Four stocks are thriving from the $700 billion AI spending boom

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Editor’s note: Most people who lived through the dot-com boom remember what happened when it ended. Louis Navellier He remembers what happened while he was running it — and he’s seeing the same patterns emerging in the AI ​​now.

He has been improving his stock picking system for decades. And what was built with it Want Smith The upgrade over the past year may be the most significant upgrade to its system in nearly 50 years. He explained exactly how it works — and what to do with it — at a free event last week. You can catch the replay here Before midnight tonight.

Read on to find out why he believes most investors are already headed in the right direction — and are still at risk of walking away with the wrong result…

“How much will it cost me to buy you?”

This is the way Cisco Systems Inc (cisco) CEO John Chambers received the founder of communications startup Cerent Corp. In 1999.

Not his company. You.

Cerent only had about $10 million in annual sales, but Cisco paid nearly $6.9 billion in stock because Chambers believed the technology and this founder were crucial to building the Internet.

At the time, Chambers had a simple solution whenever he found a bottleneck:

Buy it.

By the late 1990s, the Internet was growing so rapidly that Cisco couldn’t create products fast enough to keep up. So I started buying up competitors, technologies, and choke points all over Silicon Valley.

This strategy helped make Cisco the most valuable company in the world for a brief period in March 2000.

Most people remember what happened next. I remember what happened before.

Last time capital moved so quickly

The construction of the Internet was real. Networks were built, servers were installed, and infrastructure spending doubled. Investors who understood this trend made fortunes.

I’ve been thinking about Cisco lately because we’re watching the same movie again.

Building real AI. The S&P 500’s first-quarter earnings were up nearly 29% from a year ago — more than double what analysts expected. Analysts continue to revise estimates higher. The spending behind this is staggering and accelerating.

This is what I want to talk about today.

In this article, I’ll show you four thriving AI building stocks outside of Nvidia and Micron…

Why do I think this infrastructure boom is still early?

And why the hardest part of AI trading is not finding the right companies. It’s staying with them.

Everyone wants the next Nvidia. This is absolutely the wrong way to think about this.

I have been investing through major technological transitions for nearly five decades. I was using computers to analyze stocks in the 1970s, long before they became popular on Wall Street. Over the years, my quantitative systems have helped identify winning stocks such as… Apple Inc (Apple) and Nike company (to) – and Nvidia company (NVDA) and Microsoft Corporation (MSFT) – long before they became household names.

In the late 1990s, everyone wanted the next internet stock. Today, everyone wants the next AI stock.

This is understandable. Nvidia has become one of the most successful investments in modern market history.

But investors often focus so much on one company that they miss the broader trend unfolding around it.

AI is no longer just a story for Nvidia. There are a lot of AI-related stocks that are booming right now. Memory companies, networking companies, power generation companies (we used to call them “utilities”)… they all benefit.

Why? Because AI requires a huge amount of infrastructure.

The average investor sees ChatGPT or Claude on their browser and thinks about the software. I see hundreds of billions of dollars flowing into a completely new computing architecture.

What the earnings numbers actually say about AI Buildout

To estimate the size, one proposed AI data center project in Utah would cover nearly three times the area of ​​Manhattan. Similar projects are being planned across the country. These facilities will require thousands and thousands of chips, servers and networking systems.

That’s why you love companies Micron Technology Corporation (in) has become extremely important.

Most investors still consider it a cyclical memory chip company from the middle of the country. But on May 26, Micron, a Boise company, became Idaho’s first trillion-dollar company.

Wall Street sees something different. Sales are expected to grow by more than 250%. Profits are expected to rise more than 900%.

Those are not normal numbers. It’s what happens when a major technological shift occurs and demand outstrips supply. Micron has reportedly sold much of its high-bandwidth memory production under long-term contracts, and analysts expect supply shortages to persist for years.

This is also why I want you to care about companies like Dell Technologies (Dale), Hewlett Packard Enterprise (HPE), Sina Company (hundred)…and yes, Cisco. These aren’t the first names investors think of when they hear “artificial intelligence,” but they’re increasingly booming from the creation.

The opportunity has become greater. Not smaller. When a major investing theme spreads beyond a handful of stocks and starts lifting entire industries, it usually means the trend is becoming more sustainable and more profitable — not less.

This is what we see now.