u/DisastrousFalcon9893

Definitely an under-covered aspect of the blackwell to vera rubin jump is that, where Blackwell was a GPU that was for the training era, the vera rubin system is designed explicitly for the Inference + Agentic Era.

All of the comparisons I see that position Asics + AMD/Intel Cpus eating away at Nvidia market share are absolutely fair and true....when compared to just GPUs/Blackwell.

But Jensen is way ahead of that and was going on about this full stack end-to-end approach months and months before I (and the market at large) understood what that meant -- i.e. GPU era over, GPU (training) + CPU (Agentic) + whatever inference focussed hardware you like (inference).

Jensen has vocally been extremely dismissive of Asics on a Podcast, suggesting he expects Vera Rubin and later generations to end up being vastly superior over their lifetime for even inference tasks. This could; as I see it, likely stem from things we will not see the market appreciate/price in until probably late 2027 at the earliest. Namely that the comparison when choosing what to upgrade with (as will be the dominant choice for Capex spend post this buildout say in 2029+) once we're fully energy constrained & no longer supply constrained (ATM vera rubin vs asics is irrelevant- the answer for hyperscalers is 'both'...) will shift towards what makes sense over the replacement lifecycle.

As I see it/understand, this seems to me to be:

Year 1:

Nvidia chip upfront: 1x cost, 1x efficiency.

Asic at say 1.5x speed/efficiency at say 2/3 cost vs Nvidia chip due to in house custom silicon margin benefits (Amazon, Google etc.) ----> Replace in 6yrs for a 100% write down with 0 resale value.

However, thanks to the ongoing software optimisations that Nvidia pushes out:

Year 2: Nvidia catches up to and surpasses asic due to optimisations, ending year 2 at now 2x original efficiency and speed and hence 33% ahead of asic.

Years 3-6: Exponentially widening gap in performance of nvidia chip system, such that by end of year 6 the ~5-10x performance uplift means the nvidia chip is up to 5x faster than the equivalent asic...

End of year 6: Nvidia chip resale value at ~33-50% original cost, recouping most if not all of the present value outlay differential at installation in costs.

Add in what I believe is another overlooked component-- the synergies in efficiency and performance of running nvidia full stack end to end vs a mix and match loosely 3 part system of GPU+CPU+ASIC, meaning I'm not so sure we will even see that 1.5x initial ASIC advantage materialise in practice anyway....

Result if this analysis is correct: Hyperscaler orders show strength for Vera Rubin and Rubin ultra through H2 26, 27 and H1 28 and, crucially, choices when allocating capex for the replacement based 6 year cycle starting in late 2028 shift meaningfully away from custom in house asics and back towards Feynman, with Nvidia benefiting from this timing in particular as they will remain largely supply constrained likely through Vera Rubin and Vera Rubin Ultimate's lifecycle of 1yr each and so the inference+agentic market share strength above expected vs Asics and AMD/Intel GPUs manifests as meaningfully higher revenue growth able to continue well beyond 2028, with incremental revenue uplift depending on if Asics and CPUs are better for a large share and eat up a large portion of the Inference and Agentic market opportunity or not probably being of the order of magnitude of ~100bn in 2029 and growing to say 200bn over a few years.

Any hardware/ai understanding experts who can answer this question for me able to chime in?

Note that I don't consider the Asic and CPU recent surge and growth as evidence to disprove this thesis; Vera Rubin isn't available at scale and inference+agentic capabilities above just blackwell GPUs + limited supply by Nvidia is needed now. This thesis determines what happens through 2030+ -- either ASICs+non-nvidia CPU etc hyperscaler capex market grows towards say 500bn yearly over time, or it stays relatively small, limited to say 100-200bn, while Nvidia Chip revenue purely from Hyperscalers grows to an opportunity of ~500bn over time (by say 2034) in the first case vs more like 800-900bn in the latter case. Note irrelevant somewhat to non-hyperscaler buildout as they don't have the incentives to build custom chips Hence that market remains a solid growth driver nearly monopolised entirely by nvidia through the same period.

The first case is ~the base analyst case currently with Nvidia growing fast in FY27 and 28 before seeing growth sharply moderate to say 15-20% yearly.

The latter represents NVIDIA unlocking an additional demand based revenue uplift from hyperscalers through 2034 allowing continued YoY 30%+ growth through that period to revenue of up to 800bn from hyperscalers and ~1.2trn from other customers by 2034, which would mean 2trn+ in revenue possible in the next ~8 years (requiring roughly 25%+ growth cagr through 2034 post FY27). This would net them a staggering ~1trn in earnings at a fair multiple of something like 35x fwd PE - representing an unimaginably huge market cap of something like 35trn being possible over the nexr 10yrs. Sounds silly almost but the maths doesn't lie and the revenue opportunities for the market as a whole are not really what's being disputed and if they keep their current historical near monopoly on chips for a global AI buildout it's pretty obvious they'd be worth something like that. Question is on the monopoly aspect, not market size...

As in title, enjoying insane premiums and not worrying about pullbacks on both mu and sdsk -- mu my puts are at ~670, sdsk 1300, for ~$50 and $80 at point of sale. If by late june mu is above 620 and sdsk 1220 I profit. If they're below, well, I get a great deal at say 600 and 1200 and repeat with puts next month of ~540 and 1080 with covered calls on my assigned stock also extremely high premiums -- with my bullish stance and IV crush over time if they rally due to huge mkt caps not being compatible with 100-110% IV for long meaning far OTM calls drop in value by a lot. Hence selling leaps dec 2028 at 1400 and 2400 respectively- each about 75% OTM - for ~300 & 800 each- representing 35% and 50% of share value each.

If the stocks rallly to those levels the mkt caps will be 1.4trn and 350bn respectively; each corresponding to IV Sustainable no higher than about 70% and 80% longer term. At those IV levels in 6 months even at 1400 and 2400 - so my calls are ATM not 75% OTM with about 2 years remaining the MU call would rise to only about 400 (+100) while the Sdsk call would rise only to about 1000(+200). Meanwhile my stocks value has gone up 600 and 1000 respectively and my puts have obviously lapsed and not been assigned each month for 6 months during the rally - yielding an extra ~30% on top, so ~300 for mu and 500 for sdsk.

Net position on said rally over 6 months: Start investment in MU - call = 50k, sdsk - call = 70k

Stocks-new call prices + put income = 140k - 40k + 30k mu = 130k

240k -100k+50k sdsk = 190k.

Total return over 6 months: 120k into 320k = ~166% return.

Alternatively if they stay flat, still collect call premiums of ~80k Meanwhile iv still crushes and 6 months time decay making options now worth ~160 mu (-140) and ~420 sdsk (-280) = +122k on flat performance = ~100% return.

Not gonna bother modelling in a crash other than to say if they fall substantially over 6 months by say 30% each my puts still collect premium to offset the majority of the fall in share price that would cost me 24k+42k=66k on shares, while the IV crush+lower prices+time decay on options would render them worth roughly 100(-200) and 250(-450) each - rebuy with mu and sdsk at 560 and 1080 each for 65k profit, leaving me net in the green and ready to benefit from the obvious recovery and explosive upside due with their fwd pes at like 5x each in such a case, with me selling endless puts and buying ~200% OTM leap call spreads in that case (~1500-1400 and 2500-2400 spreads 2.5yrs out respectively) for roughly $5 dollars each on a 100 spread, representing 20x upside potential on the rally (god i hope that happens lol).

PT for each over next SIX months as market rerates for durable longer term price elevation and contracts: MU $1500, Sdsk $2000. Mu especially sees huge upside from upgraded consensus at next results with estimates unchanged from 4wks ago vs Sandisk at +80% fy27 earnings despite mu having 21% nand sales...

Hi all,

Mu valued as a cyclical stock with major crash still modelled sometime soon based on fwd PE. If it were to no longer be cyclical but instead grow at its ~20% bit growth cagr then it would be valued at a fwd PE of ~30x and hence be worth ~$2000+

So, crash means supply > demand. Historically has happened in dram and nand, fine. Irrelevant-- ai data centers now make up the vast majority of demand for nand, dram and hbm going forward so their demand cagr is the effective whole market demand cagr, roughly.

Memory side: Dram and hbm same wafers, hbm uses 4:1 wafers of dram so hbm demand growth represents dram demand growth - more hbm supply lowers normal dram supply capacity etc.

Industry bit growth for dram is ~12% this year and about 15-20% cagr going forward and cannot exceed that without huge capex builds with a lead time of 24 months etc.

Hbm insane shortage and great margins etc so MU and Sk and Samsung all ramping hbm at high double digits in 2026 and 2027 to meet this demand. HBM shortage will end in 2028. Fine.

But this hbm ramp means traditional dram supply left over is actually roughly flat yoy in 2026 and 2027 while demand also explodes, to the point that the shortage is expanding fast and will be likely about 50% dram supply vs demand by end 2027.

After 2027 hbm and dram demand growth from ai data centers grows faster than overall data center capex grows as chips get more dram+hbm intensive as they get more advanced plus 2028 onwards also starts to see chip fleet replacements start (2022- hopper fleets, 6 year life) hence allowing hyperscalers to spend roughly 15% cagr on chips even while overall capex is say only 5-10% cagr 2028 onwards. Meanwhile sovereign and other customers represent the other ~50% of data center revenue for nvidia in 2028, and they aren't moderating capex with hyperscalers-- they're projected at about 30% cagr through 2030.

Hence, dram/hbm cagr is consensus estimate 20%+ through 2030.

We start 2028 able to supply half of demand and ramp supply at up to 20% a year max. Demand is growing 20%+ each year.

In what universe does this mean a price collapse from oversupply in 2028 as is currently being modelled and priced in? Even if demand cagr were only 10% and supply 20% this gap/shortage would take about 8 years to close....taking us to 2036...

In particular, note what the actual suppliers have said: at no point has a single one referenced the shortage easing at any point. All they have said is that tightness will persist through at least X year, with 2030 now starting to finally be mentioned.

Nand (21% of revenue) is even more ridiculous-- same supply ramp cagr situation yet agentic ai requires roughly 8x the SSD proportion of training...hence Sandisk's absolute explosion and why nand is predicted to increase in price 234% in yoy in 2026.

Nand is absolutely hopeless supply vs demand wise.

The actual situation is that supply is so limited and with no resolution in sight meaning what is going to be done/is already occurring is hyperscalers start signing 5yr contracts with price and volume agreements upfront and even prepayments of ~10-20% (which covers capex costs) so that mu, sk and Samsung build out additional capacity (expect to see new capex announcements) to help meet hyperscaler demand in return for the 5yr security of demand and price + the 20% covering the capex costs.

This seems insanely obvious to me on paper with the analysts and market simply blindly ignoring the simple % maths and parroting 'tight through 27, meaning relief in 28, cyclical crash then' that has no logical or numerical backing beyond 'but it always worked that way before!'

Please, someone, anyone, tell me how I'm wrong because if I'm not we can comfortably expect to see the following;

Major q3 26 beat from Mu on higher than expected nand and dram pricing, ~23 eps vs 19 expected. Similar beat on guidance. But, way way way more important:

Mu to announce and detail that a lot of its capacity is now locked up via further five year contracts on top of the one from q2 26, with said contracts agreeing prices and volumes in advance. Outlining shortages to persist through 2030, with additional capex announced to allown them to fulfill the needed volumes in the 5yr agreements made, with reassurance that supply will still lag demand even with this extra capex coming online ~end 2028/through 2029.

If management announces all this as I hope and spells it out to investors that shortages have no possible way of being resolved currently such that beyond 2030 is a foregone conclusion + 5yr contracts are the new norm and prices ain't crashing + supply cagr at 20% a year still leaves demand growth > supply growth, suddenly mu is deserving of a 30x fwd PE and people realise.

My current holdings are dec 2028 leaps, 5*1200-700 spreads that i bought for something like 6k each and have made me something like 30k already in 1-2 mnths (e.g. 100% returns) and I fully expect to see them worth ~ 150k in 12 months time when mu is at ~1500+ and iv crushes from 80% down to ~50% and time decay helps.

I've never seen such terrible analysis across the board by so called 'research analysts' as I have for Mu. Please, if I'm wrong, someone tell me why. Genuinely. Because this seems like it's way too obvious.