Dell earnings and the broadening AI trade (with Tom, Jamana)

Richard Clode views Dell's earnings as the next leg of the AI trade, driven by demand for AI servers and CPUs. He argues the AI market is not zero-sum but expanding exponentially, and investors should own leaders across all vectors (GPUs, CPUs, storage). He is confident in the monetization of AI, citing Anthropic's rapid revenue ramp, and sees Nvidia's new shareholder return program as a key inflection point.

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Janus Henderson 7.8
Asset Manager $330.00B
Richard Clode 8.5

Dell earnings and the broadening AI trade (with Tom, Jamana)

ndx

This is not a zero-sum game. This is an addressable market that is just expanding exponentially.

8/15/2025 6:41:23 PM	short term up	7 days later	-1.22%	-1.22%

Tom

Asks what the Dell move tells us about the broadening of the AI trade and how investors should position.
Richard Clode

This is the next leg of the AI trade, moving from GPU demand to AI CPUs and orchestration, leading to much stronger server demand. The key surprise was Dell's ability to fulfill demand and expand margins.
Jamana

Asks if investors should cycle out of GPU makers and hyperscalers into broader names.
Richard Clode

This is not a zero-sum game. The addressable market is expanding exponentially. Investors should own leaders across all vectors (GPUs, CPUs, storage, optical).
Tom

Asks if the vertical trajectory of memory chip stocks (SK Hynix, Micron) is justified.
Richard Clode

The rally is justified by earnings growth. These companies make extraordinary amounts of money (e.g., SanDisk makes more than Goldman Sachs). However, doubling market cap in 48 days is very fast.
Jamana

Asks about the risk of leverage building up in the system from retail players.
Richard Clode

Putting leverage on cyclical stocks will end in tears. However, the earnings growth looks durable due to five-year contracts with financial teeth.
Tom

Asks what the mega IPOs will do to liquidity and market movements.
Richard Clode

The big difference vs 2000 is these companies are leaders and make money. The bigger supply issue will be when lockups expire next year, not the IPOs themselves.
Jamana

Asks if the CapEx and monetization question has been answered by the earnings story.
Richard Clode

Yes, the narrative has pivoted from 'is this justifiable?' to 'let's underpin this into 2030'. The launch of generative AI and its productivity value is exponentially higher than a copilot world.
Tom

Asks about Nvidia's new shareholder return program and if it's an inflection point.
Richard Clode

Yes, it's a key announcement. Nvidia has the free cash flow to buy back stock, unlike hyperscalers. This parallels Apple in 2012, which used a shareholder return program to signal its earnings were real.

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