In the accelerating race to build-out artificial intelligence (AI) at scale, just a small handful of companies hold the literal "on/off switches" for the infrastructure powering it all. Dubbed "chokepoint kings," these firms control irreplaceable elements amid surging demand. Here are the four AI Chokepoint Kings, including a description of what they do, how they are currently being valued by the market, and my opinion on investing.
The S&P 500 Cloud-AI Bubble: Huge Pain Ahead!
Far more money has been lost waiting for the market to correct than in the actual corrections themselves. That is a paraphrase of Peter Lynch, and it’s likely a wise warning for investors in the current “cloud-AI bubble” led by a small handful of US mega-caps stocks. The warning cuts hard both ways, as many investors will likely face huge financial pain in days ahead. This report reviews the current state of the cloud-AI bubble, considers a secular market paradigm shift, discusses the huge financial pain many investors are about to inevitably face, considers a handful of S&P 500 risk metrics and then concludes with my strong opinion on how to defend yourself against the growing cloud-AI bubble.