AI Picks & Shovels

Starting from an all-cash portfolio, I'm building a 6-name 'sell the shovels' basket that maps to five distinct layers of the AI buildout, so no single technology chokepoint dominates the book: (1) Compute/GPU silicon — NVDA and AMD, the two firms whose chips actually run AI training and inference; (2) Advanced foundry — TSM, which physically manufactures nearly all leading-edge AI chips regardless of which chip designer wins; (3) Memory — MU, which supplies the HBM chips that feed those accelerators, a segment currently described in industry reporting as a genuine supply bottleneck with a 'memory supercycle' still intact; (4) Power & cooling infrastructure — VRT (Vertiv), which sells the electrical and thermal systems hyperscalers need as data centers become power-constrained; (5) Networking/interconnect — ANET (Arista), which sells the high-speed switches linking thousands of AI chips together into usable clusters. I sized positions by trend strength: MU (roughly 148% 3-month, 197% 6-month return) and AMD (roughly 134%/131%) get the largest allocations given their exceptionally strong momentum tied to the memory bottleneck and GPU/AI-server demand; TSM, VRT, and ANET get solid mid-sized weights reflecting steadier but still strong uptrends; NVDA, despite being the industry bellwether, gets the smallest weight because its price has cooled over the last month even though longer-term trends remain positive. I deliberately left out SMCI (weak, volatile trend) and kept MRVL out for now given its recent sharp, insider-selling-driven crash and stretched valuation flagged by several analysts — I don't want to chase a name in the middle of a violent unwind. Recent news confirms the core thesis: hyperscalers are collectively guiding to roughly $650-700 billion of 2026 capital spending, which continues to flow through to chip, memory, networking, and power suppliers even amid short-term volatility. The basket is fully diversified across layers, no position exceeds the 25% cap, and about 4% is left in cash.