nasdaq remained relatively flat. This correction, while painful in the short term, has resulted in a more attractive valuation for NVIDIA. The forward P/E ratio has compressed from a lofty 40x six months ago to a more reasonable 32x. This reset makes NVIDIA more appealing to investors seeking a balance of growth and value.

Beyond the Headlines: Customer Spending Speaks Volumes:

While the market reacted to the DeepSeek news, the actions of NVIDIA's largest customers tell a different story. Amazon, Meta, and Alphabet, the very companies that would be most likely to benefit from a cheaper alternative to NVIDIA's hardware, have all announced massive increases in capital expenditure for AI infrastructure. Crucially, they've all reaffirmed their strong partnerships with NVIDIA. This demonstrates that despite the emergence of potentially competitive solutions, NVIDIA remains the preferred and trusted provider for these industry giants. Amazon's commitment of $100 billion in capital expenditure for 2025, with a significant portion earmarked for AI infrastructure, is a powerful testament to this reality.   

Financial Metrics Tell the Tale:

The financial impact of the DeepSeek event, coupled with continued customer spending, paints a compelling picture for NVIDIA:

• Valuation Reset: The stock price correction has created a more attractive entry point for investors.
• Sustained Growth: Despite the lower P/E ratio, NVIDIA's projected revenue growth of 53% significantly outpaces its mega-cap peers, who are expected to average around 12.2%.
• Unwavering Customer Commitment: The substantial investments in AI infrastructure by major tech companies underscore NVIDIA's indispensable role in their AI strategies.
• Dominant Market Share: Projected data center revenue of $113 Bn for the fiscal year further solidifies NVIDIA's market leadership.

Navigating the Blackwell Transition – A Short-Term Hurdle:

While the transition to the Blackwell chip family presents a potential short-term challenge, with some analysts predicting a slowdown in growth during this period, NVIDIA's CEO has stated that production is "in full steam." The anticipated high-volume shipments in the second half of the fiscal year should mitigate any negative impact and pave the way for continued growth. The lowered market expectations due to the DeepSeek news could actually work in NVIDIA's favour if they manage to exceed forecasts.

The DeepSeek Silver Lining:

The DeepSeek episode, rather than being a threat, has served as a valuable market correction, bringing NVIDIA's valuation down to more sustainable levels while simultaneously highlighting the company's fundamental strengths. It has reinforced the fact that even with advancements in AI model efficiency, the demand for high-performance computing infrastructure remains robust. The incident has also provided a stress test for NVIDIA, demonstrating the company's resilience and its deep entrenchment within the AI ecosystem.

Looking Ahead:

NVIDIA's future prospects remain bright. The company is poised to capitalize on the continued explosive growth of AI, driven by its technological leadership, strong customer relationships, and dominant market share. The DeepSeek challenge, while initially perceived as a threat, has ultimately served to strengthen NVIDIA's position, creating a more compelling investment case and solidifying its role as the backbone of the AI revolution.