Notes on the Noise

This is an important one. What the past can teach us about today, and why this is important to understand for the AI buildout. open.substack.com/pub/notesonthe…

@Mike_Taylor1972 @TommyThornton I’d like to see the rationale for that argument. Have you written about it or discussed it in detail anywhere?

@TommyThornton The crypto bro's don't seem to realize, by 2027 this whole thing is very very over - there is no purpose, at all for BTC, but to be displaced entirely by Treasury coins. The Whales Know.

I said this to a well-known hedge fund manager on Friday. He agreed and laughed. The long term Bitcoin and Gold bulls seem to ignore huge pullbacks, even sometimes years before new highs. Gold bulls are a lot smarter than BTC bulls but on a relative scale. Go ahead unfollow.

@FukNoCoiners Not yet. Given it hasn’t gone on a run yet maybe I should

@NotesontheNoise Have you looked at POET yet?

I added to $MU The market doesn’t understand how long this supercycle will last. Watch the $NVDA GTC keynote if you don’t believe me

Still getting $SMCI ads. Brings a whole new meaning to “Full AI Factory Solution” 😅

We are going to need more compute $GOOG $NVDA $AVGO

SK Group Chairman Chey Tae-won said at GTC that he thinks the global memory chip wafer shortage could persist until 2030 with more than a 20% shortage at times, driven by AI demand. $MU $NVDA $AVGO $AMD

Remind me on this chart when the Iran war started? #oil #bitcoin

I'm going to make some obvious points. (1) Blowing up all the oil infrastructure in the Middle East is an insane idea, and may well result in a global economic crash and humanitarian crisis unrivaled in the lives of those now living. We're talking about the price of everything everywhere rising, from food to gas, at a moment when inflation was already high. All of that will be laid at the feet of the authors of this war. (2) The antebellum status quo of Feb 27, 2026 was just not that bad, but we're unlikely to return to it. Expect indefinite, long-term, ongoing disruptions to everything out of the Middle East. (3) Also assume tech financing crashes for the indefinite future. The genius plan to get the Gulf states caught in the crossfire has incinerated much of the funding for LPs, for datacenters, and for IPOs. Anyone in tech who supported this war may soon learn the meaning of "force majeure" as funding gets yanked. (4) Many capital allocators will instead be allocating much further down Maslow's hierarchy of needs, towards useful basic things like food and energy. (5) It's fortunate that all those progressives yelled about the "climate crisis." Yes, their reasoning about timelines was wrong, and much of the money was wasted in graft, but the result was right: we all need energy independence from the Middle East, pronto. It's also fortunate that Elon and China autistically took climate seriously. Now they're going to need to ship a billion solar panels, electric vehicles, batteries, nuclear power plants, and the like to get everyone off oil, immediately. (6) It's not just an oil and gas problem, of course. It's also a fertilizer problem, and a chemical precursor problem. Maybe some new sources will come online at the new prices, but it takes time to dial stuff up, particularly at this scale, so shortages are almost a certainty. That said, China has actually scaled up coal-to-chemicals[a,c] (C2C), and there's also something more sci-fi called Power-to-X[b] which turns arbitrary power + water + air into hydrocarbons. But all of that will need to get accelerated. I have a background in chemical engineering so may start funding things in this area. (7) Ultimately, this war is going to result in tremendous blame for anyone associated with it. It's a no-win scenario to blow up this much infrastructure for so many people. Simply not worth it for whatever objective they thought they were going to attain. But unless you're actually in a position to stop the madness, the pragmatic thing to do is: scramble to mitigate the fallout to yourself, your business, and your people. [a]: reuters.com/business/energ… [b]: alfalaval.com/industries/ene… [c]: reuters.com/sustainability…

@chamath I hope you guys let him speak

Pod will be a banger. All Jensen all the time - from GTC! Up soon…

@capexbt This flashed up last year

Nobody is asking why Bitcoin rallied during a war. The answer is Iran. - Iran mines Bitcoin for $1,300 per coin. The cheapest on earth. - The IRGC runs the operation. Every coin gets sold to fund imports and bypass US sanctions. - They’ve been dumping tens of thousands of BTC on the open market for years. Constant invisible sell pressure. - Then the US bombed their power grid. Mining went offline overnight. The hashrate dropped within hours. - The sell pressure that nobody knew existed just vanished. The US accidentally made Bitcoin more scarce by bombing the world’s cheapest mining operation. And nobody is connecting the dots.

Everyone (I hope) knows semis are cyclical. AI has created a super cycle. $MU is historically sold a commodity with fierce competition. The market is pricing it like that will return in a few quarters. The market will eventually realise this is a multi-year super-cycle and reprice accordingly

@ecommerceshares And the market doesn’t move. Market clearly thinks this is only a story for a few quarters then back to cyclical abyss. I disagree $MU

$MU Largest beat & raise of all time. +196% revenue growth at an insane 69% EBIT margin. Never, ever been done at this scale. 3Q revenue guide of $33.5bn midpoint vs $23.3bn consensus. WTF??? Absolute bananas numbers. Unprecedented. Even the Memory Whisperer has to gasp.

@Agrippa_Inv Same 👇

Why I’m Not Invested in $NBIS First of all, let me make one thing clear: contrary to what you might think, I’m not an $NBIS bear. But then again, I’m not invested either… and for good reason. Nebius positions itself as a holistic cloud platform with superior software technology that caters to AI-native start-ups and enterprise clients. That in and of itself isn’t a problem, but it means they're directly competing against the largest hyperscalers in the world, who are also targeting that exact cohort with their own set of software solutions (Google Cloud, Microsoft, etc.). Nonetheless, if $NBIS can successfully differentiate itself with its core offerings, it could gain some pricing power, which is the company’s best shot at one day becoming profitable. The problem is, $NBIS is VERY far away from that… Looking at the last quarterly filing, the company’s gross expenses + depreciation equaled ~110% of its revenues. In other words, these two cost categories exceeded the value of the underlying revenues ($249.2m vs. revenue of $227.7m). To be fair, last quarter Nebius still used a 4 year depreciation schedule on GPUs, which is rather short and overstates depreciation. Adjusting for a 5 year depreciation schedule (industry standard) leads us to $144.6m of depreciation. Then, adding gross expenses of $68.5m on top gets you to $213.1m, which equals 93.5% of revenues. And keep in mind, this figure does NOT include the hundreds of millions in costs spent on SG&A, R&D, and financing (interest). So what’s my point with this? The problem is, these are STRUCTURAL costs, the kind that scale with revenue, meaning you can’t easily grow out of them through sheer scale. My point is that $NBIS' pricing power is nowhere to be seen, at least not relative to its costs. Now, most $NBIS investors would probably argue that we are still "early" and that pricing power will show up eventually. My problem with that argument is that the company seems to be allocating a very large chunk of its pipeline towards servicing hyperscalers through bare metal offerings, the kind of “bulk” service that does NOT command significant pricing power. That means, fundamentally speaking, $NBIS is likely very far away from actually becoming profitable. And while right now everyone is focused on headline figures like ARR, the market’s patience will run out eventually... it ALWAYS does for every company. One day, the market will demand to see real profits flow down to the bottom line, and I’m not sure if $NBIS is structurally positioned to deliver on that any time soon. To make matters worse, investors can’t even model out the economics of these large hyperscaler deals, because management provides absolutely 0 information on anything except headline figures. We don’t even know the CapEx associated with these deals, or at the very least, the number of GPUs they have to purchase to fulfill their end of the bargain. Contrast that with a company like $IREN, which gives you all the necessary information to build an entire P&L and cash flow model over the full course of the contract length, which is exactly what I’ve done extensively for our subscribers on Substack. I have a VERY good idea of how much actual post-tax net income $IREN is making in every year of their hyperscaler contract. There are other reasons that further point in the same direction, but I won’t get into them right now. If they fix their cost structure one day, I’m happy to reconsider my stance. But as of today, their “black box” approach to publishing details on their largest deals makes them uninvestable for me.

$MU Q2 guidance came in a bit light, but Q3 is cooking. $20 EPS in ONE QUARTER. The market still doesn’t believe this is sustainable or it’d be trading over $1,000

$MU reporting after the close. Remember to check when your local pundit stated talking about a ticker before believing their expertise 👇 $MU & $VRT 🚀

@zerohedge @CoinbaseDuck $COIN is building the infrastructure for the future of finance 👇

*COINBASE PLANS INFRASTRUCTURE FOR AI AGENT PAYMENTS:INFORMATION

$AAOI in for another big day me thinks

First post on $AAOI was March 1 when the price was $100 Bio says he bought at $25 🧐 Be careful

@yianisz Your first post about $AAOI was on March 1 when it closed above $100. Yet your bio says you bought at $25 🧐

$AAOI didn’t drop because the story broke it dropped because too many things hit at once at the top. After a +200% run in the past 6m, you had the ATM expansion, insider selling, firmware uncertainty and still no profitability until 2027. That’s enough to shake weak hands. But none of that changes the core: AI optics demand is real, hyperscaler orders are real, and capacity is the bottleneck. This isn’t a broken thesis. It’s a reset after excess + execution checkpoint.