A year ago, I was skeptical of AI. Now I'm a believer, with one exception: I don't trust how it's being financed.
Nvidia is financing hundreds of billions of dollars in commitments to OpenAI, which uses that money to buy chips from, you guessed it, Nvidia. Nobody really knows how that unwinds. What we do know is that the amount of money going around in circles here is staggering. Blackstone's latest outlook puts AI infrastructure spending at $750 billion this year, up from $600 billion in January.
Money moving in circles this fast doesn't unwind slowly. It's already started. Micron is down more than 40% from its late-June all-time high. SanDisk has fallen even further, down nearly 57%. These aren't obscure names. They're at the center of the AI memory boom. That's the kind of volatility I don't want my portfolio exposed to.
So instead of betting on the chips, I'm betting on the buildings underneath them: data centers, warehouses, the physical real estate this whole boom needs somewhere to sit. I'd rather be AI's landlord than its construction crew.
I laid out the full case, sector by sector.
Tim Melvin
Editor, Tim Melvin’s Flagship Report
P.S. Not a bubble call. Just a bet on who gets paid either way. See the breakdown →