Speaker

And yet, despite the dot com boom and bust the Magnificent 7 now have a market cap 1.8x that of Europe. A similar issue is arising with AI where the macroeconomic data is not yet equipped to capture the value produced by AI

Peak+0.2%

MSFT/long/semianalysis

Captured AI value accrues to firms with market power who hold price as costs collapse

This captured AI will only exist where companies have genuine market power, and can protect prices in the face of declining costs of production.

Peak+9.2%

XYZ100/long/semianalysis

AI output is invisible in macro data while costs are visible, so the AI-heavy index gets misread cheap.

Any reasonable measure of the macro economy must in some way account for this or the AI boom may read to the data as an AI bust.

Peak+1.7%

NVDA/long/iltb

NVIDIA margins stay fat as GPU prices rise and useful lives extend far beyond 5 years.

As demand skyrockets, prices are going up for everything on the supply side. Whether it be the NGPUs, their prices are going up. In addition, their useful life is extending.

Peak+18.8%

ASML/long/iltb

ASML completely sold out; Carl Zeiss is the bottleneck on expanding lithography supply.

You see ASML is completely sold out. And they need Carl Zeiss to expand faster. Everywhere along the chain, everyone's either sold out and margins are going up, or they're getting prepayments.

Peak+38.4%

OPENAI/long/iltb

OpenAI is far from cooked; aggressive compute buying lets it serve the demand Anthropic can't.

Dario used to gloat about how OpenAI was being too aggressive on compute and Anthropic was more sensible in their scaling. And now Anthropic is like, fuck, we should have... I wish we had a lot more compute.

Peak+22.5%

MU/long/iltb

Memory prices double or triple again from here; capacity can't grow fast enough until 2028.

Memory can only grow capacity low double-digit percentages a year, right? 20%, 30% a year. Even less for NAND, a little bit higher for DRAM... the true incremental supply doesn't come till '28, which is a very unique thing.

Peak+159.3%

TSM/long/iltb

TSMC could spend $100B on CapEx by 2028, whipping its equipment suppliers harder than anyone expects.

I think logic also has humongous capacity problems. TSMC just had their earnings. They keep upping CapEx... they're not raising prices fast because they're good people, it seems like. You know, single-digit price increases instead of, you know, triple-digit price increases like the memory guys have had.

Peak+24.5%

LRCX/long/iltb

Semiconductor equipment makers get the tail-whip from TSMC's surging CapEx; still underappreciated.

the semiconductor wafer fabrication equipment supply chain is one that I still think is, it's gone up a lot, but it's still very underappreciated.

Peak+65.1%

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