To The Moon

👾 Maybe It's Justified. 

The headlines are impossible to ignore: OpenAI keeps signing multi-billion dollar deals with$NVIDIA(NVDA)$  ,$Broadcom(AVGO)$  ,$Advanced Micro Devices(AMD)$  ,$Oracle(ORCL)$   and other tech giants. It's tempting to label this frenzy a bubble, driven by hype and FOMO. But before jumping to that conclusion, it's worth considering the strategic rationale behind these moves, and why OpenAI's positioning may actually be durable.

🤖First-Mover Advantage in AI Infrastructure

OpenAI isn't just a software company. Its aggressive investments in AI infrastructure - massive GPU clusters, custom AI chips and cloud partnerships - give it a first-mover advantage. Controlling the scale and sophistication of compute resources allows OpenAI to deploy models faster, train more powerful versions and offer services at a speed competitors struggle to match. In high-performance AI, time-to-scale matters just as much model architecture. 

↕️ Vertical Integration Reduces Dependency

There's an important notion in software engineering that every software engineers comply to: decoupling. It's a design principle that reduces dependencies between components to make software more flexible, maintainable and scalable. This notion is especially true in OpenAI's approach to signing multi-year cloud agreeements. The company is effectively vertically integrating its AI stack to reduce any dependency on any single hardware or cloud provider and can lower operational costs. In other words, these deals aren't just flashy headlines; they're a hedge against supply bottlenecks and rising GPU prices. 

💰 Revenue Diversification: Multiple Streams Driving Growth

OpenAI is expanding beyond ChatGPT, which accounts for roughly 70% of its revenue, by growing enterprise solutions, consumer subscriptions, and strategic partnerships. ChatGPT Enterprise is rapidly gaining traction among Fortune 500 companies, providing recurring revenue, while ChatGPT Plus now has over 20 million subscribers, generating around US$415 million in monthly revenue.

Strategic alliances with $NVDA, $AMD, $AVGO, $MSFT and $ORCL support custom AI chips and infrastructure, opening opportunities for licensing revenue and operational efficiencies. Additionally, ventures into traditional commerce space like $WMT and AI-powered consumer tools could create new revenue streams. OpenAI's diversification has helped drive a projected US$12.7 billion in revenue for 2025, up from US$3.7 billion in 2024, reflecting a 243% growth rate.

Bloomberg: The circle of AI money machine

♟️ Risk Management: Diversification as a Strategic Advantage

OpenAI's partnerships with fellow tech giants help mitigate multiple risks. By using both Nvidia and AMD's GPUs, it reduces dependency on a single supplier, protecting against production delays or price spikes. Cloud diversity with Microsoft Azure and Oracle ensures continuity and avoids single points of failure. This setup also buffers geopolitical or regulatory risks and allows workloads to shift seamlessly if one cluster experiences issues, keeping AI products running smoothly. 

🫧 Dot-com Bubble Comparison

Many people, and even OpenAI CEO Sam Altman himself, might acknowledged that investors were getting "overexcited about AI" and drew parallels with the dot-com bubble. Year-ahead earnings forecasts for S&P500 companies - forward 12-month (FTM) earnings per share (EPS) - are rising and underpin the stock market rally. Meanwhile, the ratio of stock prices to earnings estimates has barely increased, edging up to roughly 22.6 from about 22.3 at the start of the year. In fact, the ratio for Big Tech stocks, which have been driving the market surge, has actually dipped marginally.

- Then (1995-2000): Companies with minimal revenue were valued at billions; hype drove investments. Investors were blindly putting money into any tech related companies, most of which didn't generate revenues. Execution risk was often ignored.

- Now (2025): OpenAI's deals are large, yes, but they tie to compute assets, chips from $TSM and enterprise-ready products. While valuations are eye-popping, they are underpinned by strategic infrastructure and monetisable AI services. 

Key constrast: Dot-com valuations were largely narrative-driven; OpenAI's positioning combines infrastructure moat, plus revenue-generating AI products, and long-term compute partnerships.

📈 Some Stocks to Keep Medium-Long Term

- $NVDA - It is already the bellwether for AI compute demand. It benefits from surging data-centre chip demand and broad adoption of its GPU architecture. 

- $AMD - Second largest GPU maker in the US after $NVDA. Gaining traction with new AI chips and major enterprise supply deals.

- $ASML - Core supplier of EUV lithography machines.

- $TSM - Critical to global AI hardware, maufacturing the world's most advanced chips.

- $BABA - Dominant in China's AI field with its largest-ever language model, Qwen3-Max, that has more than 1 trillion parameters.

- $MSFT - Deep AI integration across Copilot, Azure and enterprise productivity.

- $GOOGL - Strong AI integration across cloud, search and advertising. Recently launches Gemini Enterprise, taking aim at Microsoft's OpenAI.

🌐 Conclusion: The Global AI Rally.

The AI surge echoes the exuberance of the dot-com boom - but this time, the foundations are firmer. Behind the headlines, real infrastructure, recurring revenue, and cross-industry adoption are emerging. Yet, valuations are stretched, and the market is rewarding scale and supply-chain control over pure hype. 

Investors should focus with a longer term outlook, such as medium- to long-term horizon, on companies owning compute, chips, data and enterprise AI integrations as they are the enduring pillars of the ecosystem.

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