Reddit Investor Sells NVIDIA, Alphabet, Microsoft Over Estimated $2 Trillion AI Gap
A Reddit investor who goes by 'u/soukstah' in the r/stocks community argued that consumer and enterprise artificial intelligence (AI) spending needs to reach nearly $2 trillion. He sold his last shares of NVIDIA Corporation, Alphabet Inc., and Microsoft Corporation based on this number.
The investor's math starts with return on invested capital (ROIC). If hyperscalers like Alphabet and Microsoft want their historical 30% ROIC, they need $636 billion annually, according to the r/stocks community. This is ten times the current run rate of roughly $70 billion in AI cloud revenues.
The investor concluded that software sales of this size aren't coming anytime soon because consumers are used to free digital products. He credited Bain & Company's technology report, which states that sustaining the AI buildout would require an AI market approaching $6 trillion annually by 2031.