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Rebel Finance Podcast-Episode 6 is out, we talk to Stefan Rust about inflation, modern monetary policy, and stable coins.

Today we will be talking to former NBA player and entrepreneur Kris Humphries at 11:30AM EST

Market Recap

Market tried to make a near term bottom again yesterday as SPY had an undercut and rally at the March 13th low…..

Under normal circumstances we would want to test this to see whether it is a reliable short term bottom, but with “Liberation Day” tomorrow anything can happen.

Trump Says He Settled on ‘Liberation Day’ Tariff Plan, but Doesn’t Reveal It-WSJ

As I have previously stated, I think there is much more going on in this market than tariffs, though those suck up the news oxygen. I think tariffs are a part of a larger plan (if you haven’t listened to the All In Podcast interviews with Scott Bessent and Howard Lutnick, I would suggest you do so) and I think a reckoning in AI that started with the DeepSeek announcement is a huge factor. This stood out yesterday…..

The Next Phase of AI—and 22 Favorite Stocks—From Our Tech Roundtable Experts-Barron’s

Before I get into a deep dive on this it’s helpful to review how I use AI in analyzing markets. If I was a long term investor (I’m not) I would use AI to analyze themes and invest in the winners. Instead, I use AI to analyze themes and pick the winners, who then go on my watchlist. I then use my knowledge or market and charts to decide what to buy and when. So here’s a deep dive from GPT on this article, the next phases of AI, and the potential winners….

The Next Phases of AI: Investing Beyond the Hype

Artificial Intelligence is entering its next major evolution. Following the initial explosive growth sparked by ChatGPT, the focus of investors is now shifting from enthusiasm to tangible economic outcomes. AI adoption is moving "up the stack"—beyond foundational hardware to practical applications that deliver real-world ROI. This shift signals opportunities to invest selectively as tech valuations become attractive following recent corrections.

Short-Term (2025-2026): Infrastructure and the GPU Arms Race

In the short-term, the AI landscape remains dominated by infrastructure, particularly GPU hardware essential for training and deploying advanced reasoning models. Nvidia, despite recent pullbacks, continues to have a commanding position due to:

• The "prisoner's dilemma" dynamic among major players (Google, Microsoft, Meta, OpenAI) forcing continued heavy spending on GPUs to avoid falling behind competitors.

• Rising GPU rental prices, limited availability, and robust demand signaled by platforms like DeepSeek significantly ramping compute requirements.

Short-Term Winners:

• Nvidia (NVDA): Still best positioned to benefit from near-term AI infrastructure buildout, especially the upcoming Blackwell GPU cycle.

• Astera Labs: Enabling "rack-scale" computing essential for the next generation of AI data centers.

• KLA Corp (KLAC): Semiconductor process control beneficiary of increased compute infrastructure spending.

Potential Losers:

• Companies unable or unwilling to scale GPU infrastructure rapidly risk losing competitive advantages in the near term. Specifically, hardware competitors like AMD that struggle to gain share quickly enough against Nvidia could underperform.

Medium-Term (2026-2028): Agents, Applications, and Productivity Gains

In the medium-term, AI's primary value will shift towards practical deployment—"AI agents" capable of performing complex tasks autonomously and accurately. Investors will seek companies successfully integrating AI into their core operations to enhance profitability and productivity.

Medium-Term Winners:

• Intuit (INTU): Highly accurate AI agents, leveraging AI in financial and tax applications.

• HubSpot (HUBS) & Atlassian (TEAM): Effective deployment of AI tools boosting software productivity.

• MercadoLibre (MELI): AI-driven fintech and logistics improvements fueling e-commerce growth in Latin America.

• Elastic (ESTC) and CyberArk (CYBR): Specialized solutions for AI-enhanced search and cybersecurity.

Potential Disruptors:

• Reddit: Positioned uniquely to capitalize on human-curated content enhancing AI search accuracy.

• Netflix (NFLX): Utilizing AI to significantly lower content production costs, improving profitability.

Medium-Term Losers:

• Traditional software companies failing to integrate effective AI agents, lagging behind more agile competitors and losing market share as productivity becomes paramount.

Long-Term (2028 and Beyond): Robotics, Healthcare, and Broader Economic Transformation

The ultimate transformative impact of AI will be in areas like robotics, healthcare, and other highly specialized industries that are only beginning to integrate AI technology effectively.

Long-Term Winners:

• Intuitive Surgical (ISRG): Leveraging AI data from robotic surgery to improve healthcare outcomes and enhance growth.

• Tesla (TSLA): Potential leader in humanoid robots ("Optimus") and battery storage solutions critical for the clean energy transition.

• Harmonic Drive Systems: Essential robotics components manufacturer for future humanoids.

• Quanta Services (PWR): Infrastructure player positioned to benefit significantly from electricity grid upgrades driven by the AI-powered data center buildout.

Long-Term Disruptors:

• SoftBank (via Arm Holdings and Stargate): Broad exposure to future AI technologies through diverse strategic investments.

• eMemory Technology: Positioned for future quantum computing breakthroughs through encryption advancements.

Long-Term Losers:

• Legacy infrastructure and energy companies unable to pivot rapidly to support AI-driven electricity and infrastructure demand could lose market share significantly.

Regulatory and Competitive Risks

While Nvidia and TSMC currently dominate, antitrust pressures and competitive dynamics suggest:

• Regulatory scrutiny is increasing (U.S. DOJ investigations), potentially impacting market share or margins.

• Competitive threats from hyperscalers (Google, Amazon developing own AI chips) and startups (DeepSeek, Grok) attempting to disrupt Nvidia's market dominance.

Stock Selection Insights from Tech Roundtable

Top AI picks from leading experts offer clear investment ideas:

• Favored among Magnificent Seven: Meta (broad strategic initiatives), Microsoft (balanced growth, free cash flow strength).

• Less Favored: Apple (lagging in innovation), Alphabet (competitive pressures in search).

Strategic Investment Implications

• Investors should transition from broad "AI themes" toward selective stocks with credible near-term ROI (Intuit, Atlassian, Snowflake), established infrastructure beneficiaries (KLA, Astera Labs), and long-term transformative opportunities (Tesla, Intuitive Surgical).

• Regulatory vigilance is needed, given market dominance concerns around Nvidia, TSMC, and ASML, though outright breakups seem unlikely under the current U.S. administration.

Conclusion

AI is shifting from pure hype toward demonstrable economic returns, with clear investment winners emerging at each stage of its evolution. Strategic investors should capitalize on current attractive valuations, selectively targeting infrastructure providers, early adopters of AI-driven productivity gains, and long-term robotics and healthcare innovators.

This disciplined approach—avoiding overly broad bets and carefully analyzing regulatory and competitive risks—should lead to sustainable alpha in a rapidly evolving market environment.

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