Bill Gates on 20 years of winners and losers: Cisco, the dot-com pick-and-shovel seller, took 25 years—what about my AI stocks?
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Does contracting 60% of volume protect the same share of profit?
Assume a hypothetical manufacturer unrelated to actual SK hynix contracts. It produces and sells 100 units, of which 60 are covered by long-term contracts. Initially, every unit sells for 100 and costs 70 to manufacture, leaving 3,000 after subtracting manufacturing cost of 7,000 from revenue of 10,000. Assume all units are still delivered and paid for next period, but the contract price adjusts to 80 and the remaining 40 units sell for 60. Revenue becomes 60 × 80 + 40 × 60 = 7,200. Subtracting unchanged manufacturing cost of 7,000 leaves only 200. Knowing that 60% of volume is contracted does not fix or guarantee 60% of revenue or profit. Pricing adjustments and costs must also be examined.
Check for yourself
- Does the contract-coverage denominator represent production capacity, actual shipments or revenue?
- Which pricing, minimum-purchase, termination, delivery-delay and collection terms are established by public material?
Limits of application
All figures and price changes are assumptions, not estimates of actual contract ranges or floors. The remainder subtracts only manufacturing cost from revenue; it is neither operating profit nor cash flow and excludes selling and administrative expenses, capital spending, tax, inventory and payment delays.
- What to look for
- The video compares different share-price paths during internet adoption with today’s AI infrastructure suppliers. It shows why industry growth, entry valuation and sustained customer purchasing are separate questions.
- Why it matters
- You can distinguish the return basis behind peak-recovery claims from retrospective selection of successful companies, and separate contractual volume, pricing, delivery and collection. A separate calculation explores how profit can change even when a substantial share of volume is contracted.
Timeline
5 segmentsThe video presents Nvidia’s accelerated-computing demand thesis and SK hynix’s long-term agreements as differences from dot-com equipment suppliers. SK hynix’s 2026 results release says contracted volumes exceed 50% of production capacity for 2027 and 2028, with pricing reflecting market conditions within an agreed range. This does not fix or guarantee the same share of revenue, profit or stock performance, and the public material does not establish every contract’s cancellation, delivery and collection terms.