Manuel Vargas Ferro @MOVF96: "⚡AI ISN’T JUST SOFTWARE —..."

Colombia

⚡AI ISN’T JUST SOFTWARE — IT’S HARDWARE. When we analyze AI, we tend to focus on learning models, data, tokens, and the like. But as long-term investors, we need to look at the limits of physics. Today, AI’s growth doesn’t depend solely on how many chips Nvidia can design — it hinges on two critical factors: Memory and Power. The Mechanism: Why Are They Vital? * Memory (HBM): It’s useless to have the fastest processor in the world if data can’t reach it at the same speed. High Bandwidth Memory (HBM) is the funnel. Without it, the chip is a Ferrari stuck in traffic. * Power: AI data centers consume three to four times more electricity than traditional ones. Energy has become the industry’s glass ceiling. No grid capacity or cooling infrastructure means no compute. Structural Power: Who Holds the Keys? We’re witnessing a paradigm shift. Historically, memory was a cyclical, commoditized, and frankly boring business. Today, it’s an ultra-complex engineering component. * Pricing Power: Companies like Micron or SK Hynix no longer just sell chips — they sell the ability for AI to exist. * The Energy Toll: Utilities and infrastructure players have gone from being “defensive” names to the new “technology enablers.” The Risk: “Permanent Scarcity” Valuations? This is where discipline as a portfolio manager comes in. The market is starting to assign multiples to these companies that, in some cases, exceed those of TSMC itself. TSMC owns the foundry — the ultimate bottleneck. If the market is valuing memory or energy suppliers above the company that actually manufactures the processor, it’s because it’s pricing in perpetual structural scarcity. Is that realistic? History tells us technology always finds ways to optimize. The current risk is that we’re buying “utilities” (energy and memory) at “disruptive growth” valuations. Geographic Concentration: The Achilles’ Heel We can’t ignore that memory (Korea/U.S.) and fabrication (Taiwan) sit in areas of elevated geopolitical tension. A resilient portfolio doesn’t just seek quality — it understands that critical dependency is a tail risk the market tends to ignore during periods of euphoria. Do you believe energy and memory scarcity is permanent — or is the market being extremely optimistic with these valuations? $MU (Micron Technology, Inc.) $GOOG (Alphabet) $VRT (Vertiv Holdings Co) $SMSN.L (Samsung Electronics Co Ltd - GDR) $MSFT (Microsoft)