Arrakis Global
Global Thematic Fund Manager
Constellation Energy, Talen, NRG and Modine look weak because of the data-centers-in-space narrative. Once the first big solar-powered rack of GPUs reaches orbit, the market will react and cooling names will crash too, whether or not many space GPUs arrive this decade. @InvestsCletus adds that regulatory hurdles to deals between existing power plants and data centers also weigh on these names, while distributed-generation builders like Bloom Energy stay strong. x.com x.com x.comÂ
Global resistance to data centers could constrain December cloud growth despite the longer agentic AI buildout. Some estimates say roughly 120 US projects worth over $130B face delays; opposition spans the UK, EU, Australia and Malaysia too. Microsoft, Alphabet and Amazon remain favored, though guidance is at risk. CoreWeave, Nebius and IREN may bounce hardest short term but look weak longer term as funding tightens; Elon Musk expects extensive neo-cloud consolidation. x.com x.com x.com x.comÂ
SpaceX's exclusive use of Nvidia GPUs and other supply constraints make Musk's 13-20 GW operational compute forecast for end-2027 too high. A substantial buildout is still incredibly enticing, but reaching that scale likely requires cheap capacity from struggling neoclouds, mostly through capacity deals and some acquisitions. Its attractive $40B off-balance-sheet GPU lease deal is only a drop in the bucket of the debt needed. Capacity can still grow quickly over time. x.com x.com x.com x.com … Show more
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
Orbital data centers may take far longer than investors expect, if they happen at all. SpaceX sells compute on Earth and invests in power and cooling there, widening the hype-reality gap. SpaceX, Rocket Lab, AST SpaceMobile and Redwire could be dead money for years while the vision catches up. x.comÂ
Accelerating compute demand could drive a V-shaped recovery in beaten-down neocloud stocks if SpaceX earnings confirm it. Nebius, CoreWeave and IREN are on watch. GPU spot rates rose rapidly: H100s $3.34/hour, H200s $4.93, B200s $8.13. Nebius had $582M Q2 revenue, nearly 6x YoY; CoreWeave a $129B backlog early in Q3; SpaceX 1.4 GW compute capacity last quarter, up from 400 MW a year ago. Whether SpaceX converts demand into meaningful revenue and EPS beats remains the key question. x.comÂ
AI's electricity shortfall creates a massive opportunity for companies solving the power bottleneck. Morgan Stanley estimates a 32 GW US data-center power shortfall by 2028. Constellation Energy and Vistra are nuclear names, Bloom Energy in fuel cells, GE Vernova in power generation and Eaton in grid infrastructure. x.comÂ
Electricity is a clear bottleneck for AI, favoring AI-focused power and data-center infrastructure names over residential utilities. The US could be short 107 GW to power data centers through 2029, while China adds capacity year after year. Medium-term preferences are Cipher, Hut 8, Riot, TeraWulf, Galaxy, Equinix, Bloom Energy, Solaris, Vistra, GE Vernova, INIO, Williams, Liberty Energy, EROC and Cummins. x.com x.comÂ
AI's biggest bottleneck is power and cooling, not memory, making Vertiv, GE Vernova, Bloom Energy and Eaton buys. Musk expects a prolonged compute shortage; Nvidia, Broadcom, Micron, SK hynix, TSMC, Arista, AMD, Marvell, Credo, Lumentum, ASML and Astera Labs could benefit massively. Grok Bot's 800,000 paid weekly users have more than doubled in a month; Musk says agents could eventually use more compute than any other part of SpaceX's Super Intelligence business, benefiting Dell and Sandisk too. … Show more
AI data-center spending flows beyond GPUs and operators into networking, optics, power and cooling. Nvidia, AMD, Broadcom and Marvell supply chips; Arista, Nokia and Credo connectivity; Applied Optoelectronics and Lumentum optics; Vistra, Constellation and Bloom power; Vertiv and Modine cooling. Meta's $140B spending this year illustrates the scale, per a commenter with whom the point is agreed. x.com x.comÂ
Scarce compute could ease financing for neoclouds such as Nebius and CoreWeave by shortening capex payback. Elon Musk says SpaceX's new deployments pay back in less than a year at current pricing; that bodes well for other neoclouds facing financing concerns if they achieve similar economics. GPU rental rates keep hitting highs, contrary to Gartner's claim of oversupply. x.com x.com x.com x.comÂ
