AI Isn’t Just Hype, The Real Money Is in the Infrastructure🏗️

Everyone’s talking about AI stocks, Nvidia, Meta, you name it. But here’s the thing: most of these names are already trading at nosebleed valuations.

The smarter play? Look at the companies building the picks and shovels of the AI gold rush.

Here’s what’s moving this week

Oracle ($ORCL) is quietly marching toward a $1T valuation. Its AI cloud business is signing massive deals, the kind that keep recurring revenue growing for years.

• Data center demand is exploding, and that means companies like Eaton, Schneider Electric, and Bloom Energy (fuel cells) are getting more attention.
  

• Chip makers beyond Nvidia names like AMD, Intel, and even ASML are critical to AI’s future, and some are still trading near book value (Intel’s P/B ~1.1 vs Nvidia’s ~40).

My Watchlist Move:

I’m running a screen for companies with:

• Strong ROE (>15%) - Company earns >$0.15 for every $1 of owner capital — efficient at turning equity into profit.
  

• Trading below book - Trading below book (P/B < 1): Stock price is less than the company’s recorded net asset value. This could be a bargain or a warning sign.
  

• Low debt-to-equity - Company uses little borrowed money relative to owner capital. This is safer and less risky in downturns.

Translation: I’m looking for high quality businesses (on sale) that can grow and multiply returns over time.

Why this matters:

AI isn’t going away, but this isn’t 2023 anymore, buying Nvidia at 50x earnings is asking to get burned. Be careful if you follow the crowd.

Infrastructure players often have:

• More predictable demand (AI workloads keep growing)

• Stickier revenue (cloud contracts, power systems)

• Lower valuations (less hype premium baked in)

Bread Bin Take:
Buying into AI doesn’t have to mean chasing whatever CNBC is hyping today. Look for companies with solid cash flow, reasonable valuations, and a moat, you know the ones that get paid whether AI wins or loses.

Key
 
Moat Company = is a company with a strong, durable competitive advantage something that protects its profits from competitors over the long term. The term comes from Warren Buffett’s idea of a “moat” around a castle:

• The castle = the business

• The moat = whatever keeps competitors from invading (stealing market share)

ROE (Return on Equity) = Net income ÷ Shareholders’ equity.
It shows how well a company turns owners’ money into profit.

Quick points:

• 15% ROE = company made $0.15 for every $1 of owner capital.

• Higher is generally better, but watch for high debt or low equity inflating ROE.

• Best used vs peers and as a multi-year trend—not alone.

P/B < 1 = means a company's stock price is less than its book value (what its assets are worth on the books).

Quick points:

• Simple meaning: You're paying less than the company’s recorded net asset value.

• Why it matters: Can signal a bargain, the market may be undervaluing the company.

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⚠️ Disclaimer:
This is for educational purposes only, and is not financial advice. Always do your own research before making investment decisions.