Dan Niles
Founder & Portfolio Manager of Niles Investment Management
Nvidia's higher token output per watt could win it share as access to power becomes a bigger constraint, according to Nvidia. The market expects further share losses to ASICs, helping explain its 15x calendar-2027 P/E; a small sentiment shift could expand the multiple. Nvidia remains especially attractive paired with shorts in semiconductors and should outperform the sector through its November 19 earnings. x.com
Nvidia is the best risk-adjusted AI trade now. It trades at 15x CY27 earnings for guided 70% revenue growth, which could be revised higher at mid-November results, and new demand drivers include OpenAI's Dots and Google's Argon model. Macro risk argues for prudence: the Fed is hiking with inflation above target and oil high, a mix behind five 20-50% S&P selloffs since the 1970s, so favor AI infrastructure with smaller positions and more cash. x.com
Dow Jones
Real-Time Financial News Wire
"Intel describes 2027 as an investment year, but even with the high capital spending requirements, it is clear to us that it will lose share to fabless competitors that have no such requirement, with AMD, NVIDIA, Graviton and Axion all materially outgrowing Intel's 30% market growth rate in CPU next year," the analysts write. tradingview.com
AlvaSupportsMorgan Stanley expects Nvidia and other fabless CPU competitors to materially outgrow Intel's projected 30% market growth in 2027, supporting Nvidia's relative earnings appeal and the semiconductor short leg.Kay Haigh
Head and CIO of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management
The move started in the fixed income markets and the move was driven by the sheer amount of issuance that was coming to the market. ... Investors figured out pretty quickly that it wasn't just a question of pricing the underlying risk, but it was much more the question of pricing capacity and balance sheet as to how much of this risk could really be digested in a short period in the market. And the result of that was spread widening. podcasts.apple.com
AlvaChallengesHeavy issuance straining investor balance-sheet capacity and widening spreads raises financing costs for the AI buildout, adding risk to the investment cycle supporting Nvidia's demand.
Hedgie
Financial Markets Newsletter and Commentary
Bloomberg says the bank is in early talks with insurers who would cover part of its losses if borrowers default. Barclays wants to hand off more than half the risk on some of its own AI loans. Some insurers are already close to the most data center risk they’ll take x.com
AlvaChallengesReported bank efforts to transfer AI-loan risk, alongside insurers approaching exposure limits, support the concern that data-center financing could become costlier or harder to obtain.
Reuters
Global News Agency
An important consideration is whether older silicon, by dint of being less energy-efficient, is simply uneconomical to keep running. ... A more plausible outcome is that the pace of technological improvement accelerates, old kit becomes a great burden and depreciation schedules shorten, leading to less profit. tradingview.com
AlvaChallengesThe argument that faster technological progress could shorten GPU depreciation schedules and reduce customer profits raises a risk to the returns underpinning continued AI infrastructure spending.
Sravan Kundojjala
Semiconductor Industry Analyst at SemiAnalysis
Tokyo Electron QSep26 ... - Full-year FY27 is now $23.3B (+44% y/y in USD) ... - 2H SPE guided to $9.9B, +24% h/h; Memory grows to 49% of the mix (DRAM 35%, NAND 14%) from 43% in 1H x.com
AlvaMixedA $23.3 billion annual revenue outlook and 24% sequential growth in second-half process-equipment sales reinforce chip-capacity investment while strengthening an equipment supplier's earnings outlook, challenging the semiconductor short leg.Sravan Kundojjala
Semiconductor Industry Analyst at SemiAnalysis
[Intel] ASIC revenue was up > 50% q/q and >2x y/y; tripled over the last three years and is guided to triple again over the next three x.com
AlvaChallengesASIC revenue more than doubling year over year, with guidance to triple again over three years, strengthens custom-silicon competition and the growth outlook for a semiconductor peer.Sravan Kundojjala
Semiconductor Industry Analyst at SemiAnalysis
MediaTek 4Q26 ... - 2027 ASIC is now at the high end of the $16B target (20% of the AI ASIC TAM) x.com
AlvaChallengesA 2027 ASIC revenue outlook at the high end of a $16 billion target strengthens the case for substantial custom-chip adoption competing with Nvidia.
Silicon Data
Compute-Market Data & Analytics
Since May, the throughput a GPU must deliver to cover its rent from open-weight tokens has risen 25–83%, faster than steady software gains typically add, so margins for inference providers renting GPUs have likely compressed, while GPU owners have captured the gain through higher rents. x.com
AlvaMixedA 25–83% rise in break-even throughput supports GPU owners' pricing power while suggesting compressed margins for inference providers renting on demand, adding customer-economics risk to Nvidia's demand outlook.
The Transcript
Weekly Earnings-Call Quotes Newsletter
$GOOGL CFO: "Google Cloud's backlog was $561 billion in Q3, with the majority of the backlog related to typical GCP contracts. We expect to recognize just over 55% of the total backlog as revenues over the next 24 months... x.com
AlvaSupportsExpected recognition of over 55% of a $561 billion cloud backlog within two years strengthens the contracted-demand backdrop for continued compute infrastructure investment.The Transcript
Weekly Earnings-Call Quotes Newsletter
Kioxia Holdings: ... —Q3 revenue & profit expected to reach record highs for the fourth consecutive quarter ... —Kioxia's entire CY2027 production capacity is already sold out x.com
AlvaChallengesSold-out 2027 capacity and another expected record quarter strengthen the earnings outlook for a storage-chip supplier, challenging the semiconductor short leg.
Erin Griffith
Technology startups and venture capital reporter at the New York Times
Companies are trying to pull back on how much they're spending on tokens because they realize that token maxing got out of control. The growth is slowing, and they're getting some competition from open source models or cheaper options. I think in q three, they grew 44%. That's a significant slowdown from gangbusters growth down to great growth. dts.podtrac.com
AlvaChallengesReported Q3 growth slowing to 44%, alongside customers curbing token spending and considering cheaper models, raises demand risk behind Anthropic's large compute commitments and Nvidia's growth outlook.Reuters
Global News Agency
Tsai said demand for its first AI accelerator remains strong, with initial shipments starting last month to generate $2.5 billion of revenue in Q4 ... For the second AI accelerator project, high-volume production is on track for Q1 of 2028, he said tradingview.com
AlvaChallengesA first accelerator ramp forecast to generate $2.5 billion in Q4 revenue and a second project targeting volume production in Q1 2028 strengthen the competitive threat from custom AI chips.
Bloomberg
Business and Financial Information and News Platform
Tokyo Electron gave an annual outlook that beat estimates in a sign of faster-than-expected spending by chipmakers hurrying to meet AI hardware demand x.com
AlvaMixedAn above-consensus annual outlook tied to faster AI-driven chipmaker spending reinforces infrastructure demand while strengthening semiconductor equipment suppliers, complicating the sector short leg.Dow Jones
Real-Time Financial News Wire
Amy Robinson ... calls herself neutral on stocks but similarly sees risks in AI-related companies' strategies and their shares. Robinson calls Nvidia the market's most overvalued stock, saying its investments in customers remind her of the circular vendor financing of the dot-com era. tradingview.com
AlvaChallengesThis challenges the thesis's case for Nvidia to outperform: customer financing that resembles dot-com-era circular financing raises concerns about the durability of AI demand and Nvidia's valuation.
Vice President JD Vance
50th Vice President of the United States
"If you’re building a data center, you have got to give back into the grid, not take out of it... ... local communities determine whether a data center goes in or not. If we follow those principles I think that we will get this right." x.com
AlvaMixedThe administration's stated preference for data centers to contribute to the grid and secure local consent reinforces power and permitting constraints, potentially increasing efficiency's value while adding deployment hurdles.Kunjan Sobhani
Senior Semiconductor Analyst at Bloomberg Intelligence
At least from what we have seen so far, it looks to me that, you know, the data center, which was upbeat, is looking strong, but they cannot get enough supply there to sell more into the data center. ... Remember, data center products, the more they ship right now, it's a headwind for gross margin because it's a lower gross margin. podtrac.com
AlvaMixedStrong but supply-constrained Intel data-center demand supports the compute backdrop, while the analyst's view that additional shipments dilute gross margin supports the semiconductor short leg.Anurag Rana
Senior Technology Analyst at Bloomberg Intelligence
They're expecting AWS sales to be above 40% into 27 and 28. I think that's a very, very strong number given where we are in the cycle. podtrac.com
AlvaSupportsProjected AWS growth above 40% in 2027 and 2028 strengthens the forward demand backdrop for continued compute investment and Nvidia's calendar-2027 earnings.Reuters
Global News Agency
NVIDIA IS IN TALKS TO PROVIDE NSCALE WITH BILLIONS IN CREDIT GUARANTEES FOR DEBT TO DEVELOP A 460-MEGAWATT DATA CENTER - THE INFORMATION tradingview.com
AlvaMixedThe Information reports unconfirmed talks for Nvidia to guarantee billions in Nscale debt for a 460-megawatt data center, potentially enabling infrastructure demand while adding credit exposure.
Amazon.com, Inc.
E-Commerce, Cloud Computing (AWS) and Digital Advertising Company
The majority of Bedrock today is being run on top of Trainium. ... We really like the price performance that we're getting.
AlvaChallengesTrainium is already powering most of Bedrock, and Amazon says its price performance is attractive; that supports the risk of share shifting to custom silicon.
Fireside Alpha
Business, Technology and Investing Interview Digest
$AMZN CEO Andy Jassy explains why AWS can see its growth into 2029: ... And so we have very good visibility into ‘27 and ‘28 and some of ‘29 too, with respect to what customers want in those really big chunks of capacity. x.com
AlvaSupportsAdvance reservations for large capacity blocks give AWS demand visibility into part of 2029, strengthening the durability of compute investment behind Nvidia's earnings outlook.