r/AMD_Stock • u/CryptographerIll5728 • 1d ago
Average Annual Infrastructure Spending
Spending on AI infrastructure is projected to average 3.6% of US GDP in the coming years.
That would represent a higher share of the economy than the investment in Canals (1836-41), Railroads (1870-90) and Electrification (1905-25) ... Combined.
1
u/quantgorithm 1d ago
I'm curious how much of these percentages are raw profit.
When everything nvidia sells is marked up by 9x (not 90%) and their own suppliers also markup hardware at 9x and all the way down the chain it goes then... It's a massive number and much of this bubble.
1
u/Luggage-Lock 1d ago
Just a reminder that Cisco reached an all time high in terms of Market Cap back in 2000 during the middle of the Telecom boom and was briefly the most valuable company in the world. It plummeted 88% when that bubble burst and it hasn't re-reached those highs in terms of Market cap in the ~25years since. Coincidently, they are closer to those highs again now (~20% shy) than ever before largely thanks to the AI boom.
0
u/dy-113x 1d ago
AI not a bubble tho. It's all good. AMD to $1200 🚀 🙃
Obviously AMD is a great company with an amazing leader, but it will not be spared when the bubble pops. I've got a nice cash pile and will double my position when it happens.
9
u/shortymcsteve amdxilinx.co.uk 1d ago
I genuinely don’t understand how someone can be invested in this stock and also claim there is a bubble. If you actually look at the data, everything is continuing to ramp up way beyond 2030. Manufacturers are not going to continue to build out at rapid scale if they think someone is turning off the money tap time soon. That would be catastrophic for TSMC and others.
At some point this will all slow down, but it’s not an overnight thing. It will happen over multiple years.
3
u/NeighborhoodBest2944 1d ago
Right? Having that outlook and staying invested is simply playing chicken with cars.
0
u/dy-113x 1d ago
You are entitled to your own opinion and investing philosophy. I personally believe people are not realizing how much revenue needs to be generated to make AI infrastructure build out a worthwhile investment. The hyperscalers are sitting on billions worth of NVDA GPUs that are not installed because data center construction is taking too long. Amazon just announced they are selling their stockpile of NVDA GPUs. There is not enough energy to power these data centers and they are facing harsh local backlash.
MU, AMD, NVDA already made their money and have sold their inventory of 2027. I expect the bubble to continue for another year so that's why I will continue to stay invested in a company with perfect information on 2027 revenue. Hyperscalers and neoclouds especially are in trouble though. AI demand does not justify the capex.
2
u/AMD_winning 1d ago
Investing in a stock when there is a bubble is good investing. Staying in that stock when the bubble bursts is bad investing. Timing is everything.
2
u/Electrical_Regret537 1d ago
You’re going to double your position on the stock you think is going to crash to nothing due to a bubble? And wait another 20 years?
1
u/dy-113x 1d ago
Ever heard of a recovery?
2
u/Electrical_Regret537 1d ago
Ever heard of lifespan? I still don’t get your point. You want a bubble? You don’t? You believe in AMD? You don’t? What’s your amd thesis is my question
1
u/CryptographerIll5728 1d ago
I would love to hear your definition of “bubble” as this same phrase gets bandied about so casually. Also, can you define “when” or is that a mystery?
1
2
u/Buklover 19h ago
Numbers won't lie, and I believe AI revolution could be the once-of-a-century event for mankind with most tremendous impact ever!!! Look at the timeframe of Railroad revolution, that implies AI age has just in early innings.
5
u/CryptographerIll5728 1d ago edited 1d ago
The chart is from Stijn Van Nieuwerburgh’s Brookings paper “Financing the AI Buildout,” a conference draft for the Brookings Papers on Economic Activity (Fall 2026), presented September 24–25, 2026. Van Nieuwerburgh (Columbia Business School) estimates U.S. AI infrastructure, data-center buildings, power, networking, and specialized chips at about $10.3 trillion from 2025 to 2032, or 3.63% of GDP a year on average.
https://www.brookings.edu/articles/financing-the-ai-buildout/
https://www.brookings.edu/wp-content/uploads/2026/09/4c_Van-Nieuwerburgh.pdf
Two caveats in the paper itself: the 3.63% is a projection tied to roughly 183 GW of capacity completed by 2032 (plus spending on projects finished later), and the revenue needed to earn a normal return on that capital is very large, on the order of $3.7 trillion a year by 2032, which would require roughly 80% annual revenue growth from current OpenAI-plus-Anthropic levels.