Shay Boloor, Chief Market Strategist at Futurum, reveals his top stock picks beyond the Mag 7.
Transcript:
CAROLINE WOODS: So you’re not a buyer of Tesla right now, and it seems like you’re kind of moving away from the mag seven overall. I saw in your notes, you say the next decade of AI disruption will increasingly happen beneath the surface layer. So tell us what stocks are beneath the surface layer that you would want to buy?
SHAY BOLOOR: Yeah so at Futurum Equities we created this feature may 15th list. Not the non mag seven names because history doesn’t repeat itself, but often rhymes. During the.com era all the attention was on the infrastructure the structural arteries of the internet, IBM, Verizon, AT&T. But that wasn’t the hidden gems of that era. The hidden gems were the online marketplaces that are built on top of this foundation the Google’s, the Amazons. We at Futurum believe that that’s going to be a similar lineage for AI, where all the tensions on the hardware is on the compute, But the real winners are going to be the applications built on top of all this hardware. And we’ve seen the first disruptor in that second stage in Palantir. Palantir is building the operating system of AI. Everyone is there’s going to be a multi-trillion of spend in AI for the next couple of years on LLMs foundational models. In order for these LLMs to actually affect the real world, you need Palantir. So Palantir is essentially going to be the winner of all this LLM arms race. And you’re seeing the stock reflect that. . Second name is Cloudflare, for example. A lot of people don’t know about Cloudflare where they treat them as a CDN company. But it’s so much more than that because they’re creating this. Offering and this AI boom, where it’s creating these AI hotspots closer to. Where the real action is a.k.a. the edge. You don’t have to go straight to. The data center or hyperscaler. So that speed is really important. Especially when a gentle guy hasn’t even gotten started and you’re seeing their stock price essentially go up 70% this year. I think that there are another name that’s a premium multiple, but they’re surviving the AI tsunami. So there’s a handful of these kind of names out there where AI tsunami is very real. The market is comfortable paying up 100 times p 200 times p, because the ceiling on AI is still being discovered right now. And the second stage winners are going to be the Amazons, the Googles of this era. And they’re willing to make the bet on a $50 billion, hundreds billion, $150 billion company who doesn’t really have the balance sheet to back up the valuation, but they’re thinking that the market’s going to carry it with a high tide raises all boats.
CAROLINE WOODS: Any other under-the-radar names that haven’t necessarily seen this huge, impressive performance so far this year but that you expect will?
SHAY BOLOOR: I believe Snowflake. I think Snowflake is experiencing a similar narrative change as a Google, for example, as a Tesla where their whole spiel was a data warehouse company and data is going to become a commodity in this AI world. So they thought, Oh, AI is going to disrupt them. They’re one of the priciest IPOs in history, potentially a couple of years ago. So I think that they got a new CEO, Frank slootman, went out. He didn’t really believe in the AI vision. They got an incredible CEO who was on a short list of becoming the OpenAI CEO when Sam Altman was going through that weird PR stint. So I think that they got an AI visionary to run the ship, and 40% of the Fortune 2000 data is stored in their ecosystem. That’s so much leverage that they’re capitalizing on that by becoming this foundation of data liquidity. And data liquidity is essentially moving around data in a clean and responsible way. If you want to make the comparison is like Palantir is essentially the librarian. Snowflake is a library for AI data. You they don’t compete with each other. They kind of need each other in the stack. And I think snowflake is one name that’s been penalized for years because of that narrative change. And they’ve catch a bid this year. And I believe that this is a name that they run a consumption model. So when business spending is booming, which I believe it’s going to pick back up after this tariff debacle is over with, the paralysis is done in business spending. I think they’re going to be a substantial beneficiary on this business that’s going to be picking back up to make sure that they are in, that are race and their competitors aren’t like beating them to it.
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