Infrastructure Leads the AI Charge

The assessment of the AI sector revolves around four distinct phases: Phase one showcases immediate winners like NVIDIA, while phase two includes infrastructure stocks vital for building the technology, which currently enjoys strong investor confidence and significant capital influx from major tech companies. Phase three features companies generating AI-enabled revenues, although skepticism has emerged regarding the returns in this category, resulting in muted performance recently. Phase four focuses on broader productivity gains from AI adoption across various companies, anticipated to take longer to materialize. Investors are primarily concentrated on phase two infrastructure opportunities, yet as the trade matures, there is a shift towards earnings becoming the key driver over mere valuation and investor excitement.