The AI Hardware Value Trap: Why 3x Earnings Can Lie | Stock Market

Cheap memory-chip multiples and NVIDIA/Broadcom's $40B gigawatt margin gap both face structural compression risk, not durable value.

• Memory margin mirage: HBM makers post 80-90% gross margins (up from negative just years ago) and trade at 2-4x forward earnings, but new fab capacity arriving ~2028 could collapse margins, making the 'cheap' multiple a cyclical value trap.
• Gigawatt cost math: Building a gigawatt of AI compute cost $40B in 2024, now $60B in 2026, but only ~$20B is raw silicon/packaging/memory cost — the remaining $40B is pure margin to designers like NVIDIA and Broadcom.

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