EP 153: Nebius and Neocloud Insights, WFE + Memory Madness, Networking Upside

The Circuit explores the financial sustainability and future prospects of neocloud companies like Nebius and CoreWeave, questioning their reliance on hyperscalers like Microsoft and Meta for revenue. Ben and Jay examine Nebius's recent earnings, noting a revenue miss despite positive forecasts for EBITDA and ARR, and debate whether ARR is a reliable metric for hypergrowth companies. They also address the broader AI landscape, cautioning against double-counting of capital expenditures and electrical capacity, and discuss the potential for market consolidation. The conversation shifts to Applied Materials' strong earnings driven by memory demand, highlighting their R&D collaboration with Samsung and the possibility of a trillion-dollar semiconductor industry by 2026. Finally, they analyze Cisco, Arista, and Astera Labs, focusing on the risk of these networking companies being "designed out" by vertically integrated hyperscalers.