AI demand is off the charts, says Bernstein's Stacy Rasgon

? (?) 00:00.070

stacy did micron sound the all clear back on the AI semiconductor train

Stacy Rasgon (U.S. Semiconductor Analyst) 00:08.270

i mean look so i won't comment on micron as a stock my colleague covers it however i mean we've seen memory prices going up you know a gazillion percent every single day because supply is very tight and prices have gone and we saw that in their results and why is supply tight

Stacy Rasgon (U.S. Semiconductor Analyst) 00:25.990

big reason it is because AI demand is off the charts like you've got tons of demand for what's called high bandwidth memory this is the type of memory that gets bundled together with the the GPS and accelerators demand for that is still off the charts they they they talked about

Stacy Rasgon (U.S. Semiconductor Analyst) 00:39.030

that i think they're booked out now all through twenty twenty six they're starting to add some some capacity on on memory but it takes time and i mean i think they they seem to think that those constraints and really strong demand are going to continue for at least for for now

Stacy Rasgon (U.S. Semiconductor Analyst) 00:54.000

and it's like clearly clearly well into next year and i mean this is the you know i've said this before i mean a lot of investors have been getting concerned about a the AI trade and how sustainable is AI demand and everything else and as i said before the only ones that really

Stacy Rasgon (U.S. Semiconductor Analyst) 01:08.750

seem to be worried about it right now actually are the investors that the companies that are out there doing the spending and deploying this stuff at least at this point have not really sounded any alarm on on demand the only thing we've been hearing is nobody has enough compute

Stacy Rasgon (U.S. Semiconductor Analyst) 01:21.790

and that that does seem to be clear and and again i i think micron 's results at least for now are still still demonstrated that an

? (?) 01:27.470

oracle is not the AI trade oracle is a company with a different perhaps less a plentifully available free cash flow that is investing for the future like it or not that's up to you as an investor to decide but they are not emblematic of the AI trade are they

Stacy Rasgon (U.S. Semiconductor Analyst) 01:43.150

no i mean look so oracle gets concerned again because they of of all the large hyperscalers clearly they they are the most levered and and they they're they're they're raising debt to to do this most of the spending though at the large hyperscalers is still being funded out of

Stacy Rasgon (U.S. Semiconductor Analyst) 01:58.550

free cash flow it's they're they're not like you look look at a google or a meta or an amazon or whatever i mean these these are some of the largest most profitable companies in the history of humanity and they're not levered at all like they're they're still funding this stuff

Stacy Rasgon (U.S. Semiconductor Analyst) 02:12.800

i'm pretty easily out of free cash flow so oracle 's maybe in a different category the other reason oracle gets a lot of attention is they they seem to be very close with open AI and so there's questions that people have about about open AI 's whole model but in general this is

Stacy Rasgon (U.S. Semiconductor Analyst) 02:27.750

what's going on over there is not emblematic of i think of of how the rest of the industry at least at this point is still is funding

? (?) 02:34.030

this stuff stacey we're going to talk more about open AI with rebecca patterson here in a few minutes but i want to ask this as a semiconductor guy covering nvidia how tied if at all is nvidia to open AI because the fear is if open AI were to stumble or show some cracks or

? (?) 02:55.950

whatever it may be what would that mean for nvidia

Stacy Rasgon (U.S. Semiconductor Analyst) 03:00.630

well you know it's not just in nvidia like nvidia and broadcom and AMD like they've they've all got pretty sizable deals with with open AI i would say that nvidia and broadcom believes have plenty of sizable deals with with others AMD probably like at least the the near to

Stacy Rasgon (U.S. Semiconductor Analyst) 03:15.910

medium term trajectory is probably more dependent on the open AI ramp even than than saying nvidia or broadcom i think from an AI sentiment standpoint clearly if if something really went wrong with open AI that would it wouldn't matter how exposed you are or not i mean the whole

Stacy Rasgon (U.S. Semiconductor Analyst) 03:30.150

AI trade would would come crumbling down probably