ZACKS·2026-02-10 04:51Core Insights - The article emphasizes the importance of investing in AI infrastructure companies, referred to as "pick-and-shovel plays," which are expected to benefit from the rapid growth of artificial intelligence and high-performance computing [1] Group 1: AI Infrastructure Companies - Companies like Nebius Group (NBIS), IREN (IREN), Astera Labs (ALAB), TeraWulf (WULF), and Cipher Mining (CIFR) are positioned to profit regardless of which AI model prevails, offering stable revenues and broad industry exposure [1] - Nebius Group is projected to experience a remarkable revenue growth of 5x by 2026, indicating strong market potential [7] Group 2: AI Capital Expenditure Trends - Hyperscaler capital expenditure (CAPEX) is forecasted to increase from $390 billion in 2025 to $515 billion in 2026, reflecting a significant rise in AI-related spending [2][3] - AI spending now constitutes over 2% of GDP, surpassing historical investments in railroads during the 1850s, highlighting the critical role of AI in the economy [2] Group 3: Productivity and Market Dynamics - The proliferation of AI technology has led to a 30% increase in coding productivity, countering skepticism regarding the return on investment in AI [9][11] - Companies are transitioning from capital-intensive models to high-margin operations, as seen with IREN's shift to a GPU-as-a-Service model, resulting in gross profits rising from under $200 million to $600 million [12] Group 4: Market Sentiment and Technical Analysis - A bullish shakeout pattern has been observed in stocks like NBIS, where prices briefly fell below key support levels before rebounding, indicating potential for future price increases [13] - The current market environment presents a unique opportunity for investors to focus on AI infrastructure providers, minimizing the uncertainty associated with software competition in the AI sector [15]