Invest in AI, Avoid the Bubble - Ep. 3/4
AI Infrastructure
The content of this analysis is for entertainment and informational purposes only and should not be considered financial or investment advice. Please conduct your own thorough research and due diligence before making any investment decisions and consult with a professional if needed.
In this third episode of Invest in AI, Avoid the Bubble, I’m exploring the category that most closely tracks AI Capital Expenditure—and will likely deliver the most satisfaction in the short term: AI Infrastructure.
This category isn’t the safest, which is why it represents less than 15% of my portfolio. If AI Capital Expenditure cools down over the next few months, these stocks—which heavily benefit from such investments—will tank. However, if the AI CapEx supercycle lasts for years (let’s say more than three), we’re in a much better position.
Here’s why: AI infrastructure serves two main use cases. First, training models—Google, xAI, OpenAI, and others still release updated models every few months. Second, inference—the actual usage of models for real-world applications (like when we ask ChatGPT a question). Right now, still a lot of workload is on training. Over time, inference will overwhelmingly dominate in terms of resource share.
As AI becomes the new way of doing everything and penetrates everyone’s life and industries, even when demand for new chips and infrastructure cools down, AI Cloud providers like AWS will keep invoicing customers as before. Meanwhile, their cash flow will spike as CapEx decreases. Sure, revenue growth will take a hit, but higher profitability will partially offset it—and stocks will likely reprice without hard crashes.
This is the revenue trend I expect from this category, alongside the AI Capital Expenditure trend, assuming demand—and therefore CapEx—lasts long enough.
Below is the company I’ve identified, researched deeply, and own for the long term. After owning it for a few months, it’s already a multibagger (2x), but I think much more will come.
My pick in the category
Nebius ($NBIS)
The universal substrate for agentic computation in application software. Nebius belongs to the neocloud category—alongside Iren, CoreWeave, and others. By neocloud, I mean a new kind of cloud provider built from the ground up for AI, where GPU-dense infrastructure, AI-native tools, and model-centric pricing replace the old “generic compute” cloud. What differentiates Nebius from the others are three things: top-level management, availability of capital, and a clear mission (becoming a hyperscaler).
On that last point, unlike most competitors, Nebius is purposely building a software layer on top of datacenter hardware to orchestrate computing—aiming to reach top-level performance and compute efficiency while locking in its customers. Nebius has just launched Token Factory, which lets you build enterprise workflows using different LLMs simultaneously with top-level efficiency. As open-source models reach satisfying intelligence levels, Nebius will become the go-to cloud provider for every enterprise and startup seeking performance, governance, control, and affordable prices.
I expect these characteristics will make Nebius compound for the foreseeable future.
Check https://www.lorenzo2cents.com/p/nebius-articles to know more and subscribe to Lorenzo2cents (L2C) Premium to access the details of the allocation, my strategies, and much more.
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Next Episode
In the next and final episode of the series “Invest in AI, Avoid the Bubble,” I’ll dig into the rest of my indirect plays and explain which categories I’m avoiding entirely—and why. Knowing where not to invest is just as important as knowing where to invest.
Stay Tuned (It will be out in about a week).
Lorenzo2cents Portfolio strategy for 2026
The current L2C Portfolio allocation to this category is about two times what suggested as optimal allocation by the “Allocation_Optimizer” Tool.
