$SNDK
Today there’s news that Nvidia is taking the lead to arrange syndicated financing of RMB 500 billion to build data centers.
Many friends are saying it’s a Ponzi scheme or revolving/rollover financing, but I don’t think that’s the important point.
Let me share my own analysis:
Based on the current U.S. Treasury long-end yield of 5.25%, plus an additional 3% risk premium, plus profit margin—the return rate of this financing is at least at an annualized level of 9% or higher.
If there are bonds with high interest rates, sufficient scale, collateral, and cash flow that you can buy, then why would you need to buy AI equipment stocks?
Under the same premise that the AI bull market is still ongoing:
A collateralized bond with an annualized 9% return is far more attractive than a stock trading at a forward P/E of 6 (SanDisk, Micron), isn’t it?
Still bearish on storage
Today there’s news that Nvidia is taking the lead to arrange syndicated financing of RMB 500 billion to build data centers.
Many friends are saying it’s a Ponzi scheme or revolving/rollover financing, but I don’t think that’s the important point.
Let me share my own analysis:
Based on the current U.S. Treasury long-end yield of 5.25%, plus an additional 3% risk premium, plus profit margin—the return rate of this financing is at least at an annualized level of 9% or higher.
If there are bonds with high interest rates, sufficient scale, collateral, and cash flow that you can buy, then why would you need to buy AI equipment stocks?
Under the same premise that the AI bull market is still ongoing:
A collateralized bond with an annualized 9% return is far more attractive than a stock trading at a forward P/E of 6 (SanDisk, Micron), isn’t it?
Still bearish on storage