The AI Sell-Off Is Creating a MASSIVE Opportunity in These 3 Stocks

What's up, guys? You're listening to Milk Road, and I want to tell you that today's video has actually aired before on our channel, but we thought that this conversation was so good that we should air it twice. So, this is a little excerpt from a past conversation. And just a reminder that if you want to see what our analysts are calling next across AI, stocks, and crypto, all of that is in Milkroad Pro at the link below. Enjoy the video. >> So, what should you do here? What should you buy here? So, yes, you can buy SKI Nix, you can buy Micron, you can buy Samsung. They'll all be fine. They'll all do well. But I think Samsung is a better buy at these moment because I think biggest reason is because of their foundry business. And unlike SKH Highix and um Micron, Samsung isn't just a memory company, right? It also has one of the largest semiconductor foundry business, which essentially means it manufactures like chips designed by other companies similar to what TMC does. And for years, Samsung has struggled to compete with TMCC, particularly when it comes to their manufacturing yields, customer adoption, and profitability. They are still not profitable, by the way, um, their foundry business. But I saw some projections that they're working towards that, and they'll be likely be profitable by 2028. But I think that's where the opportunity lies because if Samsung can turn that business around, investors will start to value that company very differently. We're already seeing some signs of that happening, right? Like if you look at Samsung has been ramping up it second generation 2 nanometer manufacturing process. Um and now they're securing like new foundry like orders like it's in a major deal with to manufacture uh chips with Tesla uh with production expected to begin in 2027. Um so and companies are increasingly looking ways for to alternative to TMC and this is like the similar trade to like why I bought AMD because I think being number one is great but some investors also look at number two as well because you want to hed your bets. So I think Samsung is is that is that is in that moment right now and uh I think they're going to do incredibly well over the next few years. So that's number one. Number two, my favorite stock is uh Nebas. I think you should be buying as much Nebias as possible. I bought a lot. If you wanted to like if you want to check out what I bought, you can always go check it out in Milk Road Pro. Like it's just a dollar um to try us out. I've been average dollar cost averaging this 155 last week. Easily easily could double even by this end of the year. I think they're roughly at around 172 right now. Um, it reached as high as 299 I believe this year, meaning it fell around 40% roughly and over the last month alone, it's like down 25%. Now, let me talk about why the investors have been selling because there's a pretty big disconnect between what's happening with the stock and what's happening with the underlying business. Um, first concern is like dilution and debt, right? And this is something that's been affecting the entire neocloud industry. A lot of this as we know started with core which has been the center of financing concerns around like AI infiltrate right AI infrastructure and coreview has accumulated an enormous debt burden as it continues growing. They're borrowing billions and billions of dollars and uh they're not going to be pro profitable till like probably 20 2029 or 2030 because of all the all the amount of money it takes to build out these data centers because these are not cheap. One gigawatt costs like approximately $60 billion 50 to 60 billion to build out and the prices are going up. When you start looking at memory prices and you know other bottlenecks in the industry it's only going to go higher. Look at this chart that I'm I just put up. So understand, you have to understand why the market's concerned, right? Like just look at Cory's interest expense um in the second quarter of 2026. Corby spend roughly 640 million on net interest in expenses alone. And compare that with um 45 million for Nebius and 68 million for iron. That means quarterly like Nebius's quarterly interest burden was 14 times more than Nebius. And what's more concerning is that core itself has indicated that every 100 basis points increase in interest rate could roughly add 30 million to his quarterly interest expenses. So that's like roughly another $120 million annually from just a 1% increase in borrow borrowing costs. Luckily uh I don't think the rates are going to go up anytime soon. So I think they're fine. Now I'm not saying that Corv is going to bankrupt or business isn't growing. Demand for AI infrastructure is clearly there. But there's but this is exactly why investors are becoming more concerned about how these companies are you know financing their you know expansion. Corv generated roughly 2.6 billion um in revenue during the second quarter but it also has 640 million in net interest expense. As I said that's roughly quarter of their quarterly revenue. And when you're spending that much like just servicing debt, it's becomes much harder to grow or you know become profitable in the long term. And I think Corvy in terms of financing, I think they're doing just fine in my opinion. They actually have $und00 billion worth of backlog that they can convert over the next like several several years. Um and also Corv is the best NeoCloud there is. If you look at like cluster max rating from um semi analysis corv is up there along with nebas the bond market will be more than happy to fund these these number one and number two companies and number three companies but I don't know about like number 10 to like 50 or 10 to 100 10 to 200 like those are when you start to see these additional financing problems that comes into play but Cory was just fine >> we're going to pause for a second the AI trade is changing the bottlenecks Stocks are either running out of steam or getting ready for another leg higher. While the application layer is finally starting to show some real profits. Our analysts were early to the last wave and now they are buying for the next one. Catch your next call inside Milkro Pro for just a dollar at the link below. But if you actually look at the next slide, I just want to compare something real quick. Now, here's why I think like Nebia starts looking a little different because if you compare the balance sheet across the Neocloud industry, Nebius actually appears to be in a much stronger financial position than a lot of its competitors. So, one comparison put Nebius at approximately 11 times net debt to IBIDA compared with around 12 times for Cororee. That means both companies are still carrying considerable leverage relative to their earnings, but Nebius has a slightly lower ratio. And when you look at companies like iron, wolf, cipher, apply digital, hot, you name it, several are still generating like negative IBIDA, which makes traditional leverage comparisons difficult because their earnings haven't reached like positive levels yet. Now I want to be careful with that comparison because 11 times net debt to IBIDA ratio is still very high and negative IBIDA doesn't automatically mean a company has a worse balance sheet because some of these businesses have substantial cash reserves or still are in the early stages of bringing infrastructure online. But what I find interesting is that is the interest burden, right? Nebius is currently paying significantly less interest expenses than Corv as I said uh which gives it more flexibility as it continues expanding. Of course, that gap could narrow as you know Nebius draws additional financing and takes on more debt. But for now, they're doing just fine. And u I think Nebius is just an incredible company and you should be buying as much as possible. I'm adding at these levels. This is a no-brainer. Now the next company that I want to talk about is that I've been actually buying is Credo. Um I think this is where this is another stock where the market is completely overlooking how important the underlying technology is to become the AI infrastructure buildup. Credo closed I believe around 1670 around right now. They actually reached as high as 302 earlier back in June. So we're talking about a stock that's down roughly 45% from its peak. Now I want to explain why investors have been selling because I think some of the concerns are legitimate but at the same time they're not. I think the market is missing like the bigger opportunity here. So the first main concerns that it caused large selloff obviously like the leverage unwind right like that that caused like a massive downfall but but other than that competition is is another factor. Companies like Marll, Max linear, Cisco are all competing in different parts of these networking market and investors are basically worried that competition could put pressure on credo's pricing and market share and the third conversion into optical networking because while the opportunity is still enormous, right, this is actually a developing part of the business and investors want to see whether credo can actually exe execute their strategy. Now, let me double click on the competition part a little bit more because last week a company called Max Linear recently announced that it plans to enter the next generation 1.6T active electric cable market which is what Credo specializes in and their most growth in. Max Linear CEO said the company wants to capture 20 to 30% of that market over the next like couple years and investors heard that and sold off credo completely because the assumption was that another competitor is coming about to take a major part of his business. We how many times have we heard this? We heard this so many times. We heard this with memory. We heard it was this is Neocloud. We we're hearing this again. But what's what I found interesting during that conversation was Max Linear's own CEO acknowledged that Credo currently controls 93 to 95 99% of the active electrical cable market. So they're not even worried. And according to if you look at the next chart, according to Evercore ISI research, um Credo accounted for approximately 86% of the entire install base of active electric cables as of first quarter of 2026. And this chart is like incredible because it shows how quickly the market has been growing because back in 2021 the installed base of you know electric cables have practically non-existent but by 2026 it surpassed 10 million cables and with credto responsible for basically everything and this is only going to continue to grow. I think this is an incredibly ever growing business and u credo will do incredibly well. Maybe I should have mentioned what credo does in the beginning. So, Credto essentially makes like technology that allows data to move between chips like servers and networking equipment at these like high-speed levels. Like their biggest like line is like it's called zero flap active electric cables or AEC's which is what what I was talking to you about earlier. These chips essentially help maintain like signal quality allowing like data to travel at higher speeds over long distance than conventional like passive copper cables. So that's that's what they essentially do. But this is like a huge huge like important piece of the market because data needs to move at incredibly speed incredible speed and Credo helps do that. And they have also tons of other businesses that line that they're expanding as well. So, I'm not I'm not really worried about Credo. I think this is a buying opportunity. Um, you should be buying as much as you can. Um, I think the stock could easily double by sometime next year. So, like this is a no-brainer. So, buy Credo if you can. So, those are basically the three companies that I think you should be buying. If you can buy Samsung, which you can buy in Interactive Brokers, you should buy Nebius because Neocloud, they're the best Neocloud there is. Um, and they have so little debt and you should also be buying Credo here. So, these are three stocks are just a no-brainer and um, if you can buy all these your 2027 2028, you will be very, very happy. >> Thanks for listening to Milk Road. [music] If you enjoyed the show, make sure you like and subscribe. And if you're struggling to find winners in the market, that's exactly what Milkroad Pro is built [music] for. Our analysts have called some of the biggest winners early, and Pro lets you see what they're buying next, every trade they make, and the research [music] behind every position. Check out Milkroad Pro at the link below. Everything you hear on Milkroad is forformational purposes only. These are our personal opinions, not financial advice, and we may own some of the investments we talk about. Always do your own research and make the decisions that are right for you. See you next time.