3 ways to play AI after sell-off: Strategist explains

The tech sector faced a large sell-off in the past few trading days with many stocks in the chip sector, like Nvidia (NVDA), seeing volatility.

Moor Insights & Strategy Founder, CEO & Chief Analyst Patrick Moorhead joins Morning Brief to give insight into the future of AI plays and what investors need to keep in mind.

Moorhead believes he sees: "Three major buckets for AI plays." "The first one is this infrastructure. Anybody who is related to building out these massive, data centers with GPUs in them... I'm very confident next 12 to 18 months, that's going to be the case. And we saw the capital expenditure commitments by Microsoft (MSFT) and Meta (META) and Amazon (AMZN). It is absolutely pedal to the metal on that."

He continues with: "The enterprise software providers, that there has to be benefit in a large scale for all this to interconnect because there is just factually an over-investment in the capability versus the downstream benefits at this point."

Finally, he says there is an "untapped opportunity" with AI PCs and AI smartphones.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video transcript

Patrick, do you think that the narrative has it all changed surrounding the A I story?

Has some of that shine maybe worn off.

I'm curious how you're looking at the development specifically, even really what we've seen over the last two or three trading days and, and just, I guess, put that in better perspective, maybe for some of our viewers.

Yes.

So uh I really, I really see uh two major, actually 33 major buckets for, for A I plays.

Uh The first one is this infrastructure, anybody uh who is related to building out these massive uh data centers with JP US in them, I think are very, I'm very confident next 12 to 18 months, that's going to be the case.

And when we saw the capital expenditure commitments by Microsoft and Meta and Amazon, it is absolutely pedal to the metal on that.

And then there's the longer term downstream, right?

The enterprise software uh providers uh that, that there has to be benefit uh in a large scale for all this to, to interconnect because there is just factually an overinvestment in the capability versus the downstream benefits uh at this point.

And and if that gear doesn't connect in, let's say 12 months, what's going to happen is the investors uh of these enterprise software companies are going to be asking, you know, where's the benefit and have super pressure on these companies to start scaling back?

And that is when uh all bets are off.

And then the final thing I want to add is I, I still think there's this untapped opportunity, which is the A I PC and A I smartphones, you know, so we saw a little bit on the A I smartphones related to Apple.

We saw a slight bump on that, but when you consider there's only one generation of Apple smartphones that can do all the A I uh tricks out there.

And then uh people are gonna have to buy new smartphones, new tablets and even e even new Macs.

That's really, I think good news for companies like Apple and Qualcomm and, and even a MD and Intel.

All right, Patrick Moorhead, always great to get your insight.

Thanks so much for joining us here this morning, founder and CEO of more insights and strategy.