Eric Jhonsa

It took nearly a year from the first signs of agents boosting server CPU demand to get the current frenzy in CPU plays :). Meanwhile, many BTM power plays are trading for low 2027/2028 EPS multiples as signs keep growing of a big 2027 power shortfall relative to compute demand. https://t.co/aEnrOjg3Me

Samsung's preferred shares (005935) trade for ~3x 2027E EPS in Seoul. https://t.co/T9jhDg9pa3

BTM power plays might be a fat pitch right now. A large delta is opening up between 2027 compute demand and available GW. Yet many BTM plays with significant orders (e.g. $FTAI, $SEI, $BW, $EROC, 2G Energy) trade at low/moderate forward multiples thanks to the momo unwind.

This assumes there's no difference in system perf/watt and that software doesn't matter. There's still massive demand for Nvidia GPUs, in part due to its strengths in those two areas. Also, while custom ASICs tend to be cheaper, system costs per GW are generally higher than $12B.

They do. I just think NVDA's competitive strengths (encompassing silicon, systems/networking co-design and its software/ecosystem) make it tougher to take significant accelerator share from them than from AVGO, whose strengths revolve around silicon and packaging IP. Plus AVGO's switch silicon biz faces some disruption risk from OCS.

They do. I just think NVDA's competitive strengths (encompassing silicon, systems/networking co-design and its software/ecosystem) make it tougher to take significant accelerator share from them than from AVGO, whose strengths revolve around silicon and packaging IP. Plus AVGO's switch silicon biz faces some disruption risk from OCS.

@ThainRos Yeah. Think AVGO faces bigger competitive headwinds than NVDA. But markets got too pessimistic given their product/supply chain strengths and the demand environment.

@ThainRos Yeah. Think AVGO faces bigger competitive headwinds than NVDA. But markets got too pessimistic given their product/supply chain strengths and the demand environment.

@ThainRos Slightly more expensive than NVDA, but easily cheaper than MRVL, MediaTek or AMD. And though I like NVDA, its multiple has been pressured by worries about competition and financing deals.

$AVGO trading for ~12x what their guide implies for calendar 2028. Obviously a lot can change in terms of supply/demand, AI lab revenue growth, etc., but a lot of stuff looks cheap based on what hyperscalers and their suppliers are forecasting for the next couple of years.