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The Edge Awakens: Why the Physical AI Upgrade Is Still in the First Inning

Published on April 26, 2026

Jordi Visser

In this week’s video, I explain why the physical upgrade of the world with AI is no longer a thesis but a real-time trade. Semis are now the largest level-2 GICS weight in the S&P 500 at roughly 17% (~$10T), having passed software in the last twelve months, and Nvidia, Broadcom, and Micron alone make up $7.5T of that weight. Jensen’s “five-layer cake” frames a $90 trillion physical AI buildout against a $120T global economy. That’s the capex path we’re already on, and it’s why the Jordi thematic basket is up 34% since Opus 4.5 released in November 2024 and kicked off the agentic age.

Beneath the headlines, Craig Fuller’s reversal from bearish in November to the most bullish he’s been in years, freight, rail, chemicals, and trucking at or near record levels, plus capital goods imports relative to consumer goods imports at 1991 highs confirms an industrial boom driven by AI paranoia, not autos or housing. Texas Instruments and Intel both flagged an industrial recovery and an edge-AI pull-through this week for CPUs, power semis, and microcontrollers. Power semis sat flat for five years through last week; they’ve now broken out vertically.

The implication: long semis, industrials, materials, energy. Short hyperscalers as the funding vehicle. Don’t own code-based SaaS. CPI is on path above 4% with real yields going negative, mirroring 1970s-style bottlenecks, Iran oil shock, fertilizer force majeure, ceramic capacitor and optical transceiver shortages, and DRAM capacity that needs to double or triple. Bitcoin looks like it has bottomed with MACD weeklies turning, and the Bitcoin proxy (Qs + gold + copper) shows the catch-up trade setting up into year-end.

Timestamps

(00:00–02:10) Setup: Why the physical upgrade theme is the real trade. Credits to the Craig Fuller and Dylan Patel podcasts this week, both are must-listens for this framework.
(02:12–03:52) Semis now 17% of the S&P and the largest level-2 GICS weight; Jensen’s “five-layer cake” and the $90T physical AI buildout against a $120T global economy.
(03:52–06:32) Thematic basket up 34% since Opus 4.5; code-based SaaS is a dead trade, not a mean-reversion. Hyperscalers are the funding vehicle as they spend to chase ROIC while semis rip.
(06:32–10:33) Craig Fuller flips from November bear to full bull, rail, chemicals, truck tonnage, and flatbed rejections at or near records. Capital goods imports relative to consumer at 1991 highs confirm the AI-paranoia industrial boom.
(12:27–13:50) CPI path above 4% with services PMI at the highest level since 2022, negative real yields return; fiscal stimulus from the One Big Beautiful Bill compounds the pressure.
(16:55–20:10) The Edge Awakens: Texas Instruments flags industrial and edge-AI recovery; Intel breaks out 20%+ on CPU pull-through. Upgrade cycles don’t need GDP growth, they need rotation inside the same unit volume.
(20:10–23:05) Power semis breakout after five flat years. OpenAI, Anthropic, Tesla, and SpaceX capex numbers revised materially higher; ERCOT peak demand already at capacity limits.
(23:05–27:17) Nvidia’s 800V DC push in South Korea; optical and silicon photonics as the efficiency story. Coherent, Lumentum, Corning, and Marvell all in the mix.
(27:17–30:32) Dylan Patel: abundance of ideas, scarcity of physical compute. DRAM capacity must double or triple; agentic CPU TAM tracking to $100B by 2030.
(34:58–39:51) S&P earnings concentration: Micron + Exxon + Chevron + Broadcom = 85% of revisions. MAG 7 ex-Nvidia earnings growth only 6.4%. Russell 1000 Growth in permanent reversal; Salesforce -9% on IBM print; Medallia private credit default wipes $5.1B.
(44:37–47:01) Bitcoin bottom in place with MACD weeklies turning, $95–100K target if it runs. The Bitcoin proxy (Qs + gold + copper) shows the catch-up setup into year-end; stablecoin and tokenization ETFs worth a look.

Watch here

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