Cashing In on the Infrastructure Behind AI’s Growth

The Overlooked Play in AI’s Cooling Arms Race

AI is About to Change the World

AI is going to change the world. We all know it. Even if we don’t know exactly how. We know that AI is going to help make our world more efficient and more productive and the world is rushing as fast as it can to find out how to do that. People are so certain that AI is going to change how we work that we’ve become anxiety ridden as we also ponder what the work force will look like as these changes inevitably creep into every corner of our society. I ask myself these same questions too.

The market knows that semiconductors and microchip technology is going to be absolutely vital as is evident from events like NVDIA’s share price shooting through the roof over the past couple of years. Intel’s share price just recently had an impressive spike after stories dropped that the government might buy a stake in the chip maker as the U.S. looks to manufacturer these products domestically. The manufacturing of semiconductors and computer chips is vital to our national security but it is also of paramount importance that the U.S. be a player in this new phase of the 21st century global economy.

Deciding Where to Put Your Money

It seems pretty obvious we should all be dumping our money into the companies that will be making all of these semiconductors and computer chips right? Well, maybe but maybe not. Due to the fact that it is so obvious that semiconductor and computer chip manufactures are going to have to play an outsized role in the growth of the global economy, too many investor have these companies on their radar waiting for clues to tell them when to buy.

There are skyscrapers in New York City that have entire floors of analysts staring at INTC, NVDA, AMD, TSMC, MU, and all of the other companies that will likely prove to be major players in this AI revolution in one way or another. Finding an edge against all of those resources is going to be hard. It will be especially hard if you’re looking at the exact same companies as these analysts and expecting to find something new in the same information pile that a million other people have already rummaged through.

The AMREP Corporation

I’ve already talked in the past about how to profit indirectly from this rush for the U.S. government to play catch up in the semiconductor and microchip sectors of the economy. I have written an article on the AMREP Corporation ($AXR). This company owns 17k acres in New Mexico right outside of Albuquerque. The city of Albuquerque can’t expand for reasons I have explained in my write up. When additional housing needs to get built to support a rapidly growing tech industry in Albuquerque, that housing is going to have to be built just outside of the city. AXR owns and develops that land.

The ECC Capital Corporation

I’ve also written about various coal companies on my Substack including ECC Capital Corporation ($ECRO) and on my X account including Peabody Energy Corporation ($BTU). There’s very few things that are certain. I have no idea how AI and all of this processing will change the world. I don’t know who it will benefit and who will suffer from it. I do know one thing for certain though. If we really are going to build all of these data centers and semiconductor and microchip factories, we’re going to need a lot of energy to do so.

Even if the Trump administration was more supportive of the green energy industry we would still need more energy to fire up all of these data centers and factories. That energy will in part come from coal. This will push demand for coal back up, especially since the European Union just agreed to a huge increase in liquified natural gas imports from the United States. This will push up the price of natural gas and make coal an even more competitive energy option.

Today’s Topic of Discussion

This time around I’m going to be talking about a company tied much more directly with the AI and quantum computing industry yet they aren’t making state of the art never been seen products. Instead this company is making components that we should all be quite familiar with, especially for anyone who’s worked around computers or servers before. We’ve always needed these products to run the information systems that run our modern world but with the introduction of AI we’re about to need a whole lot more of what this company is producing.

This company is as tiny as it is cheap with just an $872k market cap, a negative enterprise value of -$1.05 million, and a NAV that’s 8.0% higher than the current stock price. This company also has some signs of revenue increases on the horizon. There’s a huge surge in customer deposits showing up on the company’s balance sheet and this company is seeing large rises in expenses like commissions and travel and meal expenses. It looks like this business may be getting ready for a large ramp up in production.