Forget Finding The Next Nvidia -The 3 "Obvious" AI Stocks I’m Buying Hand Over Fist - Act Fast!!

The biggest criticism I receive about my stock picks is this. You are selecting the obvious winners. These stocks are already hot and everyone knows about them. But isn't that criticism almost self-explanatory? If a company is clearly positioned to benefit from one of the biggest infrastructure booms in human history, why should I ignore it and spend the time searching for an obscure business that may produce average returns? I have three logical answers to answer this criticism. First, successful investing is not about finding companies nobody has heard of. It is about recognizing which companies possesses the strongest competitive advantages, the fastest earnings growth, and the clearest long-term demand, and then determining whether the market price properly reflects those fundamentals. A well-known company can still be significantly undervalued. Nvidia, Microsoft, and Micron do not become poor investments merely because investors recognize their name. The real question is whether their future earnings justify prices substantially higher than today's. Second, these stocks did not simply move upward immediately after I discussed them. Micron initially fell approximately 10%, Coherent declined nearly 20%, while Microsoft remained stuck around 400 for months. Holding those positions was not effortless. I had to study their businesses, understand why the prices were falling, and decide whether the original investment thesis remained intact. Now that their prices are significantly higher and our portfolio is beating the benchmark indexes by a wide margin, this selection can appear obvious. But they were not obvious when sentiment was weak, headlines were negative, and the stocks were testing investors' patience. The search, conviction, and discipline came before the returns. Third, above-average performance generally requires concentrated exposure to superior opportunities. Simply owning every company in an index almost guarantees an average result. The greatest investors have often generated a disproportionate share of their returns from only a handful of exceptional businesses. A large portion of Warren Buffett's gains came from Apple, while many other Berkshire Holdings contributed far less. Similarly, Tesla became the defining investment for Ron Baron, dramatically lifting returns while numerous other positions performed only modestly better than the market. The objective is not to discover an unknown stock simply to appear clever. The objective is to identify exceptional companies before their full earnings potential is reflected in their share prices. Popularity does not eliminate opportunity, and obvious winners can remain mispriced for much longer than people realize. In this video, I will discuss three stocks that could make long-term shareholders millionaires within the next two to three years. Yes, that is a bold statement, but the fundamentals point towards extraordinary potential, so I cannot ignore what the numbers are telling us. The first stock is none other than Micron, and its September 30th earnings report could become the next test of the AI memory boom. Micron expects fiscal fourth-quarter revenue of approximately $50 billion alongside an 86% gross margin and adjusted earnings of roughly $31 per share. Micron has beaten revenue estimates for 12 consecutive quarters and earning estimates for 13. I would not be surprised to see EPS and revenue beat estimates. However, the opportunity extends beyond one quarter. AI data centers require enormous quantities of DRAM, NAND, and high-bandwidth memory. Demand continues to exceed supply, allowing Micron to secure multi-year customer agreements with committed volumes, pricing protection, and customer deposits. Analysts expect approximately $157 in fiscal 2027 EPS, while stronger pricing and execution could potentially push earnings closer to $170 per share. Another potential catalyst is a large share buyback program. Micron has only $2.16 billion remaining under its current authorization, while quarterly free cash flow reached a record 18.3 billion. A meaningful new authorization could signal management's confidence that elevated earnings and cash generation will continue and reduce the outstanding share count. New production capacity in Taiwan, Idaho, and Singapore should begin contributing during 2027, when management still expects industry supply to remain constrained. Micron could therefore sell more memory into a market where customers are already competing for limited capacity. During the earnings call, I will watch first quarter guidance, gross margins, capacity timelines, and a possible expansion of Micron's buyback authorization. The risks include memory cyclicality, eventual pricing normalization, and potential labor disruption in Taiwan. But, Micron is not valued like a company generating record margins and cash flow. If management confirms that supply remains tight and earnings can stay elevated, the market may finally be forced to reconsider Micron's single-digit valuation. The second stock on today's list is Coherent, a company supplying the optical technology that allows AI data centers to move information between servers, accelerators, and networks. GPUs may perform the calculations, but without high-speed transceivers, lasers, and photonic components, those systems cannot operate efficiently at scale. Coherent's latest quarter demonstrated how rapidly this opportunity is expanding. Revenue reached a record 2.05 billion, rising 42% year over year. Data center products generated approximately 79% of revenue, making Coherent one of the most direct hardware beneficiaries of hyperscaler spending. Importantly, growth is becoming more profitable. Non-GAAP gross profit increased 41% while adjusted gross margin reached a record 40.2% up 2.1% points from the previous year. Gross profit expanding alongside revenue suggests improving product mix, pricing power, and operating leverage, not growth being purchased at any cost. Yet, Coherent trades at approximately 21 times forward earnings. That valuation does not look excessive for a company delivering record revenue, accelerating demand, and expanding margins. Analysts expect fiscal 2028 earnings of approximately 13.96 per share. The larger opportunity comes from continued AI infrastructure construction. Hyperscalers are spending hundreds of billions of dollars on data centers, and every new cluster requires fast optical optical connections as computing capacity increases. Coherent sells the essential peak and show equipment supporting that expansion. The risks are straightforward. A slowdown in hyperscaler spending, tighter AI regulation, aggressive competition, or gross margins falling below 40% could weaken the thesis. But, Coherent's recent decline was driven more by fears surrounding AI investments than deterioration in its business. Revenue, margins, and data center exposure are moving in the right direction. I believe patient investors are being offered another opportunity to buy infrastructure growth during temporary market anxiety. The third stock on today's list is Applied Optoelectronics, an emerging AI infrastructure company with potentially explosive earnings leverage if management executes. Applied Optoelectronics manufactures high-speed optical transceivers and lasers used to connect servers inside AI data centers. Demand for its 800G and next-generation 1.6 terabyte products is running 20% to 40% above available capacity and management expects this imbalance to continue through mid-2027. The [snorts] acceleration has already started. Second quarter revenue reached $191.9 million rising 86% year-over-year and 27% sequentially. Data center revenue increased 140% while management guided third quarter revenue between $255 million and $290 million and $1.1 billion for 2026. Production capacity is expected to rise from 100,000 high-speed units per month at the end of the first quarter to more than 650 by year-end and approximately 930 units during 2027. Applied Optoelectronics has also secured over $200 million of 1.6T orders from one major hyperscaler. Its competitive advantage is vertical integration. Applied Optoelectronics manufactures lasers internally rather than to depending on outside suppliers. As laser availability becomes a major industry bottleneck, that control could protect supply and improve margins. Management believes some future laser products could achieve gross margins above 50%. Applied Optoelectronics looks expensive on near-term earnings because production is still ramping. However, analysts estimate place it near 21 times second year earnings and only 11 times third year earnings. If capacity utilization and margins expand together, today's valuation could look remarkably inexpensive. However, the risks are substantial. Applied Optoelectronics 10 largest customers generate 99% of revenue, expansion requires heavy capital spending, and additional financing could dilute shareholders. Manufacturing delays or weaker orders could quickly damage the thesis. Demand is no longer the unanswered question. Execution is. If management converts its backlog and capacity expansion into profitable 1.60 shipments, Applied Optoelectronics could become one of the most powerful earnings growth stories in AI connectivity.