Let’s be clear about the AI Revolution.
You no doubt are seeing numerous people calling this a “bubble” that is about to burst at any moment. These individuals may be correct in claiming it’s a bubble. But there are NO signs that it’s about to end. In fact, investors who take the right approach here can produce extraordinary gains. And these kinds of opportunities only come around once every few decades.
Let me explain.
The AI revolution is being driven by ONE thing: capital expenditures.
Big Tech/ hyperscalers like Microsoft (MSFT), Meta (META), Amazon, (AMZN) and the like have committed to spending over $600 BILLION on the AI build out this year alone. To put that into perspective, the entire internet buildout of the late 1990s was ~$1 trillion. Big Tech is spending that every 18 months!
This money is going to be spent regardless of who ends up the market leader for AI. And it’s flowing into small, growth-related picks and shovels plays that are EXPLODING higher. Yes, eventually the capex cycle will turn… but in the meantime those investors who believe the doom and gloom are missing out.
Let me show you what I mean.
Micron (NASDAQ: MU) is one of the world’s largest makers of memory chips. The AI buildout requires enormous amounts of a specialized chip called High Bandwidth Memory (HBM), which feeds data to Nvidia’s GPUs at very high speeds. Micron is one of only three companies in the world that can make HBM (along with Samsung and SK Hynix). HBM accounted for less than 5% of Micron’s DRAM revenue just a few years ago, compared to roughly 30% projected for 2026, with much of that production already sold out under long-term contracts.
The stock trades at a forward P/E of 12. Is it a bubble? It’s difficult to say. But those investors who rode this stock up the last year are up over 800%.
Let’s take a look at another AI-infrastructure play.
Nebius (NASDAQ: NBIS) is essentially a specialized cloud provider that rents out massive GPU computing power to businesses training and running AI models.
Instead of building their own expensive data centers full of Nvidia GPUs, AI companies pay Nebius to use theirs. It’s sometimes called a “neocloud” — not as broad as AWS or Azure, but purpose-built for AI workloads, which makes it faster and more efficient for that specific use case.
Is it in a bubble? It’s hard to say. The company is one of only a handful of firms in the world doing what it does: meeting the demands for one of AI’s largest bottlenecks. And here again, those investors who played the AI buildout correctly are up a huge amount: NBIS shares are up 500+% in the last 18 months.
The point I’m trying to make here is that there are literal fortunes to be made with the right AI investment strategy. Yes, at some point the music will stop for this tech revolution, but we’re nowhere near that point. And in the meantime, fearmongering is costing investors the opportunity to produce extraordinary gains.
On that note, we recently published a special investment report outlining three AI plays Wall Street has yet to understand. The report is title The AI Plays Your Broker Doesn’t Know About and we are making just 99 copies available to the investing public.
To reserve one of the remaining copies…
Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
