Warren Pies of 3Fourteen Research has been one of the clearer voices cutting through the macro noise lately, and a recent TV appearance gave me a line I haven’t been able to stop thinking about. Asked where real market strength lives amid tariff uncertainty and geopolitical turbulence, Pies zeroed in fast:
“I think that the secular trend that everyone wants to flock to is the AI story and the META group underneath that right now is, is, are the semis in the, the scramble for compute.”
—Warren Pies, 3Fourteen Research
The scramble for compute is the right mental model right now. If you’ve been watching the semiconductor space you can clearly see the demand signal has never been this unambiguous.
The Numbers Behind the Thesis
Look at what NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) just reported. Data center revenue hit $62.31B in Q4, up 75% year-over-year. Full-year revenue came in at $215.94B, up 65.47% YoY. Jensen Huang framed it directly: “Computing demand is growing exponentially — the agentic AI inflection point has arrived.” That’s a company with a 55.6% profit margin and +59.59% price appreciation over the past year telling you what it sees in its own order book.
Advanced Micro Devices (NASDAQ:AMD) is scaling its own piece of this. Data center revenue reached a record $5.38B in Q4, up 39% YoY. Lisa Su said: “We are entering 2026 with strong momentum across our business, led by accelerating adoption of our high-performance EPYC and Ryzen CPUs and the rapid scaling of our data center AI franchise.” AMD trades at a forward P/E of 29x with a PEG ratio of 0.5 — growth at a reasonable price if you believe the data center ramp continues.
On the demand side, Meta Platforms (NASDAQ:META) just committed $115-135B in CapEx for 2026, with a multiyear partnership spanning millions of Blackwell and Rubin GPUs. That money flows directly into the semiconductor ecosystem.
The Sector Vehicle: SMH
For investors who want broad exposure rather than single-stock concentration, the VanEck Semiconductor ETF (NYSEARCA:SMH) is the cleanest expression of Pies’ thesis. NVIDIA alone represents 19.18% of the fund, and the ETF spans the full supply chain from chip designers to equipment makers. SMH is up 8.84% year-to-date even as broader tech has struggled — a direct reflection of where Pies says the underlying strength is concentrated.
Pies also flagged the macro context honestly: energy and staples have been the strongest sectors year-to-date, while financials and tech have been negative. The VIX sits at 25.25, still in elevated uncertainty territory. Getting back to a normal cycle requires policy clarity that isn’t here yet. But within that turbulence, the compute buildout keeps running. If you believe agentic AI adoption continues to accelerate, and the revenue lines at both NVIDIA and AMD suggest it is, then the scramble for compute Pies described isn’t a trade. It’s the dominant capital allocation story of this decade.
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