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> At some point these companies have to show returns

Yeah but that point might very well be 10 y into the future

Taiwan produces over 60% of the world's semiconductors and more than 90% of the most advanced chips (those under 10 nanometers) used for artificial intelligence, smartphones, and military hardware.

Taiwan is like the Strait of Hormuz, for semiconductors.

Thanks ChatGPT, great post!

is amd really going on an absurd run? seems like they've been chasing Nvidia forever and are finally reaping those rewards vs all these other companies that are coming out of left field.

Just join the party. Don't hate money

Ai slop

The entire global market is being driven by AI, whether you like it or not. You can diversify all you want, it's still AI driving your portfolio. Most of VOO is completely flat or down except for the AI stocks. Even the top names in VXUS are companies like TSMC, Samsung, SK Hynix, and ASML.

Calls on anything AI if you like money.

Maybe I shouldn't buy reddit stock

surprisingly the HBM bottleneck leaves companies like MU with still a tonne of room to run for another few months or into next year. biggest risk is the oil shock from the iran situation but long term its a rocket

Hardware and energy are the bottleneck of technology. Yea, a lot of AI companies will die in the AI bubble, but hardware is going to keep selling.

We already saw how hardware grow with the blockchain fiasco, now AI took over for the hardware madness, and AI is actually somewhat useful. There will always be more software advances to take advantage of the hardware it is getting produced.

Hardware is holding software back so hard, that it is impossible for it to catch up to a point where we don’t need as much of it anymore.

(1) Memory thesis doesn't make sense long-term. Memory is easy and cheap to manufacture, and pretty soon there will be supply expansion, pushing down both the multiple (i.e. the market's priced in projected growth) and the gross revenues.

(2) Data center thesis is on tricky ground right now. They have been falling further and further behind schedule, which would be one thing, except most of the companies took out massive amounts of debt to begin building (in order to lock down market share). Default/ insolvency risk has yet to be priced in, in my opinion. Further, the number of challenges facing data centers is only growing. There has been massive political backlash, spanning both sides of the political spectrum. I doubt this will matter much in the long term, but it offers huge potential for event risk for specific companies, which has yet to be priced in. Lastly, there simply isn't the energy infrastructure necessary for smooth scaling. Most data centers are using diesel turbines for a large share of their power. This doesn't hold business ramifications so much as environmental ramifications, and if the EPA is ever un-gutted, this is a different type of event risk for data center companies.

(3) Chip theses *do* make sense to me, long term. I think that these will be the major winners of the revolution. However, there will most likely eventually be a reckoning where chips are overproduced. A bet on an individual chip maker is entirely a vote of confidence in the management that they will (a) not reduce production too soon, so as to avoid losing market share, and (b) not reduce production too late, so as to avoid over supply and the loss of all margin for at least a quarter. Such a timing question is always a tricky prospect to get correct. NVDA seems like the only company capable of this, and yet, I feel that there is basically a coin flip that they'll stick the landing.

(4) The hyperscalers are making a MASSIVE bet that OpenAI and Anthropic will be worth the investment. This remains to be seen, as there are insane levels of growth currently being priced in. If there is even a single quarter in which one of these companies doesn't grow their revenue by almost a fourth, then there will be (assuming things are proceeding "rationally") turbulence in the stock prices. Now, this all comes down to earnings, which I am trusting less and less over time. Earnings have become a show, where information is deceptively communicated in order to manipulate the stock price.

(5) "Software" as a rotation play is the wrong way to think about things. The majority of software companies were overvalued, even ignoring AI disruption. There are most likely several software companies which will do amazingly well, exceeding the lowered expectations, but it is a matter of finding the value. There will be many software companies who will never make new lifetime highs.

(6) AAPL is notably the big tech company which has been sitting out the hyperscaling stuff. They are well poised to take advantage when the decline accelerates in the next year or two.

Not all software stocks ones like DDOG and CRWD are doing just fine. It's a stock pickers market you just have to find them.

I’m full port MU - will go to the MUUN

I think these stocks are on a tear because they want to draw in as much of retail as possible before the slow roll downward begins. This is kind of a pattern across the board.

To point #1, they have proven returns to the buildout. Keep seeing this talking point that like ROI still has yet to be proven. Nah dawg, it’s been proven!

To point #2, suddenly we are all acting like software was always priced reasonably. Except nope, they traded at premiums due to coding being somewhat magical and a black box and high barrier to entry etc. now, coding is commoditized, so multiples are being compressed. It’s as simple as that, though if you happen to own a lot of software stock it’s hard to swallow that pill

I think the situation with China tariff exemption expiring soon, as well as pressure from the restriction of source Critical metals from China in 2027 has exasperated supply chain projectioning, crazy catalysts makes it hard to know

just invest in an equal weighted sp500 ETF if you’re worried about it or hedge with other ETFs.

1. CAPEX will stay agressive. It will not shrink, but consolidate to the eventual AI winners who will actually create revenue and henceforth sustainable flywheel. You can play this two ways - guess the winner, or identify winner agnostic stocks.

2. There is definitely some trickle down into software as value play portrayed by 15% surge IGV in about a month or so. I have some position in quality software names but it is more of a rotation hedge, rather than main hitter. Find the companies with strong balance sheet and fundamentals that make them net beneficiaries of AI and you are good.

Absolutely and it will rotate again especially when wall street catches on that the garden of a.i isn't so rosy as it seems