Memory, reasoning, quantum, space… The second wave of the AI rush has begun
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Earlier this month, in the Vatican’s Synod Hall, Pope Leo XIV did something no pope had done before. He stood on a platform next to him Anthropic Christopher Olah personally presented an encyclical on artificial intelligence… and he titled it Wonderful humanity.
This coincided with the 135th anniversary of its founding New thingsthe papal encyclical of 1891 that addressed the barons of the Industrial Revolution. This was not a coincidence… the symbolism was intentional. In 1891, Leo XIII faced the steel and railway giants of his day. This month, Leo the 14th will face off against our tech moguls.
His charge was simple: the guys who make AI dress like priests… hoodies and sneakers instead of priestly clothing, TED talks instead of sermons, a “mission to change the world” taken straight from the Bible… and are self-proclaimed architects of a new age for humanity.
The Pope’s response was that they built recklessly, without a moral compass, in service of what he calls a “culture of power.” A few hours after the papal encyclical was dropped, a Silicon Valley venture capitalist tweeted: “Bad take from the Pope.”
This exchange, in miniature, tells you all about the moment we’re living in.
Building AI is now big enough, fast enough, and important enough that it has invited the Vatican into the conversation. Trillions of dollars are being funneled into computing, chips, satellites, and data centers…and almost none of it slows down for a theological discussion.
Which leaves investors with a very different question than the Pope. He wants to know where we’re going. We must know who builds the road…
Timing is everything here. For example, the Gold Rush brought fortunes to those who arrived early. Those who showed up late were left holding the bag. The AI rush is now moving beneath our feet.
The first wave was about training. The next wave is about inference, coordination, and the strange new geography of computing itself, including data centers in space.
If you are still pricing these stocks like the old cycle, you will miss the new cycle. The winning names at this stage are not the obvious ones.
To get a sense of who’s building the path to the AI boom, let’s review five of the best AI infrastructure stocks. Simply click on the video below to watch this week’s episode of Being exponentialWhere I swear all this:
AI Infrastructure Stock: Micron(MU) – The trillion-dollar memory thesis
Micron (in) I just joined the trillion dollar club, and Wall Street is finally catching up to what we’ve been saying for months. The memory cycle has historically lasted two to five years before supply outstrips demand. This time is different. Hyperscaler capex will rise into 2030. This means that HBM, DRAM, NAND, and AI storage will remain hot for much longer than the analyst consensus indicates. I see a path to roughly $200 billion in EBITDA over the next four to five years, which gets you to a $2 trillion valuation at a conservative multiple of 10x. The stock is overbought in the near term, so I would allow it to retreat to the $700 to $800 area before buying. If you already have it, stay in your seat.
Qualcomm (Qcomm) – The sleeping chip arrow wakes up
The next domino has toppled. Qualcomm (QCom) is no longer just an AI story or a smartphone story. With the launch of the AI 200 and AI 250 platforms, this has become a data center inference story — and it has just made ByteDance, one of the biggest users of inference on the planet, a customer for TikTok’s workloads. Estimates are about to be revised higher, and the stock still trades at just 19 times forward earnings while its peers sit at 30 to 50 times. The chart has just reclaimed the breakout zone from $230 to $240, which is now a technical floor. It can be purchased here.
Planet Labs (PL) – Data layer for the space economy
Planet Laboratories (but rather) operates an Earth observation business with a gross margin of 50% to 60% and is growing at 30% plus annually. This is the word. The ceiling is Sun Catcher Project Google’s plan to launch AI data centers into orbit in 2027, with Planet Labs already on the table. Orbital computing is one of the biggest growth sectors of the next decade, and PL has a real seat. I see a path to EBITDA of $300 million to $500 million within five years and a market cap of $30 billion to $50 billion. Don’t chase here. Buy the dip towards $40.
Ion Q (Ion Q) – Technical leader in quantity
The US government has just announced a $2 billion shopping spree across nine quantum names – and Ion Q (Ionic), the undisputed commercial and technical leader, was not included in the list. strange. I think a larger segment is coming. Either way, the IonQ is up 12% on the day, the 200-day moving average is sloping higher for the first time since early 2026, and the chart is in full retracement mode. Forget current revenues. The market cap is $23 billion versus a long-term TAM measured in the trillions. It can be purchased here.
Arm Holding (ARM) – From the GPU world to the CPU world
The architecture shifts from training to inference, and inference needs a coordination layer – central processing units (CPUs). arm (arm) has just launched its new AGI CPU and counts every Hyperscaler as a client. Revenues are set to double by more than 30% by 2030, with EBITDA margins increasing from 45% to 50%. Yes, it trades at 116 times EBITDA. For EBITDA growers of 40% to 50% at the center of the heuristic shift, this is defensible. I’ll wait for a pullback towards $240 to $250 to add it.
One warning before you go
Five AI infrastructure stocks I like in one week is unusual. It is also in line with price action that has begun to align in late 2021 (speculative technical collapses during the Dow Jones decline). This is not a summit, nor is it even a yellow flag. The Pope can debate the spirit of the machine, and he should do so controversially. It’s our job to figure out where the money is going while the debate is ongoing. The party will continue for now. Just watch the exits.
For the full breakdown of all five names… including chart levels, valuation math, and where I’d actually be a buyer versus where I’d wait… Watch This week’s full episode of Being exponential. Also check that Subscribe to Being exponential On X (formerly Twitter) for more exclusive content.
