Forget Nvidia. Watch These AI Stocks Instead.

About 95% of analysts on Wall Street still rate NVIDIA a buy or a strong buy, despite losing nearly $1 trillion in market value since the highs on May 14th. I have people telling me, buy this dip. Are you my contrarian on NVIDIA? What are you doing with this stock here? Nobody's telling me that the sell-off is actually a warning signal. Yeah, I'm not the contrarian, but I also am not putting NVIDIA at the top of my buy scorecard right now. To me, Brian, NVIDIA stands as the hub of the AI ecosystem, and there are so many other companies that benefit from NVIDIA's continued success. I'm also encouraged that NVIDIA has actually broadened out their revenue to go beyond just chip sales, whereas in recent quarters, 88% of their revenues came from their data center business. But I still believe there are better opportunities within the AI ecosystem. You mentioned Micron earlier. Yes, to me, the AI revolution comes to a screeching halt without memory and without power. And when I think about memory, I think about Micron, who's still trading at just six times foreign earnings. But guess what? For every time Micron comes out and says that we can't keep up with demand, well, who's gonna benefit from them turning away business? It's gonna be SK Hynix. And now myself as a portfolio manager starting on Friday, will be able to buy shares of SK Hynix through their ADRs that are gonna be listed on NASDAQ, as opposed to encumbering the difficulties of buying on the Korean Stock Exchange. So I see more opportunities in memory, and I think PMs will as well. A couple questions for you there, Ken, what would make you more excited to get in there and buy this pullback on NVIDIA? The stock is trading at the cheapest levels from a PE ratio perspective since 2019. Does it need to pull back to 2017 levels? Yeah, I'm gonna still maintain my core allocation to NVIDIA. If in fact it dips below, let's say 20 times foreign earnings, I think right now, according to Yahoo Finance, it's trading roughly 22 times foreign earnings. If it gets below 20, that becomes a screaming buy to me. But that doesn't mean that I'm staying away from the name. I just think there are other names that you could use to surround NVIDIA that's gonna provide you with even more growth opportunities. And that was the very genesis of my Air 7 stock basket that I came up with. You mentioned SK Hynix. Are you a buyer of SK Hynix at some point on IPO day? Or would you be more inclined to now wade into the other hot IPO of this year in SpaceX with a stock price that is below its IPO price? Yeah, I think I would wait on SK Hynix just as much as I waited on SpaceX. It amazed me, to say the least, that a company that had an operating loss of $4 billion as recently as last year traded at the valuations it did at its IPO. I think you're gonna see that same type of enthusiasm for SK Hynix. And if you wait a few weeks, perhaps a month, you're gonna find some more attractive levels to buy in at that date. And as I'm having flashbacks here to when then Facebook came public, a lot of hype around that. And the stock was really in the trash bin for more, I think almost two years. SK Hynix is the talk of the town now. If you take a look at what some strategists are saying about this company, they are a provider for NVIDIA. They're high bandwidth memory. So there's a lot of enthusiasm around SK Hynix. And the fact that investors now have also, in the US, a choice to be able to invest in this one as well. Now, Micron, today you're seeing that bounce. By the way, they just signed a 10-year deal with Global Wafers. That's the company that supplies silicon wafers, that it's a supplier for Micron. So they are going to be securing supply. So as it was just mentioned, I mean, the fact that SK Hynix is oversubscribed, you are seeing bullishness still in this AI memory trade, even though we have seen a pullback in recent weeks. Kevin, let me get back to you. I just dropped a story on our homepage this morning. Look at the MAG 7 now. A horrible year for these seven stocks by and large, except the Alphabet up double digits. They have outperformed the S&P 500. But the valuation on the MAG 7, is it real? I think I wrote a significant discount relative to the S&P 500, really the most of the biggest discount in more than a decade. Are you a buyer of these names? Yeah, if you look through the first two quarters of this year, Brian, to your point, the MAG 7 was down on an equal weighted basis 1.7%. And I think that should serve as a reminder to all investors, if you want to find growth opportunities in the markets today, as opposed to growth opportunities, potential growth opportunities in years to come, focus not on who's spending, focus more so on who's receiving the spending. And that's where I got into this AIR 7 concept. Yes, I still like NVIDIA, as I discussed, and I like Alphabet for the very reasons that you just cited. But why not include other benefactors within that AI ecosystems, names such as Taiwan Semiconductor, who was the largest dedicated chip foundry in the world, and has onshored the production of their NVIDIA chips to Phoenix, Arizona. Then I think of Micron, who's looking to onshore their domestic capabilities in Syracuse, and they're making announcement later this morning. And then how about the cooling side of this whole scenario with a company such as Vert of Holdings? And let's not forget about power. I mentioned that how important memory is, so is power. And I think about a utility company like American Electric Power, whose stock's up over 20% year to date, and yet they have a dividend yield of over two and a half percent. If you equal weight those AIR 7, the benefactors of a lot of that spending through the first two quarters of this year, those stocks were up over 75% versus the Mag 7 that was down nearly 2%.