▶ Full Post Text
Not including China, there are approximately **4.92 to 4.99 billion internet users globally.**
In a recent investor presentation, OpenAI projected 100B in ad revenue by 2030, assuming it gains 2.75 billion weekly users over that timeframe.
[https://finance.yahoo.com/sectors/technology/articles/openai-projects-2-5-billion-115959443.html](https://finance.yahoo.com/sectors/technology/articles/openai-projects-2-5-billion-115959443.html)
Interestingly 2.75 billion users is equivalent to 54 percent of all non-Chinese internet users.
As a side note, AI energy demand currently consumes about 3 percent of total US electricity. Analysis and AI companies project this to climb to about 10 percent by 2030. The means with which that energy demand will be met, and most importantly the nonlinearity of commodity prices when your demand is large enough to outstrip supply, has not been factored into the already lofty capex (neither has the skyrocketing cost of ram).
On the other hand, if future earning estimates for semiconductors are indeed correct, then the PEG given those projections shows they are actually very cheap (1.1 vs 1.7 dot com era). While any resolution to the Iran war will crash energy prices and likely be good for stocks in general. Finally there is (or at least there was) the chance of interest rate cuts. so this leads me to the conclusion that a Long Strangle is the obvious strategic move going forward.
To achieve this, I’m buying 50k in out of the money puts in soxl, 20k out of the money calls on DRAM, Nebius, and Vertiv. I also have about 25k in AMAT stock to hold through its earnings season, 50k of Nvidia I bought during Covid, and a bunch of QQQ and VGT from around the same era. I’ve also increased positions in Netflix, Berkshire, and Microsoft. The 125k of upro I can’t sell for tax reasons I’ve covered by a 20k in the money call, which should pay for some of the puts and calls if the market stays flattish.
I don’t enjoy making extreme bets, in some way this is just a tax efficient way to hedge against oil prices rising and these lofty claims by Sam Altman. A 20 percent move on semiconductors over 6 months or shorter offers at least 4 to one returns these days in the options market. My last puts against Navient, ABR, FSK and the rest were a great hedge for the last 6 months, but im 95% out of that position so I need a new hedge. do you think this is the next move, and if not what’s your plan?