Sustaining this exposure can sometimes feel like momentum chasing or meme stock mania. I have to replenish my conviction from time to time to remember what the Alpha is, which is front-running the mid to long term reaction to what is unfolding.

What we already know:

A few current events

• Google just reaffirmed their expanded Capex plans, cloud backlog (2x due to Anthropic later widely cited) and indicated an unspecified INCREASE for next year: Q1 2026 GOOGL call (April 29, 2026)

  Anat Ashkenazi, CFO: “We are updating our full year 2026 CapEx guidance range to $180 billion to $190 billion, up from our previous estimate of $175 billion to $185 billion to now include investment related to the acquisition of Intersect…”

  “We expect our 2027 CapEx to significantly increase compared to 2026.”

• NVIDA re-confirmed the same, forecasting 3T in total annual Capex by 2030 (not just hyperscalers), FY27 Q1 (May 20, 2026):

  “With analysts now forecasting hyperscale CapEx to exceed $1 trillion by 2027 and Agentic AI beginning to proliferate all industries, AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of this decade.”

For the risk tolerant, these breadcrumbs justify ratcheting up the bets on AI infrastructure, semis, and hyperscalers over the next few years.

But is it inelastic?

Perhaps we should take the time to look at what’s happening that may preclude any of these major players from pulling back in the foreseeable future regardless of the macro regime.

1. Claude Mythos

Beyond the cyber-security aspects and Project Glasswing, look at the benchmarks:

That’s a gigantic gap up - regardless of nuance around cost to serve. Not just holding, but a discontinuity. Google, who appeared to be in the drivers seat with Gemini 3, now feels 6 months behind. The race is on.

Look at this chart from METR (if you aren’t familiar with METR trendlines, brush up):

Does this look like a good time to cancel planned capacity you can afford in any case and with cloud revenues growing 63% YoY?

2. An OpenAI model has disproved a central conjecture in discrete geometry

We had IMO gold, now this.

One of the confirmation signals I have been personally waiting for is a unique contribution that isn’t long tail:

• an autonomous company turning a profit

• novel drug discovery

• cracking of a major unsolved proof like a millennium problem

• Materials science, even if shy of a room temperature superconductor

TLDR; Paul Erdős was a prolific mathematician that posed over a thousand problems (half unsolved) that have attracted various levels of professional human effort. With (disputed) buzz around models tackling some of these, OpenAI disproved a major one.

While this feels halfway there, there’s an asymmetry for me. It seems to tip the scale from “possible” to “nearly guaranteed” re: the revelation of a major discovery or solution within the next few years. These headlines will likely continue and their implications will sink in.

UPDATE: Google DeepMind just announced they have paired LLMs with the Lean language to solve 9 more, including 2 that have been unsolved for 56 years. Not an expert, but the headlines are trickling in.

What does this have to do with capex being inelastic?

The decision makers in this race see these trendlines and capability discontinuities and can’t afford to be caught out. It’s existential. This isn’t a new argument, but it’s probably essential to the idea to doubling down over and over on a cyclical sector.

A counterargument in the mid-term

What about the marginal AI infrastructure Capex customer? It’s pretty clear that the risk/reward for all of the major players will result in full steam ahead regardless of the macro picture, but what about the marginal buyers if a bond scare or headline scare like the Saaspocalypse triggers some reflexivity? In the mid term, I think it is worth defining who those marginal customers are and watching closely. Stay tuned.

I was long NVDA again for 3 hours yesterday. The company is of the highest caliber, has not participated as much as they deserve in the fantastic rally in semis this season, and seemed ripe for some recognition. The thesis was to capture any information reveal then move back to more convex opportunities.

Numbers out, crushed without a blemish, reaction muted. Moving on.

Market cap is one of my favorite vibe metrics for eyeballing an opportunity. In fact, my biggest successes this year (AMD, Intel) were due entirely to this phenomena. If you project the happy path forward where NVIDIA is a 10 trillion company, does it make sense that Intel (the only credible advanced domestic foundry) and AMD would hold a market cap of 100b and 250b respectively? No. One way or the other they would chip off more than 3% on a relative basis.

Don’t settle

If I can’t tell a simple story as to why a play has a chance of being high-skew over the next 2 years in addition to clear momentum and thematic fit, then I’ve given up before even starting.

Marvell and Nokia seem to be two candidates that have the right headroom, added both. Going to circle back on that later but found good primers out there from if you’re curious why.

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Full microsite here: https://macrodesk.ai/share/nvda-too-big/dacbba12/c

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Allow me to give a concrete example.

1. AVGO is really interesting, Mythos was trained entirely without NVIDIA in the stack. Let’s lever up with some 50 or 35 delta LEAPs.

2. Intel is a no brainer, it’s the only credible path to domestic advanced foundry. Add LEAPs.

3. NVDA is cheap right now, it’s being punished for its size and stickiness to the S&P, in the short to medium term it certainly has room to run. More options.

4. Memory isn’t cyclical, it’s a new secular trend trading at 8x fwd P/E. Let’s ride the momentum and pick up some shorter tenor debit spreads.

5. AMD is a catch up trade, whatever it’s worth, if NVDA is going to 6 trillion then AMD must go to 1 trillion, 100% upside.

6. .. and so on.

Next thing you know you’re holding 15 names… if these were normal equity positions that would be no problem, and perhaps desirable for tax loss harvesting. However, if you are using options to lever up your theme beta, you could be overpaying dramatically.

2. What’s the issue?

When you place a bet in this way, you’re making a directional bet but also betting that the magnitude of the move over that period is larger than what the market expects and has priced. Take SOXX as an example, which has a generally even 5-10% allocation to the above ideas.

• SOXX may have a 43% IV for LEAPs 2 years out

• Micron on the other hand may have an IV of 80%+ over the same period, same for Intel AMD etc.

If you were to bet on every name in this way on a pro-rata basis, you may be paying an average IV of 64% vs. 45% for the ETF itself. People pay a huge premium for the privilege of betting on single name outperformance.

3. Why does this happen?

Because individual moves partially “cancel out” inside of the ETF, the ETF itself is less volatile and carries lower premiums. There are professional “dispersion traders” that specialize on isolating this and trading it directly but we just need to be aware of it.

4. How I approach this

When I am bullish on a dozen names in the ETF for distinct reasons, this is actually the ideal time to bet on the ETF itself. Because the IV implies winners and losers when I see mostly winners (i.e. correlated), there’s a discount to harvest. For the single name bets, I limit these to the 2 or 3 that I feel will not only beat but CRUSH their individual IVs. Generally this means multibag potential for something like a Micron or Intel. I had that conviction on Intel when it was trading below a 100b market cap, but now I’m more uniformly bullish on it vis-a-vis the rest of the names in SOXX after a 450% rally.

5. The key point

You need to be VERY bullish on your single names when you’re paying up for high-IV names. Otherwise you may be better off betting on the sector itself. Don’t open more than a few positions until you understand this.

6. Bonus: what’s worth the premium to me today?

• I like Marvell due to it being a mixture of the Intel and AVGO thesis - has the market cap shape to multibag and is in place for the explosion of alternative ASICs. Worth the extra premia.

• I also like AVGO for the opposite reason, IV is actually looking very attractive (comparable to SOXX itself) but with a higher level of conviction vs. the sector itself.

• I feel the same about Oracle but that’s a story for another day. Perhaps could chime in on this one.

What companies are you willing to pay 100% IV for?