Perhaps the biggest profits from AI no longer flow to the Fab Seven, but to the companies that supply them.
Listen to the audio version of this article (generated by artificial intelligence).
Hello reader.
There is a common pattern in new technology courses, which is as follows:
Innovation shows itself. Then a bottleneck appears. Then, capital flows in to solve the problem. Finally, the system changes.
We saw this “regime change,” or complete realignment of stock market winners and losers, in the dot-com crash.
Capital has moved from high-profile names into a variety of other sectors, including base metals, precious metals, energy insurance, and utilities. These sectors generated strong double- and triple-digit returns during the first part of the 2000s, even as the world’s Amazon, Intel, and Cisco stocks fell by 80% or more.
There is another regime change happening now.
Since the beginning of the AI revolution, the seven great companies have sat securely on the throne. Set includes Alphabet Company (Google), Amazon.com Inc. (Amzn), Apple Inc. (Apple), Meta Platforms Inc. (dead), Microsoft Corporation (MSFT), Nvidia company (NVDA)and Tesla company (TSLA).
But their seat will soon be usurped. We’re starting to see the rotation outside From some of the highest profiles, high beta Technology stocks and inside More realistic and asset-backed sectors.
per day Smart moneyLet’s look at a unique, yet powerful example.
Next, I’ll share one of my favorite stocks that is significantly outperforming the Mag 7 so far this year.
Supplier over spender
In the past six monthsCorning Company (GLW) – Data center construction resource – by approximately 140%. On the other hand, Nvidia – A client Corning – Up only about 1.4%.
Investors are moving away from AI chips and toward AI tools and shovels. Corning is essentially the “glass backbone” of AI data centers, which is why investors are rediscovering it.
The hard-earned fiber optic company easily outperforms Wall Street’s darling gains. Nvidia will need huge upside surprises to continue rising, while Corning simply needs to show consistent AI-driven growth.
This is the Killer Mag 7.
This dynamic will increase as we move forward.
This means that it is important to own the companies that are delivering or supplying this massive AI build, rather than the companies that are spending the money to build it.
Mag 7 Killer: Prolific energy producer
One of my favorite Mag 7 shooters is one of America’s most prolific power producers, and is in a strong position to fuel America’s AI build. Data center demand for natural gas could become particularly acute in the Delaware Basin, with the potential for a new “data center alley” to boom in the region.
As one of the major producers in the Delaware Basin, Devon Energy Company (DVN) The company is well positioned to benefit from the structural improvement in pricing trends in the region.
Over the past few years, the Delaware Basin has been rapidly boosting its oil and gas production. Unfortunately, gas volumes have exceeded pipeline capacity. As a result, much of the gas extracted from the Delaware Basin has become “stranded” – the oil and gas industry’s polite way of saying: “It’s worthless unless you can move it.”
The producers lit it up. Transported by truck. Discount it into oblivion. As such, for many years the Delaware Basin acted like a brilliant student stuck in prison. She held enormous potential, but had no way to express it.
But the arrest ends. Two major pipeline projects are improving the economics of the Delaware Basin, especially in Devon.
At the beginning of this year, Wall Street Research expected Devon to post adjusted earnings per share (Earnings per share) by about $3.95 in 2026. Today, those same forecasters expect the company to earn $5.63 per share this year — an increase of 35%.
So, even though Devon shares are up 26% this year, the company’s expected earnings have increased even more.
To learn more about all the Mag 7 killer tools I recommend, Join me today at Fry investment report.
It is considered,
Eric Fry
