Yesterday, $377 BILLION of Market Cap were added to AI infrastructure stocks in a single session.
NVDA +6.19% MU +6.51% DELL +10.79% SNDK +3.72% WDC +3.70% STX +4.71% Every single one of these companies directly supplies the hardware that runs AI, chips, memory, servers, and storage. Demand from data centers is outpacing supply across the board. Dell booked $24.4 billion in new AI server orders in a single quarter. Micron is sold out through 2026. SanDisk and Western Digital are one of the two biggest suppliers of NAND flash memory used in AI storage. Seagate supplies the hard drives filling new data center being built. The market is repricing every company in the AI hardware supply chain at the same time. Source: Bull Theory
One of the most striking charts out there: the SOX index has risen sixfold since 2020, while SOX earnings per share have climbed fivefold.
In other words, most of the rally has been backed by real earnings growth, not just higher valuations. The key question now is whether these profits will actually come through and whether they can keep rising. (HT Goldman Sachs) Source: HolgerZ, Bloomberg
The pullback in CEO confidence hasn't shown up in capex intentions though.
“Planned business investment stayed the course in Q2, as most CEOs cited no revisions to capital investment plans. However, the share anticipating increases to capital spending plans in the next 12 months rose further, while fewer CEOs expect to reduce capex compared to Q1." Source: Neil Sethi
SpaceX sized up against the other biggest IPOs ever. $75B offering at a $1.8T valuation, dwarfing the next largest offerings sizes.
Source: Negligible Capital Bloomberg
The current market frenzy is far beyond the 2021 MEME STOCK MANIA
Retail investors are now spending a record 4.9 TIMES more money on semiconductor options contracts than the average seen since 2020, according to Citadel data. This is also exceeding the 2024 record by ~25%, when the AI chip frenzy first drove a surge in retail semiconductor options activity. In other words, retail investors are making record bets on semiconductor stocks. Source: Global Markets Investor, Citadel securities Afficher la traduction
Nasdaq at 875 trading days after the release of Netscape on 12/19/94: +144.55%.
Nasdaq at 875 trading days after the release of ChatGPT on 11/30/22: +144.77%. Past performance is no guarantee of future results! Source: Bespoke
Forward P/E Ratios...
Costco $COST: 45 Walmart $WMT: 36 Nvidia $NVDA: 17 Which one is the bubble? Source: Charlie Bilello
AI Race To Return On Investment
Only **Amazon** is expected to generate a positive return on its massive AI capex through 2030 — even under the most generous assumptions (zero costs). Microsoft: -9.2% Alphabet: -15.7% Meta: -28.8% Oracle: -35.6% The AI arms race is getting expensive. Source: FT BraVoCycles Newsletter
