AI Gaint: What's the Next Stage in the AI Race?
Hello everyone! Today i want to share some trading ideas with you!
1
$Alphabet(GOOGL)$ could build a $50B annual TPU-as-a-service business by 2028.
Barclays estimates external TPU sales could generate ~$22B in revenue per gigawatt at a 25% gross margin by then while opening a major new revenue pool for $Broadcom(AVGO)$.
At just over 2 GW of deployments, Google would turn TPUs from an internal cloud advantage into a standalone merchant compute platform.
$Alphabet(GOOGL)$ just delivered the most profitable quarter in corporate history and its first above $100B in net income helped by gains from its $SpaceX(SPCX)$ and Anthropic investments.
I still believe Google should invest aggressively as backlog nearly 5x to $514B but limited data center and chip capacity is preventing it from fulfilling that demand today.
The market paused because record profits came alongside negative FCF but once investors digest the scale and speed of the buildout required to unlock that backlog then I do believe the stock gets rewarded again.
2
$Rocket Lab USA, Inc.(RKLB)$ is now expected to become profitable by 2027 following its $Iridium(IRDM)$ acquisition with combined company projected to earn ~$140M that year
Iridium’s network would offset Rocket Lab’s burn & create a vertically integrated launch, spacecraft & communications challenger to $SpaceX(SPCX)$
3
UBS projects hyperscaler memory spending will more than double to $761B in 2027 reaching ~75% of total capex as persistent shortages drive prices higher.
Hyperscalers are locking in supply through prepayments and multiyear agreements as only three major suppliers control the market and shortages extend into 2028 summer.
If that creates years of elevated earnings then memory becomes a multiple-expansion story where $Micron Technology(MU)$, $SK hynix(SKHY)$ and Samsung can move from ~5x earnings to nearly 12x.
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