AI compute and memory trade remains undervalued
The guest argued that the AI infrastructure build-out is not a bubble, as massive revenue growth from hyperscalers and AI labs justifies current valuations for compute and memory providers.
The argument
Brad noted that OpenAI and Anthropic's combined revenue scaled from $30 billion to $80 billion in a matter of months, validating the ROI on infrastructure. He highlighted that key memory and tech players are trading at highly reasonable multiples relative to their growth, such as Micron at 7x and Nvidia at 19x.
The thesis, stress-tested
✓ What validates it
- ✓Hyperscalers reporting continued double-digit cloud revenue growth in upcoming quarters
- ✓AI labs demonstrating sustained revenue scaling
▸ Risks discussed
- ▸Hyperscaler capital expenditure could slow down if end-user ROI fails to materialize in the longer term
- ▸Geopolitical tensions or supply chain disruptions in semiconductor manufacturing
Hear it yourself
"And by actually landing a bunch of terrestrial capacity, I think you start to blunt that Because you can now start to say that even if the orbital data centers get delayed by a few months or a few quarters, even if the technological derisking of it takes longer, he now has a structural core business that will effectively subsidize his ability to train Grok, which I think is a really important and underreported theme. So you have all this infrastructure. He somehow saw the tea leaves before most people. He built to a level of scale and secured power before most people."
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