GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Vera Rubin's 10x throughput relieves the constraint that has gated 2025-26 hyperscaler capex, changing the capex math for Nvidia, Tower Semiconductor and chipmakers broadly. The backlog it clears, not the product itself, is the play. A post the author replies to says Vera Rubin is in full production, with a supply chain twice the size of Grace Blackwell's and adoption by Dell, HPE, Microsoft Azure, Oracle, CoreWeave and Lambda. x.comÂ
The semiconductor sell-off after Friday's hot jobs report is a discount-rate sale, not a change in AI demand. Payrolls of 172,000 doubled the 85,000 consensus, killing a near-term Fed cut; the 10-year hit 4.55% and the 30-year topped 5%. AI infrastructure is the longest-duration trade, so it sold first and hardest, but earnings power did not move, leaving bottleneck chip names mispriced beside speculative ones. A soft CPI would re-rate them fast; hot data would reprice the AI trade anyway. x.com x.comÂ
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
A rising value of compute per watt should benefit AI cloud, chip, connectivity and power suppliers. Elon Musk says that value will rise over time. Nebius has Microsoft and Meta deals; Marvell benefits from custom silicon demand; Credo connects GPUs; Vistra has long-term nuclear supply deals with Amazon and Meta; Nokia's Nvidia partnership could help it capture data-center networking growth. x.com x.comÂ
Semiconductor trade faces a capex growth ceiling even if AI delivers what bulls expect. Spending cannot compound at 70-100% a year indefinitely, and compute per dollar roughly doubles every two years, so the same budget buys more capacity later. Today's chip valuations also demand years of 20% AI earnings growth beyond 2028: roughly 10.9 extra years for AMD, 8.9 for ASML, 7 for Marvell and 6.4 for TSMC, versus 1.6 for Broadcom and 0.8 for Nvidia; Micron needs none under the chart's assumptions. … Show more
Semiconductors could stay undersupplied for a long time as more capable AI per dollar creates more uses and drives compute demand. Micron and NVIDIA trade at low forward P/Es because investors fear peak cyclical earnings, yet current earnings show no slowdown. Shortages may worsen as AI adoption spreads, though the industry could remain cyclical; a reversal of the forced rollover trade is hoped for, not assured. x.com x.com x.comÂ
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 faces a market-wide selloff once a slowdown or halt in hyperscaler capex growth is confirmed. Whether non-hyperscalers absorb some of the excess supply, despite 52-week GPU wait times raised in a reply, is immaterial to that reaction. x.comÂ
Semiconductors could capture scarce spot compute's value if its forward curve holds. Compute trades in deep contango, while chip stocks price in little of that value; near-term moves are unpredictable. That makes the sector very bullish. The earlier lab-funding risk looks less acute: Anthropic should hold nearly $200B cash after its IPO and is operating-cash-flow profitable. Even with 2029 capex cuts, chips look cheap if future buyers do not default. x.com x.com x.com x.com x.comÂ
Rapid revenue growth against forward valuations makes Nvidia and Micron additional calculated risks after the selloff, alongside Meta, Broadcom, IREN, Vistra, Nokia and Oracle. Nvidia grew revenue 106% and guides Q3 to $108B, plus or minus 2%, at 17.5x forward earnings; Micron grew revenue 379% to $54.2B, guides $61.5B next quarter and trades at 5x. The other six retain their growth, contracted-demand or customer-order cases. x.comÂ
Nvidia and other accelerator makers now face a finite semiconductor profit pool and must fight their supply chains for incremental gross margin, pushing down dollars per GW after years of inflation. Economic surplus needs to move from silicon to users; otherwise the inflation from semis and backlash against data centers will lead rate markets and policy to end this trade. Expecting $150-175B of AI lab ARR to justify $1T+ of capex sounds insane. x.com x.comÂ
AI security rules could shift frontier inference into monitored data centers, lifting demand for AMD and Nvidia chips and Micron and SanDisk memory. Agents attacked 400+ banks; US labs cut off abusive users, unlike downloaded open weights. Licensing is a forecast, and these four look undervalued at today's closes. Meta lists $356B in future leases and $455B in other commitments, mostly cloud capacity such as CoreWeave and Nebius plus equipment; those recipients are being sold off. x.com x.comÂ
