AI Capex is forecast to be exceed $1 TRILLION next year.
Actually stop for a second and think where we are in the AI cycle.
1. CPO with $Applied Optoelectronics(AAOI)$, $Credo Technology Group Holding Ltd(CRDO)$, $Marvell Technology(MRVL)$, $Lumentum(LITE)$ etc is a 2027-2029 story.
-> We have some CPO names trading less than 3x 2027 revenues with revenues growing ~12x over the next 18 months.
2. Neoclouds like $NEBIUS(NBIS)$ is a 2025-2030 onwards story. Jensen literally said "take care of you."
-> $27B $Meta Platforms, Inc.(META)$ deal. $2B $NVIDIA(NVDA)$ stake. ARR scaling from $9B to potentially +$70B (2030 onwards).
3. Robotics is a 2026-2050 story. The TAM over that many years is literally a percentage of the global labor force which sits ~$30 trillion today.
-> And yet we have endless KEY robotics/humanoids names sitting at sub $3 billion market caps... $Ouster Inc.(OUST)$.
4. AI has barely even had a positive effect on biotech yet. This has the potential to turn into the greatest use of AI in history.
-> $Eli Lilly(LLY)$ at $1 trillion valuation is still purely a GLP-1 story. The platform they're building is far from priced in.
-> $Tempus AI(TEM)$ at sub $10 billion is more or less considered solely a diagnostics business.
5. And then we have the application layer which is a 2026 onwards story and it's where the capital will accrue for years to come. $Lemonade, Inc.(LMND)$ is a sub $5 billion company.
$Zeta Global Holdings Corp.(ZETA)$ is a $5 billion company.
Both of these are disrupting trillion dollar industries.
As I said at the start...just take a second to appreciate where we are in this tech revolution.
And then take a deep breath and be happy the stock market is cooling off for a little bit because that is healthy and sustainable.
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