OpenAI Contagion: Panic or Opportunity?
My new grid position + more.
Stocks were down today as the WSJ reported that OpenAI missed internal revenue and user targets at the end of 2025.
The report said OpenAI missed it’s internal goal of reaching 1B weekly ChatGPT users, missed its yearly revenue target for ChatGPT, and that CFO Sarah Friar had raised concerns about whether revenue growth would be strong enough to support the company’s gigantic future spending commitments.
Yawn.
Naturally the market is taking that headline and running with it as AI stocks such as semiconductors, datacenters, power, etc. get hit.
The AI trade is done because OpenAI missed a growth forecast.
I strongly disagree with that interpretation. To me, this doesn’t look like the beginning of the end for the AI trade.
In my view it’s a normal and overdue pullback after a monster run with the market using a scary headline as the excuse to finally take profit. Sure the headline sounds bad but if you think through what’s happening, I don’t think it points to a systemic demand issue across AI.
I think it reinforces a lot of what we’ve been discussing for months.
The real bottlenecks are still compute, CPUs, power, land, energy, memory, advanced packaging, networking, data center capacity, and the ability to actually bring all of this infrastructure online fast enough to satisfy demand.
The issue here is that expectations got extremely high and the market was looking for any excuse to pullback. This morning we got that excuse!
So that leaves a few questions. Is the top in? Should we sell our winners? Where should we focus?
I want to quickly mention I’m working on a Power Grid primer article that outlines and discusses all of the key power grid players in the space.
Today I added a new position in a profitable grid + power company growing over 60% YoY with major ties to datacenters. In case you missed it, I suggest checking out the subscriber chat here.
Memory is also flying in after hours after Seagate’s earnings. I let subscribers know yesterday that I added an under-discussed memory stock. It’s still under the radar but I don’t think that’ll be the case much longer…
In the remainder of this article I’m going to discuss what I think about the AI trade going forward, the Magnificent 7, which groups I’m going to look to add exposure to, the bottleneck + shortage I discussed last week, where I’ll be looking to add exposure, my newest position, what I expect to happen next, and much more.