Why AI Creates UNLIMITED Upside for Tesla and Mag 7 Stocks
Overall Thesis
Intelligence is the only good with infinite demand because it directly drives value creation, so compute supply will not outpace demand even with Google TPUs competing with Nvidia. Mag-7 companies each own horizontal layers (Nvidia chips, Amazon/Google/Microsoft cloud, Tesla embodied AI) that will compound at 30%+ and replace the 10% era as the new era of exponential growth.
Narratives
Nvidia's 70% margins are protected because supply remains vastly exceeded by demand, with 12 orders per chip produced. Google's TPU buildout adds supply but does not reduce demand, and inference plus training compute expand exponentially as intelligence has uncapped demand.
Key Arguments
- Nvidia has 12 orders for every chip produced, chronic undersupply
- Competition adds supply but does not reduce demand for intelligence
- Inference plus training compute expanding exponentially
- 70% gross margins intact as long as supply-constrained environment persists
Google owns roughly 3.5 billion users and a horizontal cloud layer via GCP, plus its own TPUs. Jo frames Alphabet as one of three cloud monopoly owners (with Amazon and Microsoft) of tens of trillions in infrastructure opportunity.
Key Arguments
- Google Cloud is one of three dominant hyperscalers
- 3.5 billion users through Google services
- Owns its own TPU chip stack
Microsoft is one of the three dominant hyperscalers providing the cloud layer that the entire AI industry runs on, though it relies on Nvidia and Broadcom chips rather than its own silicon.
Key Arguments
- One of three dominant cloud hyperscalers
- Key buyer of Nvidia and Broadcom chips
- Tentacle of intelligence into entire business economy
Tesla has a quasi-monopoly on embodied AI (robots, autonomous transport) which Jo values in the hundreds of trillions of dollars in infrastructure over time. Compound annual growth rates for Tesla and the rest of the Mag-7 approach 30%+ and give investors new paradigm returns.
Key Arguments
- Tesla quasi-monopoly on embodied AI (robots and autonomous vehicles)
- Embodied AI infrastructure TAM in hundreds of trillions
- Tesla builds its own chips, vertically integrated
- Mag-7 compound annual growth approximating 30%+
Amazon has the world's biggest AI cloud buildout via AWS and its own Trainium/Inferentia chips, giving it monopoly-like positioning as a horizontal layer the entire AI industry runs on.
Key Arguments
- World's largest hyperscaler AI buildout
- Own chip stack with Trainium and Inferentia
- Horizontal infrastructure layer for all businesses
Meta is the underdog of the Mag-7 but owns 3 billion users which Jo considers the entire productive population of Earth it can monetize. Does not build its own chips but buys heavily from Nvidia and Broadcom.
Key Arguments
- 3 billion users, entire productive population of Earth
- Large buyer of Nvidia and Broadcom chips