3 AI Stocks to Buy Regardless of What the Fed Does!

This week is going to be a crazy week for AI stock investors. I mean, first we have the Fed meeting on Wednesday and the probability of a hike increase is extremely extremely high. The second thing, and over the weekend, we've seen a various AI CEOs saying they are going to slow down AI innovation. Regardless of what happens, Neil and I are going to take a closer look at three stocks that we believe can benefit in the long term. So, let's take a closer look in today's episode. So, like we mentioned at the intro, we're going to take a closer look at three stocks that we believe can benefit during this whole AI infrastructure buildout. But before that, we need to understand what's happening in regards to the Fed meeting and also in regards to the CEOs of AI companies kind of saying they need to slow down AI innovation. Uh so to explain a little bit more is Neil. Hey Neil, how's it going? >> It's been going very well. The excitement always starts during the weekend. It seems like throughout the week we don't hear that much. Suddenly the weekend hits and now we have Daario CEO of Antropic coming out with a huge piece and for the first time ever we have Daario, we have Sam Wolman and Elon Musk all agreeing on the exact same thing. Now before we touch more on that one, on Wednesday we have the FOMC meeting. Probabilities now are over 80% that we do get a rate increase. I still believe we can get a surprise and the Fed actually holds, but that's just maybe my uh silly prediction for today's video. Of course, the market right now has been a bit all over the place. inflation came in and CPI came in a little bit hotter than expected PPI as well. So everything indicates that the Fed will increase rates a tiny bit. Unemployment rate is quite low for now. GDP growth is there. So it's it's a weird situation to be in. Now to mix this weird situation even uh further, we have of course the the big piece from Dario Ammoday, CEO of Entropic that came out and said, "Look, we need to maybe slow down the AI frontier models. We need to slow down because some things are are going too too fast, too quickly, might cause more cyber attacks as we've seen over the past couple of weeks and actual months." and he wants to have a bit more oversight on the speed of innovation, speed of release of new models. Now there there are various opinions out there whether or not this makes sense, whether or not this is just a move because Antropic is supposed to go public pretty soon. So people are asking why are they doing this to themselves. Now the funny thing here is is that Sam Alman, very big rival of Entropic from OpenAI, agreed with this move. Even even weirder is is Elon agreeing with this move as well. To me, it's it's a strange it's a strange move right now because we see that Meta comes out with Muse and that's gaining a lot of traction. We've seen open-source model, openweight models all gaining a ton of traction. pricing is coming down. Is this them trying to put pressure on the smaller AI labs while they are the leaders out there? Because you can make the point and say if you are I mean not if you are a leading AI lab when both of you entropic open AI if both of you feel that you're moving too quickly why can't you just call each other and say maybe we should slow down why do you need Congress to come in right why why this this power move to me that's that's my big question that's a bit strange because AI is not slowing down they can decide to slow down. China will not slow down. Open source models are out there. They're they're not slowing down anytime soon. So, this whole thing is just quite strange but maybe it will present an opportunity because we've seen these types of headlines, deepseek type of moments. It's not it's not a real deepseek moment, but the price reaction could resemble what we've seen with a deepseek. And so, Jose, if you want to share your opinion on the matter and then share your pick, go ahead. I mean, Neil, like you mentioned, it's pretty crazy to see all these three top CEO in the AI labs kind of agree with each other. Um, so it it's a lot of questions, right? A lot of questions. Um, and it seems like I was kind of reading the letter maybe the way I read it in certain aspects is more like instead of really slowing down innovation, it's just let's add more time to do more of these guard rails or safety solutions. And then the other thing is like like you mentioned right the if the two leading or three leading players or four leading players all decide why do they need the other people to say yes you need to do this if they believe this is what they need to do why can't they just do it um also I was just reading a report now and it did mention that open source models are about many people only like four or five months behind frontier models so how do you kind of guard that or or restrict that or or kind of about oversight on some of these open- source solutions as well. So, um it's going to be interesting. I I I do believe it's going to add volatility to the market. Again, I don't want to put light to what they're trying to say, but it also opens up the opportunity for bearish commentary to come extremely heavy during this time, right? So, I'm not saying it's completely irrelevant what they're saying, but also understand that there's the opportunist for anybody bearish to really amplify this noise even more. So, just keep that into account. Now, jumping into the first stock, uh, Neil, that I want to jump into is going to be Credo Technology, ticker CRO. Um, this is a semiconductor player. they do really focus on the networking solution of of of AI servers and AI infrastructures. Um, one of the big risk for this company is usually customer concentration. But I'm a firm believer that in this AI story, there's only a selected amount of people that are building AI infrastructures at these types of scales. So no matter who you're working with in the semiconductor space or AI infrastructure space, customer concentration will be part of this business. It's a risk to understand but it's also understand that it is part of the space. Now I was just looking at their forward PE ratio. Uh and this is the next 12 months. Quo right now is trading at a forward PE of roughly 22 for this fiscal year which they just started. They just reported their fiscal their their quarter 4 of fiscal year 2026. So now they're in quarter one of fiscal year 2027. They expect for this year um to be about 85% year-over-year growth. And what gets me more excited about this is many see this as just a company that provides copper cables to help servers communicate with other servers or other solutions. But the big thing is in the upcoming 12 to 24 months, this company is also expanding into various optics solutions. They're also producing certain solutions for the memory space and a lot of that revenue is expected to come out in fiscal year of 2028. So for me, Creole Technologies is one of those that what many people like to say it has many call options. It's sure right now we're focusing on the networking space. We know that the copper cable is still going to be important. We hear it from all the leaders that it's not copper or optics, it's copper and optics. There's going to be an opportunity for both. But yet Credo is one that's focusing on their copper solutions. They're working on optical solutions for both cables for both um scale up scale out solutions and like I mentioned some of these other places. So that gets me pretty excited and I think the market is underestimating especially with that forward PE ratio of 22 uh of 22 the growth opportunity. The final thing before I send it over to you Neo is this is a company that has no debt in its name right now. It's uh it's pretty much a company with 33 billion in $30 billion in market cap. They about have about $700 million in cash, no debt, and various growth opportunities. They're working with, I believe, all at least five of these major hyperscalers, which are probably the top five names. Uh and they do have great partnerships with companies like Amazon. Uh so credo technology my first play just like any other of those semiconductor or AI infrastructure company Neo is if there is a slowdown in AI infrastructure this is one that can definitely take a hit. So that's I would say the biggest risk and that customer concentration that I was mentioning a bit earlier. Yeah. No I mean it's all the buildout is one of the main reasons why we're seeing this name grow at a tremendous pace why we are seeing this company become more and more profitable. So yes, if there is going to be a slowdown in this whole AI space, it's a name that could get hit. Although fundamentally, maybe not by much because the demand right now is so big, right? Building out these data centers, they don't pop up each and every day. So just because a company says that maybe capex is not going to increase as much as before doesn't mean that Credo's business is going down. which moves me into my pick which is actually a stock where if we see the same headline it's going to be the exact same thing and that's a neocloud or AI hyperscaler as some like to call it that's Nebus and it's the same story and I think Nebus with the story of of this weekend could also get hit because Nebus is a big winner when it comes to well open source models open weight models taking more and more market share in this whole AI story. They don't care which model you use. They just want to see usage come in. Now, Nebus is a company of co and by the way, Credo Credo right now is experiencing a draw down of around 40%. So, a dip has definitely happened right now and as you said low 20 times forward earnings is is getting quite attractive at these levels. Now, a Nebuse is a company worth double credo and is way way more expensive right now on paper because it's completely different business at the moment, right? Credo is benefiting from all of the buildouts. Nebus is part of that buildout. So, the more Nebus wants to grow, probably Credo gets some business there as well. But I do feel like if we go back to the deepseek moment, I think Nebulus on one day it was down 38%. Because the market was just seeing, oh, you know, deep sea comes out of China super bearish. Every American model, every American AI company stock was down in one day close to 40% or so. when the markets open over the next couple of days, we might see an overreaction as well because they see Nebus as a Neocloud player and if there is a slowdown in frontier AI models, maybe that could affect Nebus. I've already seen some talk about how that could affect new cloud players again mostly because it might hurt or put some pressure on open-source open way models and if all the power all the concentration goes back into let's say three specific players although we didn't fully mentioned uh Google that working on Gemini 4 Google's core business extremely profitable meta which is coming out with some great models out their core business also extremely profitable and maybe maybe that is putting pressure on these other AI labs which yes are yet to go public are still losing quite a lot of money as of right now and so if we see a shift in let's say concentration or power this whole space from okay everybody can release a model everybody can move as fast as they can to hold on a little bit we believe this is not safe so let us decide what type of guards we are going to put it. Although they did talk about using third party uh how do you call them referees and and analyst and etc etc. It's always when you add extra steps extra hurdles it's usually the bigger companies that benefit more than the smaller ones. But I do think that as I've said before I don't think you can stop AI right now. I don't think we can stop the development especially not in open source and so whatever overreaction we're seeing from Nebus and in the short run especially over the next two years I don't see anything stopping the build out for Nebus or even uh a core reef for example the demand is there it's not going to disappear because some want to slow down uh AI plus this whole slowouting is part of the training part of of this whole AI story when you look at inference you cannot slow that down as well. So, it's going to be a period where we're going to see a lot of headlines. It could affect some of these names, but I do think that this will be a good buy the deep opportunity. Of course, expect a lot of volatility over the next couple of days. But these are businesses that see a huge amount of growth in their pipeline and that's not changing anytime soon. and and and Neil, one thing I really enjoyed about what you mentioned is this is mainly on the training of new models, but there's so many software companies that have yet to implemented AI in their solution. And what I mean by that is there's certain apps that you might go to already, you can either do talk to a chatbot or some form of AI solution that's being implemented, but there's so many places that can still add it. So even if you slow down even if you slow down uh any waveform at the moment the model training I feel like there's such an much opportunity of so many different applications so many different solutions coming out with the type of AI that we have now and that alone would increase the demand for inference and then you have companies like Nebas or other or or other um Neocloud players that can benefit. Uh, one final thing I want to mention is just some recent news that I saw from from from Nebius um that I I know investors would love to hear about, right? That partnership with Palunteer, great news of kind of sovereign AI and this is one of the big things that we're hearing a lot from other players. And then we saw kind of Nvidia partner up with Palanteer on sovereign AI. So in an indirect way, you can kind of see how this whole uh chain works really well um and some of the market demands that are pushing right now. So pretty cool. I think that was a pretty cool partnership with them and some really big players to kind of work with in that space. Um, now I want to jump into stock number three. Stock number three is one that uh also has seen quite of a a drop uh from year to date. The stock is down roughly 17% from its overall 52- week peak. The stock is down nearly 25% and that is Synopsis ticker SNPS. Now, Synopsis is a company that helps it's a software player that helps with the signing of chips. Now, to me, there's two reasons why I like Synopsis right now. Well, three reasons. First, let's talk about valuation. I was looking at forward PE valuation. This is a software company trading in my opinion at hardware levels. Neil forward PE of 23.56. That's around 23, right? you again this is typically typically these software EDAs trade at north of 30 sometimes even north of 40 um the fear here and the risk is because of AI maybe there's going to be some open- source solutions that's going to help you design chips and you're going to be using Synopsis a lot less kind of just like that horror story that you're seeing with all the other software players now to me I think it's the opposite I think Synopsis has a lot of data and when you have a lot data, you will be able to implement strong AI solutions into your platform. More importantly, now with AI tooling, if if anybody is using AI, AI is getting very good at using your solution, using a software tool. And if I as an engineer, maybe I only needed one subscription before, but maybe designing a chip, I can say I want to use it, but I also want some form of subscription or consumption base for the AI agents that I have that are going to be helping me build some form of chip. There's an additive solution there, right? where not I I I I don't think the amount of engineers growing on a year-over-year basis is massive. But now if every year if if every engineer gets a nice amount of agents to help build their AI chips, that's a huge opportunity there for synopsis. The other thing is AI is transforming the way technology is being built. First you have all these hyperscalers, all these other kind of big companies trying to develop some form of AI inference chips, AI training chips, and Synopsis is entering more into the IP business. So, it's trying to help those players. Hey, if you need to help build this AI chip, we kind of have these pre-lego selections already. The great thing with that is they get a mixture of licensing fees and royalty fees the more they kind of go into this business, which is really great. Um the other thing that if there was one more point I would love to bring up is they recently made an acquisition of a company called Ancis and this is a kind of a simulation company again another engineering data company they have a lot of data and with AI I'm truly a firm believer that with more data you will be able to have better AI tools and all these solutions are ones that can benefit with agentic tool calling. Um, so as long as Synopsis really does great at being able to market and and price and create a a value for Agentic Tools, I think it's one that can benefit no matter where we're at in this AI ecosystem. >> Yeah, I think that's a great great way to end uh this short episode. It's going to be it's going to be an interesting week. It's going to be a very interesting week. Every time we get some some big news during the weekend, Mondays, Tuesday, and especially this week with the FOMC meeting on Wednesday, expect I mean last week was a short trading week. Uh I think this week we deserve the extra the the extra excitement. So appreciate all of you joining uh and watching the video. Don't forget to like, comment, subscribe. Let us know which stocks you think you'll be interested in getting if we do get a bigger dip. Thank you all for watching. See you in the next one. Bye-bye.