Vaughan Nelson Investment Management’s Post

Transcript

AI excitement has driven many US listed mega cap tech stocks to very high valuations. Are you seeing AI also benefit mid and small cap companies around the world? Yeah, for sure. And you know, that's kind of the other myth that, you know, you've had to own large cap tech to get that exposure. That's just not the case. We have plenty of companies that either make subcomponents, optical components for that infrastructure or make memories. Or do the testing for all of those chips and those stocks have performed in line with NVIDIA for the last, you know, year or so. There's no question. When you step back and look at AI, I think there's two things that investors need to remember. It's overhyped and it's underappreciated. And what I mean by that is. There it is a gold rush. There's no question there's gonna be money that made made here. Do you wanna own NVIDIA that everybody knows about and its customers are trying to diversify away from? Why not go down cap and own all the infrastructure? And when I say infrastructure, I'm not just talking about memory chips. I'm not talking about semi cap equipment and testing equipment. How about all the HVAC units that have to go into all these data centers that have massive backlogs built up? How about the electrical? Infrastructure that has to go into these. So like I said, look, it's a gold rush. You have a choice. You can buy a property claim and a shovel and you can go out and dig a hole and hope you found gold. Or you can own the general store at the bottom of the hill and sell shovels and mining equipment to every hopeful individual who wants to go out and find gold. We were always in the picks and shovel business and so we can get the same exposure without getting that concentration risk.