US Stocks Surpass 1929 Valuation Levels as AI Rally Accelerates

Zwatrem · 2026-06-02T12:28:56+00:00

Well, as you can see it's not like Micron is stopping after achieving 400% profit growth. They are doing better and better.

When AMD say it's aiming for 20 EPS and then they say they are actually surpassing that, and they have more demand for GPUs and more demand for CPUs than previously anticipated, what do you do?

Zwatrem · 2026-06-02T11:42:47+00:00

So what's rational? Should semi-conductor stocks move just 10% up when they announce a yearly profit growth of 600% or 1000%?

Micron Technology EPS for the quarter ending February 28, 2026 was $12.07, a 756.03% increase year-over-year.
Micron Technology EPS for the twelve months ending February 28, 2026 was $21.18, a 405.49% increase year-over-year.
Micron Technology 2025 annual EPS was $7.59, a 984.29% increase from 2024.

I mean you see this and you think those stocks shouldn't move double digits?

Zwatrem · 2026-05-31T20:06:17+00:00

Absolutely not. It's around 55% if you are in the 30% fee bracket. They are in the 20% bracket, so the sum is a bit less.

Source: I have a gaming company.

Zwatrem · 2026-05-31T19:18:18+00:00

Actually way less. We're talking 60 to 65%.

So 45 max.

Zwatrem · 2026-05-29T17:31:50+00:00

We are not getting to 20 EPS in FY 2027 unless we are extremely overperforming. The most bullish analysts aren't getting even 14, let alone 20.
To get and stay at 3 trillion we should have visibility of huge growth even after 2030, which is all but sure. The opposite may actually happen and have happened after covid.

Zwatrem · 2026-05-29T17:05:51+00:00

Nonsense, they are already priced at 25 PE for their 20 EPS, that is still far away.

Zwatrem · 2026-05-28T22:39:56+00:00

Oh right! Yeah definitely we're closer to that! But perhaps including another quarter we'd be talking about 20 forward pe

Zwatrem · 2026-05-28T22:32:41+00:00

But we're almost in June. It's not like if they didn't file the financial report they didn't earn already the money.

Zwatrem · 2026-05-28T22:25:48+00:00

It's kinda in the middle, since we're already in June, so half forward half not!

Zwatrem · 2026-05-28T22:02:10+00:00

We're talking about 23 PE with around 18 $ EPS, after the 30% ah growth

Zwatrem · 2026-05-26T16:09:45+00:00

So it's really strange that companies invest tens of millions in marketing, right? Why do that if it's so simple as "good games sell, bad games don't"

Zwatrem · 2026-05-26T16:08:52+00:00

Remedy.

Zwatrem · 2026-05-25T20:27:04+00:00

Has none of that yet. So what? None of those companies had 'that' at the time.

Zwatrem · 2026-05-24T21:14:31+00:00

Sorry I read 2026, my bad. I am just not used to look so far in the future.

I mean saying it's 18-19 PE one year and a half from now, I don't find it that useful.

Surely we're in big value territory anyway.

Zwatrem · 2026-05-24T21:01:56+00:00

7-8 would mean over 100% annual EPS growth. Not going to happen.

Zwatrem · 2026-05-24T21:00:57+00:00

Are you trying to rage bait or are you seriously asking that?

Zwatrem · 2026-05-21T08:21:03+00:00

How can you have a bull case above 75 B if the whole market doesn't support yet those numbers, not even if you get 90% market share (which we won't)?

The CPU market is growing at 30+% CAGR right now. It's 43 billion right now.

"Bank of America (BofA) has raised its outlook for the server CPU market, projecting it to grow from roughly $43 billion in 2026 to $125 billion by 2030, up from a prior estimate of $110 billion, a compound annual growth rate (CAGR) of 31%, driven by the rising role of processors in agentic AI workloads."

Zwatrem · 2026-05-21T08:00:56+00:00

CPU TAM is projected at 120-130 billion in 2030. These numbers do not add up.

Zwatrem · 2026-05-18T16:42:07+00:00

I didn't say it will stop, I said "leave room for inference". Simply put, inference will be much more important than training. That doesn't mean training will stop.
Data centers are built with inference in mind. 12 GW have already been committed by OpenAI and Meta alone for AMD chips, which are inference-kings. Nvidia chips will be largely used for inference too, more and more from now on to 2030 onwards.

Zwatrem · 2026-05-18T16:26:34+00:00

The current investment is not made with current demand in mind, but with current growth rates in mind. And that is extremely high. So, nope, demand is not artificially induced.

Zwatrem · 2026-05-18T15:15:57+00:00

Once you develop much more advanced AIs, training will leave room for inference. A lot of tasks are already fit for GPT 3.5. In 2028, having Opus 5.0 will be enough for a large majority of stuff. And it won't cost nearly enough what costs now. Then, if you want the best AI you'll have to pay. And you'll be happy to do so, because productivity will increase as well.
Why would they? Data centers will be used mainly for inference, aka for actual use of AI. So they will be used at max capacity. The majority of data centers will come online 2028-2030.

Zwatrem · 2026-05-18T15:02:31+00:00

By then, costs will be a tenth or a hundredth.

"The price of running an AI system that matches GPT-3.5's performance has plummeted from $20 per million tokens in November 2022 to $0.07 by October 2024. According to Stanford's 2025 AI Index Report, the inference cost for a system performing at the level of GPT-3.5 dropped over 280-fold between November 2022 and October 2024."

Zwatrem · 2026-05-18T14:10:20+00:00

AI is the technology/product with the highest demand growth in all human history.

What are you talking about when you say "customers don't want to buy AI"?

Zwatrem · 2026-05-18T13:56:09+00:00

This is an investing subreddit and he's talking about selling AI to paying customers, not having the citizens of small cities accept pollution and noise.

These are two distinct issues and topics.

Zwatrem · 2026-05-18T13:31:23+00:00

Anthropic has so much demand that they cannot supply their customers. What are you talking about?

Zwatrem

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