u/Administrative-Ant75

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Lisa Su is taking Leather Jacket's lunch money and buying $AMD stock with the proceeds.

u/warm-spot2953 what cope is next?

Stock drops pretty much every day at open without fail. Is it just short sellers going crazy?

The weird thing is that the only real fundamental news was the GE aerospace collaboration , which should be good LOL. Is this all just volatility in a post bankrupt stock or something im missing

Hey guys, as of today I'm a Nebius shareholder with 20 shares, and will probably buy a lot more as time goes on. Somebody had asked me in the daily thread why I changed my mind, and I began writing a short comment that quickly turned into a long thesis. So I decided to just cross post it here. I wrote everything by hand but applied some simple formatting so it would be easier for you guys to read, in other words nothing here (ironic, haha) is AI slop.

Oh, and please note that I wrote it in simple English without complex financial modeling, if anybody is interested in that I can make a follow up with my model.

Anyways, enjoy!

1) Arkady is an Amazing CEO, and I can tell he has incredible conviction in Nebius, and phenomenal understanding of the technology. Clearly superior management to CRWV (insane debt load), and IREN (squandering investor money on stuff like GSW partnership). Superior engineering and superior management stocks that I've bought have a premium to them, but in my experience it always pays off - AMD, Bloom Energy, etc.. Wall Street NEVER appreciates great managers as much as they should, often times because they are short-term thinkers, but I apply a heavy premium here.

2) I really, really believe in AI. I've read all the works of Leopold Aschenbrenner (funny enough, I hear he's a big shareholder!) on situational awareness and I think the chinchilla scaling laws are under appreciated - memory and compute scaling have shown no signs of stopping. Papers like ChatGPT breaking 80 years of mathematical consensus in the Erdos planar problem and just realized AGI / ASI is probably coming a lot faster than we think. I also have many software engineering friends who always preach me just how ridiculous improvements in coding models have sped up in the last few months, people in finance showing me how much more efficient AI has made them in their job, etc.

So in short, I think compute demand will continue to explode. Obviously extremely good for NBIS, bringing me to point #3, THE MOST IMPORTANT POINT IMO (so im bolding it lol)

3) Nebius is the only pure-ish play on short term contract structures I could find. The split is maybe 50-50 between long and short term, from my understanding. I believe that TSMC is not expanding enough, and even if they were, lead times for AI compute are ridiculously long now because of clean room supply crunch, ASML lead times, and a whole host of other supply chain bottlenecks. Nebius has a nice amount of capacity that is on-demand and pay as you go (from my understanding), which creates a boat load of convexity, and increased pricing in short periods of time if the thesis plays out like King Leopold (that's what you call him here, right?) predicted.

Also, if Taiwan is ever invaded, the existing supply of AI compute will of course become much more valuable than it is today. Few people appreciate how important this factor could become, nearly all other semiconductor and AI stocks would crash, but Nebius will actually benefit a lot in this case

Final point: There's a massive gap between hyperscaler pricing and neocloud pricing, which I think will close over time (hyperscalers charge 2x or more per GPU hour than neoclouds). When you think about it, the hyperscalers main advantage is their compatibility, software ecosystem, and services layered on top of bear metal. A lot of this business is actually software, so like 50-50 between being a back (financing compute) and adding software and managed services, leveraging scale to churn out insane margins.

AI is phenomenal at optimizing code bases, and with Arkady at the helm, I think Nebius will continue being extremely nimble and resourceful to create a ton of value on top of the bare metal GPUs: ie, a great software stack. This will increase margins above other neocloud competition and long term should be a fantastic tailwind.

I'll end it off with ------------- #NebiusWillTakeCareOfYou :)

The only mod for this sub and so far doing a very good job. For a lot of people, they have the mad lad / swag lad flair lol. Also if you go their profile he likes mushrooms lmao

Also, he label posts as cope or hopium LOL, so u/taylorbuley you're a G, let's all vote with our AMZN bags to make him next CEO. Fuck Andy Jassy

TL:DR - AI will be a larger and larger share of semiconductor r&d budgets until the loop is more or less closed and vast majority is AI design. If AI is clearly becoming superior in math and physics, chip design is simply a branch of that in which AI will outperform humans in due time.

I structured this in three parts so it would be easier to read for you guys.

Enjoy!

Part 1 - The Superintelligence Curve

A little over two weeks ago, ChatGPT hit a breakthrough by disproving a piece of the Erdos Planar problem. This proof was revolutionary because it was 100% solved by an Autonomous AI system and was an open problem. For the mathematicians out there, here's the problem + prompt

https://preview.redd.it/glnqv62hcr5h1.png?width=896&format=png&auto=webp&s=7dbd1d8915121684c9d2af53ac67c984741eff23

For those who don't understand just how insane this proof is, here's some commentary from well-respected mathematicians in their field:

Arul Shankar, - “In my opinion this paper demonstrates that current AI models go beyond just helpers to human mathematicians – they are capable of having original ingenious ideas, and then carrying them out to fruition”.

Fields Medalist Tim Gowers, - “A milestone in AI mathematics"

In my last post I pretty much got universally shit on for pointing out that this was a small possibility... so let me put this in context for those who still don't believe

2021 - GPT-3 scores a 5% on Frontier MATH benchmark

2022 - Decent progress on SAT memorization / basic math questions

2023 - Progress on Fermi estimates, code snippets, useful for short tasks

2024 - AlphaProof gets Silver medal at IMO

2025 - IMO gold + Putnam saturated

2026 - Perfect score on AIME, Frontier Math 50%+, Soled 80 year old unsolved, open problem (planar distance problem)

Easier to read version from Claude:

https://preview.redd.it/guk6av9qer5h1.png?width=1078&format=png&auto=webp&s=ebb78f0c7e21413df53a35bdbc1e73dc515748f5

This rate of progress is just unthinkable, hence I believe it's reasonable to think that superintelligent AI models in math, physics, and CS are completely attainable by end of decade, if not earlier.

If you're in agreement at this point, great. I think the criticisms of AI come from goalpost shifting that never ends - To me, this exponential is simply undeniable given scaling laws but if this doesn't convince you, I'm not sure what will

Part 2 - AMD's MOAT / Competitive Advantage

AMD derives value from this formula: Human Knowledge Workers * Economies of Scale * IP

My point is that intelligence from humans gives AMD their entire moat, just like software companies with human programmers (except AI is obviously a bit at math / physics than computer science, but not by too much).

If AI creates breakthroughs in electrical engineering just like Math / Physics, small person hyperscaler teams at AWS / GCP / Azure will be able to compete with large chip companies because they have access to ridiculous amounts of compute.

These teams also have large budgets, direct leverage with frontier labs, etc. Currently, frontier labs carry large inference gross margins of around 70% (Anthropic), so they would have a massive advantage over Nvidia / AMD in cost efficiency.

Obviously, there's a ton of custom ASIC competition already. Hyperscalers turbocharging R&D with AI would really make this an ugly situation for NVDA / AVGO / AMD in my view.

Part 3 - Valuation...

Semiconductor stocks have most of their valuation in DCFs as terminal value - In other words, the very far out future. If the market wakes up to this narrative, it will be very ugly for fabless semis

Given AI disruption risk, it doesn't make sense for fabless companies to be trading at such high multiples. It's obviously not as bad as software, but I think it's clear that one day, Synopsys or Cadence will launch a revolutionary EDA tool that will be the Mythos moment for fabless companies.

Given that physical companies that have far less disruption risk, I think it makes sense to sell $AMD and buy something like $TSEM, $SKM (large anthropic stake), Samsung (Memory + foundry), etc.

If you believe what I'm saying has even a 20% chance of becoming true long term, it might make sense to sell or diversify into non-fabless companies. The market isn't pricing in this scenario whatsoever (at least to my knowledge)

Let's say my income is very low as a retiree, student, etc.

To a hedge fund or rich person owning a stock, if they receive a $1 dividend it's really not worth $1 because of taxes. It's probably worth $0.70, so the stock should drop by (1- average stockholder tax rate) * dividend amount in theory, right?

People cite the post-ex date as dropping exactly by the dividend amount but given taxes I dont think that makes sense unless this theory is just empirically wrong and observations prove else wise.

So if you're in a low tax bracket is this an actual arbitrage or not? I haven't heard this before anywhere

I've seen a lot of different numbers tossed around for how much supply Bloom can bring up in the next few years. I love the company's tech, TAM, etc. but from what I understand current capacity is 2 GW / year and can be expanded up to 5 GW / year.

My question is - 1) if capacity can be expanded so much, why is there such a massive backlog, and 2) How quickly can incremental capacity above 5 GW realistically be brought up? From my understanding, the scale up so far has just been increasing capacity at certain facilities instead of building from ground up which will increase lead times by a lot.

I think AI demand on the power level will keep outstripping supply because everyone's estimates are too low for AIDC construction. If $BE can scale in this critical period where they're the only options before SMR or other tech springs up as competition, they pretty much have a bottleneck monopoly on the entire AI buildout.

But if they can't scale, the 30% Gross margins and eventual margin compression from competition is probably very dangerous, as backlogs elsewhere may be cleared.

To be clear I think the first case is much more possible and we see another huge run-up but I'm new(ish) here and wanted to get the community's view on scaling up supply. Thanks!

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Authorized a $1,000,000,000 buyback (One Billion Dollars), and spend only 0.5% of it on buybacks, because "The stock is volatile"... what the actual fuck?

This isn't about SBC or other stuff, but getting paid millions per year and not doing buybacks because of volatility while he dumps, to my memory, half of his stock in the open market makes 0 sense to me.

Vollero's history at Snapchat doesn't vive me good vibes either. Snapchat is a money pit that has sunk billions of dollars thanks to their moronic financial model lol

Yes, I know sales are pre-planned in advance, but I believe new sale proposals were pushed by him well after the volatility and stock crash earlier this year.

Doesn't even make sense from his own perspective to dump while buyback buying pressure isn't there but that's another story

When people say one thing and do another, they're either not telling the truth or something else is going on that's weird... I don't like Vollero and think he should get canned for this mismanagement tbh

Edit: SPEZ, PLEASE BRING IN SOMEONE FROM META AS A REPLACEMENT! To my knowledge, Vollero has zero redeeming qualities

Buyback announced at $155 and it drops like another 30% and pretty much nothing happened. Was this buyback just a lie?

u/spez

# Abstract of AMD Note- Key Area of Focus into the Earnings call

* **Buy with Price Target raised to $465 based on 38x 2027E EPS).

* **CPU Strength** Datacenter CPU biz expected to grow 55% in '26 / 48% in '27. Agentic AI is shifting the CPU-to-GPU ratio back in AMD's favor with N2 Venice leadership.

* **Anthropic Partnership** News report suggests Anthropic may have partnered with AMD for MI450. We expect the partnership to be more flexible with larger GW scale in first year, vs prior deals.

* **MI455 Readiness:** Following the well-known earlier push out, shipments are tracking for mid-3Q. ODMs are expected to start rack shipments in 4Q. For 2027, we raised CoWoS slightly to 150k driven by robust demand on three GW-scale customers.

* **MI550** is positioning to challenge Rubin Ultra in 2H27. AMD's 2.5D/3D packaging expertise enables a 4-die/12 HBM4e design, vs Rubin Ultra 2-die package (and MCM for 2 sets of 2-die).

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source: https://x.com/sssjeffpu/status/2051304480612954592?s=20

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There's only so much output can be expanded because HBM uses EUV from ASML, which will be the bottleneck for a few years now. AI changes the game, and fabs are the most valuable physical asset now and forever, so I can't see how you lose money holding $MU. I actually bought in recently for the first time in a while, but might accumulate a shit ton more in any drops. $MU has a lot of room left to run, I'm guessing $1500+ within next 2 years

What is AMD using for scale out if Nvidia locked up coherent and lumentum laser capacity? Just thought of this and slightly concerned, will they just absorb innolight and other Chinese suppliers?

High power narrow line width over all is my view. As a lumentum shareholder as well I made this connection and I don't know what Lisa Su has cooking here, there's just no capacity for high quality optics until like 2028-2029.

(made a post on this because comment in daily too niche to get feedback)

EDIT: Just realized AMD must be using Broadcom for CPO, forget they had such a good optics division because they're not a pure play

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https://amdfanstore.com for those interested (NOT my website or promo btw, I think it's the official partner of AMD)

Reddit is enterprise software, AI, and social media each day depending on which sector is doing the worst, and is the opposite when the narrative shifts for that sector. For example, today we are AI, last week we were software, and last month SaaS.

Hope this helps clarify everything!

Signed,

Mr. Market