INFO
MARKET MEDIA2026-08-25
OPEN SOURCECHANNELTheStreet
The AI Trade Is Changing — Here’s Where To Look For Opportunity Next
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The AI Trade Is Changing — Here’s Where To Look For Opportunity Next
Anastasia Amoroso notes that the AI trade is shifting away from chip stocks and highlights overlooked areas such as hyperscalers, power, and software as new opportunities for investors.
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- Anastasia Amoroso notes that the AI trade is shifting away from chip stocks and highlights overlooked areas such as hyperscalers, power, and software as new opportunities for investors.
- Corporate earnings are improving this year across various sectors, including small caps, mid caps, and international stocks.
- Amoroso warns that a disappointment in the AI trade, particularly related to semiconductor stocks, could derail the market, as 50% of the S&P is tied to this ecosystem.
- While demand for semiconductors remains strong, much of the enthusiasm has already been priced into the stocks, necessitating new developments to drive performance.
- Amoroso suggests that the tech trade is evolving beyond just GPUs to include CPUs and networking, which are crucial for efficiently connecting data centers.
- Our interpretation: The shift in the AI trade indicates a potential reallocation of investment focus from traditional semiconductor stocks to emerging sectors like power and software, which may offer better growth prospects.
INSTRUMENTS
NVDA
The discussion on the AI trade and semiconductor stocks directly relates to Nvidia's market position.
AMD
AMD is a key player in the semiconductor space, which is mentioned in the context of the AI trade.
MSFT
Microsoft's involvement in AI and software is highlighted as an area of opportunity.
SP500
The overall market sentiment and corporate earnings improvement can influence the S&P 500 index.
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05:00–10:00
- The market has expanded beyond AI, with defense emerging as a key focus due to the replenishment cycle following the Iran conflict and a commitment to re-industrialization.
- Hyperscalers are positioned at the forefront of the ROI on AI cycle, with cloud revenues continuing to rise even as capital expenditures may peak.
- There is a noted mismatch between the timing of capital expenditure deployment and the activation of cloud revenues, suggesting an inflection point for payback in the hyperscaler sector.
- Over 80% of software companies exceeded earnings expectations in the recent reporting season, countering concerns about a decline in the software sector.
- Investors are encouraged to focus on software companies that can effectively integrate AI capabilities and enhance workflows, as they stand to benefit from resolving chip bottlenecks.
- Our interpretation: The shift in focus from traditional semiconductor stocks to sectors like hyperscalers and software indicates a potential reallocation of investment strategies, which may enhance growth prospects in these areas.
INSTRUMENTS
NVDA
Nvidia is a key player in the AI and semiconductor sectors, which are discussed in the context of shifting investment focus.
MSFT
Microsoft's integration of AI capabilities in software is emphasized, indicating its relevance in the evolving market.
AMZN
Amazon's cloud services are part of the hyperscaler discussion, which is central to the AI investment narrative.
NASDAQ100
The discussion on technology and AI sectors suggests a broader impact on tech indices.
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10:00–15:00
- The speaker differentiates between horizontal software, which lacks sector expertise and spans multiple industries, and vertical software, which can leverage proprietary data for monetization within specific industries.
- Over 80% of software companies reported earnings that exceeded expectations, achieving a year-over-year growth rate of 20%.
- The leading software ETF, IGV, consists of 70% application software, much of which is horizontal and may be more vulnerable to AI disruption.
- Private credit is experiencing improved EBITDA growth and better coverage ratios, indicating a favorable outlook for this asset class.
- The private markets are becoming increasingly accessible to everyday investors, moving away from being predominantly an institutional-focused arena.
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- Many AI investment opportunities are currently concentrated in private markets, which may offer significant potential for investors.
- Private markets generally show higher gross margins and greater earnings growth compared to public markets, indicating a potential for long-term outperformance.
- Infrastructure is recognized as an uncorrelated asset class, providing low correlation to traditional stocks and bonds, and is expected to drive growth through data-centered power exposure.
- Investing in sectors with thin profit margins, such as consumer staples and discretionary sectors, is discouraged due to pressures from elevated energy costs and tariffs.
- The unpredictable nature of Bitcoin's behavior across various market cycles raises skepticism about its reliability as a risk barometer.
- Our interpretation: The current market environment suggests that diversifying into private markets and infrastructure may help mitigate risks associated with inflation and economic volatility, potentially leading to more stable returns compared to traditional equities and sectors with thin margins.
INSTRUMENTS
NVDA
Nvidia is directly mentioned as a key player in the AI sector.
NASDAQ100
The block discusses the AI sector broadly, which is a significant component of the Nasdaq index.
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20:00–25:00
- The speaker identifies memory stocks as the most overhyped investment currently.
- AI doctors are highlighted as the most underappreciated investment at this time.
- The speaker sees the AI trade with the most potential for profit within financials.
- New investments in the consumer sector are discouraged by the speaker.
- The S&P 500 is recommended as the best place to invest $10,000 today.
- The speaker predicts that the Fed will need to cut interest rates by year-end, which could surprise investors.
- Our interpretation: Anticipated Fed rate cuts, driven by inflation concerns, may lead to a shift in capital towards equities, particularly in financials and AI, while consumer stocks could face pressure due to their thin profit margins.
INSTRUMENTS
SP500
The S&P 500 is recommended as the best investment option.
JPM
Financials are highlighted as having the most potential for profit in the AI trade.
AUDUSD
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
EURUSD
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
GBPUSD
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
NZDUSD
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDCAD
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDCHF
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDDKK
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDJPY
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDNOK
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
USDPLN
The Fed's anticipated rate cuts are discussed, indicating a monetary policy shift.
INFO
MARKET MEDIA2026-08-24
OPEN SOURCECHANNELTheStreet
The Best AI Stocks to Buy Now — And One to Avoid
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The Best AI Stocks to Buy Now — And One to Avoid
Angela Zino notes that while there isn't easy money to be made in AI, there are still opportunities depending on the longevity of the current cycle.
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- Angela Zino notes that while there isn't easy money to be made in AI, there are still opportunities depending on the longevity of the current cycle.
- The focus has shifted from higher graphics to AI monetization strategies, with positive data points emerging from Q2 earnings season.
- Strong cloud numbers from hyperscalers indicate that AI monetization is ramping up, with good pricing uplift and bookings momentum from Neo Cloud players.
- Zino suggests that Nvidia's upcoming earnings report is crucial, and if investors do not own Nvidia, they should consider buying some ahead of the earnings announcement.
- Nvidia's relative performance has improved compared to the broader semiconductor industry, partly due to its exclusion from the momentum trade earlier in the year.
- Nvidia's price hikes on next-gen chip servers reflect pricing power, as rising component costs are being passed onto customers.
- Our interpretation: The current dynamics in AI and semiconductor markets suggest that investors may benefit from strategic positions in companies like Nvidia, especially as pricing power and demand indicators strengthen.
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- Nvidia's pricing power is demonstrated by a more than 15% increase in prices for next-gen chip servers, reflecting the necessity to pass on higher component costs to customers.
- If Nvidia's VRRubin ramp fails to meet expectations, it could prompt a reassessment of the strong buy rating, particularly if demand issues arise.
- The entire AI ecosystem is significantly dependent on Nvidia, indicating that any setbacks for Nvidia could adversely affect companies like Marvell and Broadcom.
- Marvell's stock has risen 167% year to date, and its recent pullback may present a buying opportunity, especially if the company can effectively communicate the potential upside from a recent Google announcement.
- Salesforce faces challenges and must demonstrate its value in a software market that has recently gained momentum, despite being down approximately 20% year to date.
- Our interpretation: The reliance on Nvidia within the AI sector suggests that its performance will be critical for the health of related stocks, making strategic positioning in Nvidia and its peers essential for investors.
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10:00–15:00
- The speaker highlights the necessity for Salesforce's core subscription business to remain robust, as any signs of weakness could lead to investor disappointment.
- A key aspect of Salesforce's growth narrative is the performance of its AI-oriented business, particularly the agent force, which is expected to gain momentum in the latter half of the year.
- If Salesforce's AI segment demonstrates strong growth and transitions pilot use cases to full production, it could foster increased investor optimism and a potential re-rating of the stock.
- The speaker categorizes Salesforce as a value trade, emphasizing the stability of its core business and the potential for margin enhancement.
- Upcoming IPOs from companies like Anthropic AI and OpenAI may introduce uncertainty in the software sector, as these firms could reinvest their proceeds to expand their offerings.
- Our interpretation: The evolving software landscape, particularly for Salesforce, indicates that while AI-driven growth opportunities exist, the market must contend with competitive pressures from new entrants, which could influence stock valuations and investor sentiment.
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- The speaker recommends a portfolio allocation of 40% in semiconductors, 40% in hyper-scalers, and 20% in software, reflecting a focus on growth within the tech sector.
- Emphasizing growth at a reasonable price, the speaker suggests maintaining some value exposure while investing in the IT sector.
- Microsoft is identified as the best growth stock at a reasonable price, noted for its disciplined management and long-term potential.
- AI spending is expected to be peaking, particularly with semiconductor sales having peaked mid-year, though attractive growth numbers are anticipated over the next two to three years.
- While chips remain a strong investment, the focus may shift towards networking-oriented plays rather than traditional memory chips.
- Our interpretation: The current market dynamics suggest a transition phase where investors should be cautious of potential peaks in AI spending and semiconductor sales, prompting a reassessment of growth expectations in tech and a balanced portfolio strategy.
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20:00–25:00
- The speaker expresses strong conviction in Microsoft as the leading AI stock.
- AMD is identified as the best AI stock to buy today, with significant earnings potential that remains underappreciated.
- Adobe is highlighted as a risky investment due to its reliance on content that could be easily replaced by AI.
- The first sign of trouble in the AI boom would be Neo Clouds cutting capital expenditures.
- The speaker believes the market is underestimating Meta's potential for AI monetization across various levers.
- Nvidia faces significant threats from hyperscalers developing their own custom silicon chips.
- Our interpretation: The current market dynamics suggest a need for investors to reassess their positions in AI stocks, particularly in light of potential shifts in capital expenditures and the competitive landscape.
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