Goldman Sachs' Urgent Warning: This AI Stock Crash Just Created A MASSIVE Valuation Disconnect — Transcript

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1. 0:05Wall Street is dumping semiconductor
2. 0:07stocks. AI valuations are collapsing and
3. 0:10investors are questioning whether the
4. 0:12biggest technology spending boom in
5. 0:14history has finally gone too far. But
6. 0:16beneath the panic, something
7. 0:18extraordinary is happening. Earnings
8. 0:20forecasts are accelerating while stock
9. 0:22prices are falling. Following November's
10. 0:25midterm elections, fears surrounding
11. 0:27data center regulations, electricity
12. 0:30shortages, AI financing, and slowing
13. 0:33infrastructure investment triggered a
14. 0:35brutal semiconductor sell-off. Some of
15. 0:37the industry's biggest names have fallen
16. 0:39between 25% and 60% from recent highs.
17. 0:43Yet, Goldman Sachs sees a valuation
18. 0:46disconnect. Its semiconductor research
19. 0:48highlights leading AI businesses trading
20. 0:50at approximately 12 and 13 times
21. 0:53conservative 2028 earnings assumptions.
22. 0:56Meanwhile, institutional analysts are
23. 0:59increasingly questioning whether markets
24. 1:00have confused short-term uncertainty
25. 1:03with deteriorating fundamentals.
26. 1:05Remember Micron's extraordinary rally?
27. 1:08The memory manufacturer surged from
28. 1:10roughly $100 in early 2025 to above
29. 1:14$1,200
30. 1:15at its June 2026 peak, an increase
31. 1:18exceeding 1,000%.
32. 1:21But 2026 has also demonstrated how
33. 1:24violently sentiment can reverse even
34. 1:26when earnings continue climbing. Now,
35. 1:29another disconnect is emerging. AI
36. 1:31accelerators, custom silicon, high-speed
37. 1:34storage, and advanced memory remain
38. 1:36essential to the next generation of
39. 1:38computing. Today, we're examining five
40. 1:41companies positioned across that
41. 1:43infrastructure chain. An emerging AI
42. 1:46challenger, a custom chip powerhouse, a
43. 1:49storage specialist, a memory giant, and
44. 1:51the industry's dominant computing
45. 1:53platform. Their valuations, earnings
46. 1:56projections, institutional assessments,
47. 1:58and upcoming catalysts reveal why this
48. 2:01sell-off deserves a closer examination.
49. 2:04First is Advanced Micro Devices, ticker
50. 2:07AMD, where a sharp correction has
51. 2:10collided with some of the strongest
52. 2:11growth projections in semiconductors.
53. 2:14AMD's third quarter revenue surged 45%
54. 2:17to 13.4 4 billion, while data center
55. 2:21revenue jumped 97% to $8.5 billion.
56. 2:25Management expects fourth quarter
57. 2:27revenue around $17 billion, with data
58. 2:30center sales potentially rising another
59. 2:3250% sequentially, but 2027 is where the
60. 2:36numbers become extraordinary.
61. 2:38CEO Lisa Sue projects revenue growth
62. 2:41exceeding 80%, potentially lifting
63. 2:44annual sales toward $94 billion. The
64. 2:47catalysts are AMD's Instinct MI455
65. 2:51accelerators, Helios Rackcale AI
66. 2:54systems, and EPYC server processors.
67. 2:57Demand for EPYC is accelerating as AI
68. 3:00agents require CPUs to coordinate
69. 3:03applications, retrieve data, and manage
70. 3:05increasingly complex workloads. Google's
71. 3:09next generation TPU infrastructure also
72. 3:11incorporates EPYC processors, extending
73. 3:15AMD's opportunity into custom AI
74. 3:17systems. Despite these developments, AMD
75. 3:20has experienced a correction approaching
76. 3:2328%. Research analyst Giannis Zorpanos
77. 3:26estimates fair value between $75 and
78. 3:30$765
79. 3:31per share, while Summit Research's
80. 3:34discounted cash flow analysis suggests
81. 3:36approximately $634.
82. 3:39[music] Quarterly free cash flow
83. 3:41declined to $554 million as inventory
84. 3:45expanded ahead of anticipated shipments,
85. 3:47making execution critical. The
86. 3:50opportunity is clear. AMD is becoming a
87. 3:53broader AI infrastructure supplier, not
88. 3:56merely an alternative GPU manufacturer.
89. 3:59Moving from AI computing challengers to
90. 4:01custom silicon, our second company is
91. 4:03Broadcom, ticker AVGO, whose growth
92. 4:07prospects look dramatically different
93. 4:09from its recent share price performance.
94. 4:11Broadcom designs specialized AI
95. 4:14accelerators, high-speed networking
96. 4:16equipment, and enterprise infrastructure
97. 4:18software. Its custom chips help
98. 4:20hyperscalers optimize computing
99. 4:22performance and reduce dependence on
100. 4:25generalpurpose accelerators. Following
101. 4:27November's sell-off, shares declined
102. 4:29approximately 15%, including a single
103. 4:32session loss exceeding 10%. Yet,
104. 4:35Broadcom generated $ 31.9 billion in
105. 4:39free cash flow over the first 9 months
106. 4:41of its fiscal year. The company's next
107. 4:43growth engine is custom AI
108. 4:45infrastructure. Research discussing
109. 4:48Anthropic's financing arrangements cites
110. 4:50approximately $161 billion in
111. 4:53infrastructure commitments and $63
112. 4:56billion in secured financing supporting
113. 4:58future deployments. These commitments
114. 5:00are not equivalent to immediate Broadcom
115. 5:03revenue, but they illustrate the scale
116. 5:05of potential demand. Meanwhile, Google's
117. 5:08expanding TPU ecosystem creates another
118. 5:11substantial opportunity. Wall Street
119. 5:13projections cited in recent research
120. 5:15place fiscal 2027 revenue near $174
121. 5:19billion, while earnings estimates imply
122. 5:22approximately 70% growth. At around $300
123. 5:26per share, Broadcom was trading near 15
124. 5:29times projected fiscal 2027 earnings.
125. 5:32Analyst Bowden Cuchery estimates fair
126. 5:35value at $430,
127. 5:38approximately 43% above that price. The
128. 5:41intriguing disconnect. A cashg
129. 5:43generating AI infrastructure leader is
130. 5:46being repriced while its prospective
131. 5:48custom chip deployments continue
132. 5:50expanding. Our third opportunity shifts
133. 5:52from processing information to storing
134. 5:54it. SanDisk, ticker SNDK, a company
135. 5:58whose stock has plunged roughly 60% from
136. 6:01its highs despite extraordinary
137. 6:03operating results. SanDisk produces NAND
138. 6:06flash memory used in enterprise
139. 6:08solid-state drives, cloud
140. 6:10infrastructure, and consumer storage. As
141. 6:13AI systems generate enormous data sets,
142. 6:16storage capacity becomes increasingly
143. 6:18important alongside computing power.
144. 6:21SanDisk's fiscal first quarter revenue
145. 6:23surged approximately 378%
146. 6:26year-over-year to 11 billion, while
147. 6:29gross margins reached an exceptional
148. 6:3285%.
149. 6:33Adjusted free cash flow approached $5.7
150. 6:36billion, reflecting stronger memory
151. 6:39pricing and constrained industry supply.
152. 6:42Management's second quarter revenue
153. 6:43outlook centers around 12.4 billion,
154. 6:47while data center nan demand is
155. 6:49projected to grow approximately 40% in
156. 6:52calendar 2027. Now consider the
157. 6:55valuation. Recent research places
158. 6:57SanDisk's forward earnings multiple near
159. 7:003.5 times, reflecting investor concerns
160. 7:03that today's exceptional margins may
161. 7:05eventually normalize. Analyst Gita Zizus
162. 7:08estimates fair value near $1,163
163. 7:12per share, approximately 40% above the
164. 7:15recent price. SanDisk also reported
165. 7:18around $5.1 billion in cash, no debt,
166. 7:21and an upcoming 8for1 stock split
167. 7:24scheduled for November 19th. Its
168. 7:26emerging high bandwidth flash technology
169. 7:29provides another potential catalyst for
170. 7:31AI inference. SanDisk's investment story
171. 7:34centers on whether today's storage
172. 7:36shortage can sustain elevated earnings
173. 7:38longer than the market expects. And that
174. 7:40brings us to our fourth company, Micron
175. 7:43Technology, ticker MU, where the AI
176. 7:46memory boom could eventually evolve into
177. 7:48something even bigger, a roboticsdriven
178. 7:51demand cycle. Micron manufactures DRAM,
179. 7:54high bandwidth memory, and NAND storage,
180. 7:57making its products essential across AI
181. 8:00accelerators, servers, smartphones, and
182. 8:02autonomous systems. Despite declining
183. 8:05approximately 35% from recent highs,
184. 8:08Micron's fiscal 2026 net income reached
185. 8:11roughly $85 billion. At a recent price
186. 8:15near $690,
187. 8:17shares traded around 9 times trailing
188. 8:19earnings and approximately four times
189. 8:21projected fiscal 2027 earnings. Demand
190. 8:25visibility is another important
191. 8:26distinction. Recent research indicates
192. 8:29more than 75% of fiscal 2027 shipments
193. 8:33are committed. While competitor SKHinix
194. 8:36expects industry memory demand to remain
195. 8:38exceptionally strong through 2030,
196. 8:41robotics could extend that opportunity.
197. 8:44Nvidia's Jetson Thor platform already
198. 8:46supports 128 GB of LPDDR 5x memory,
199. 8:51illustrating the growing memory
200. 8:53requirements of physical AI. Micron's
201. 8:56board has also authorized $ 35.16
202. 8:59billion in share repurchases with
203. 9:02December 9th identified as an important
204. 9:04potential resumption date. Research
205. 9:06analyst James Ford maintains a $1,500
206. 9:10valuation objective for October 2027,
207. 9:13while Bowden Cuchery estimates fair
208. 9:16value near $1,791.
209. 9:20The question is whether investors are
210. 9:22anticipating another traditional memory
211. 9:24downturn while overlooking a longer
212. 9:26AIdriven expansion. Finally, we reach
213. 9:29Nvidia, ticker NVDA, the company at the
214. 9:33center of the AI revolution and perhaps
215. 9:36the most closely watched valuation reset
216. 9:38in the industry. Nvidia's competitive
217. 9:41advantage extends far beyond GPUs. Its
218. 9:44Blackwell accelerators, upcoming Vera
219. 9:46Rubin architecture, high-speed
220. 9:48networking and CUDA software ecosystem
221. 9:51create an integrated platform for AI
222. 9:53computing. Yet shares recently fell
223. 9:56approximately 26% in 1 month. According
224. 9:59to November research, Nvidia's forward
225. 10:02earnings multiple compressed to around
226. 10:0419 times compared with its 5-year
227. 10:06average near 42 times. Its forward PEG
228. 10:10ratio declined to approximately 0.38.
229. 10:13Consensus estimates cited in that
230. 10:15research project, fiscal 2028 earnings
231. 10:18near $15.92
232. 10:21per share, representing approximately
233. 10:2371% growth. Institutional interest
234. 10:27remains significant. Goldman Sachs has
235. 10:29highlighted compelling semiconductor
236. 10:31valuations, while Mizuo's Jordan Klene
237. 10:34has described Nvidia's valuation as
238. 10:36unusually depressed. NVIDIA also faces
239. 10:39competition from custom accelerators,
240. 10:42export restrictions and questions
241. 10:44surrounding AI infrastructure financing,
242. 10:47but hyperscaler investment, Blackwell
243. 10:49deployments, networking demand, and the
244. 10:52Vera Rubin product roadmap remain
245. 10:54important growth catalysts. With another
246. 10:56earnings report approaching on November
247. 10:5817th, investors will be watching revenue
248. 11:01guidance, margins, [music] and customer
249. 11:03demand closely. The central question,
250. 11:06has Nvidia's share price fallen faster
251. 11:08than its underlying earnings
252. 11:10opportunity?