Jeff Benjamin at Daily Upside wrote about advisers who prefer AI infrastructure over AI applications, the chipmakers, data center builders, power and networking companies rather than the apps built on top of them. Even legacy names like Intel and Dell had big years on the theme. He asked how I think about it.
The infrastructure angle is a more defensible bet than any of its applications right now. The picks-and-shovels story has historical backing; you make money selling to everyone racing for the prize, regardless of which prospector wins. Nobody knows which AI application will dominate in five years. Every one of them needs compute, power and storage today.
The more useful work I have been doing is combing through client portfolios to determine where AI exposure is already present. Most people own far more of the theme than they realize through broad index funds, where the largest technology and semiconductor names now carry a heavy weight. A client I work with recently was shocked to learn how much of his diversified portfolio was already riding on a handful of AI-linked companies. He thought he needed to add exposure. He needed to understand the exposure he had.
That is my caution on the whole theme. Buy the infrastructure if you want a deliberate tilt, size it as a tilt, and check the index funds first. Stacking an AI ETF on top of an S&P 500 fund is not diversification. It is doubling down with extra fees.
Read the full article at Daily Upside →
