Forget LLMs: Buy These 3 AI ‘Pick and Shovel’ Plays Instead

Core Insights - The race for artificial intelligence supremacy among major tech companies has intensified since the launch of ChatGPT by OpenAI and Microsoft, with other companies like Alphabet also investing heavily to catch up [1] - The ultimate leaders in the AI large language model (LLM) space remain unpredictable, similar to the internet boom of the late 1990s [1] AI Investment Strategies - Investors can benefit from the AI revolution by focusing on "pick and shovel" stocks rather than trying to identify the ultimate leader in the LLM race, akin to merchants during the California Gold Rush [2] Company Summaries CoreWeave - CoreWeave specializes in cloud computing, providing high-end GPU computing power specifically for AI applications, distinguishing itself from traditional cloud services [3] - The company has secured a $2.6 billion debt financing facility and has $25 billion in capital commitments, indicating strong demand and financial backing [4] - Recent share price fluctuations were influenced by debt concerns and the expiration of the IPO lock-up period, but insider selling is expected to decrease moving forward [6][7] Nebius Group - Nebius Group is a leader in AI infrastructure, offering a cloud platform designed for intensive AI workloads and vertical integration of proprietary software and hardware [8] - The company has a significant partnership with Nvidia, ensuring priority access to GPUs, and has secured a $17.4 billion multi-year deal with Microsoft, which could grow to $19.4 billion [9][10] - Following the Microsoft deal, Nebius' market cap was surpassed by the contract value, suggesting strong future revenue growth potential [11] Astera Labs - Astera Labs manufactures high-performance semiconductors and software for AI applications, addressing data transmission bottlenecks in AI data centers [13] - The company has established strong partnerships with industry leaders like Nvidia, Intel, and AMD, positioning it well within the AI infrastructure space [14] - Analysts predict double-digit growth for Astera Labs through 2026, with the company consistently exceeding Wall Street expectations since its public debut [15]