Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
The AI rally is only starting for Nvidia, as UBS projects its AI rack capacity rising from 7.5 GW in 2025 to 50.5 GW in 2030. As @KyleReidhead notes, Nvidia's share falls from about 65% to 48% as custom chips grow, but the total market expands roughly 9x to 104.5 GW, so a slightly smaller slice of a far bigger pie is still a monster. x.comÂ
Enterprise and neocloud demand is creating a second wave of AI infrastructure spending, with tailwinds for Nvidia and Super Micro. Dell forecasts 200 GW of AI data center growth through 2030, half driven by these customers, and estimates a $1 trillion AI infrastructure opportunity over the next four years. AI servers could enter a new growth phase in 2027, with higher shipment volumes and more revenue per deployment. x.comÂ
Nvidia's capacity commitments argue against AI orders drying up soon. Its filings show mostly memory and manufacturing commitments rising from $119 billion to $279 billion in one quarter, with about $175 billion covering 2027-28. Fewer new data-center projects could reflect power, land and building bottlenecks rather than weaker demand; a mid-teens multiple still reflects a fair worry that profits may not last. x.comÂ
Nvidia's AI profits are real, but its compute demand depends heavily on fragile venture funding. Per Chamath, 1% of firms account for 90% of AI spending, and 72 cents of each dollar comes from unprofitable VC-backed firms. Venture money passes through startups to Nvidia and cloud suppliers; if the next raises fail, concentrated orders could contract together. x.com x.com x.comÂ
More AI tokens mean more compute demand for Nvidia even as pricing power starts to slip. OpenRouter data via the FT show weekly token use up ~250-fold since January 2025; the FT links the surge to agents' long call chains. Bloomberg's breakdown of a 1 GW AI campus that could cost roughly $30B puts well over half the bill in chips and servers, most landing at Nvidia as GPU racks. Servers wear out in 5-6 years, making AI capex a recurring chip refresh. x.com x.com x.com x.com x.com x.com x.comÂ
AI data-center spending should reach chips first, then racks, power and cooling, benefiting Nvidia, AMD, Vertiv, Bloom Energy, Credo, Marvell, Lumentum and Micron. BofA forecasts the global data-center market at about $1T in 2026, $2.1T in 2028 and nearly $3T by 2030, a 37% annual rise; roughly 80% of a new AI site's $57M per MW cost goes to servers, networking and storage. x.comÂ
Nvidia's ballooning future commitments relative to its revenue evoke Enron. Per Gary Marcus, citing Fortune and Nvidia's 10-Q, second-quarter revenue was $96 billion while future commitments total $366 billion, led by $279 billion of supply and capacity commitments, up from $119 billion a quarter earlier, plus cloud service agreements, data-center leases, equity investments and capex commitments. x.comÂ
Nvidia's CUDA retains developers, putting it among 12 stocks that could dominate the decade ahead. Nebius's GPU rental price rise signals demand; Fabrinet and Credo supply AI connectivity. DraftKings has betting scale; Microsoft has Azure and an OpenAI partnership; Figma anchors design work; Shopify powers stores. TeraWulf pivots power sites to AI leases; Constellation, the largest US nuclear operator, signs big-tech power deals; Meta spends on AI; Uber has autonomous-vehicle partnerships. x.com … Show more
AI infrastructure bottlenecks could give eight stocks as much as 18x upside. Nvidia supplies frontier-model GPUs; Broadcom and Marvell supply custom silicon and networking; TSMC makes advanced chips; Micron supplies sold-out HBM; Vertiv provides power and cooling; Palantir monetizes enterprise AI; Alphabet spans TPUs, research, cloud and apps. The list tracks where AI infrastructure spending is flowing. x.com x.comÂ
Nvidia could become the weakest link in AI's circular financing economy as it takes on more customer risk. It is turning to insurers to cover customers' GPU debt, and if insurers require Nvidia to keep backstopping deals, its liabilities will keep growing on top of $245B of supply chain commitments and prepayments as of last quarter. Such large counterparty conflicts are unwise. Amazon is also looking to move $8B of Nvidia Blackwell GPUs into an SPV to take on more debt for its AI buildout. … Show more
Anthropic's customer growth gives AI compute suppliers firmer demand evidence than capacity plans. Its S-1 reports $16.3B in H1 2026 revenue and about 900% net retention as of September 30, the strongest evidence yet of adoption. Over $500B in commitments include a roughly $125B five-year Broadcom equipment lease plus Amazon, Google and Microsoft arrangements; Nvidia GPUs are in its mix. Long-term obligations could outlast usage revenue. x.comÂ
