Chamath Palihapitiya: "The Great AI Rotation Has Begun" - 4 Stocks To Buy NOW - I'm Going All-In

Chimath Palahapatia just made a bold prediction on the All-In podcast that the second phase of the AI revolution is officially coming to an end, paving the way for the next trillion dollar market opportunity. >> We're getting to the end of this second phase of AI. So if the first phase of AI were models and think of like a model as a brain, the second phase of AI is harnesses, right, and agents, which is the analogous equivalent of giving a brain a pair of eyes and hands and a notebook for memory and a keyboard to type things on. So you're sort of taking this primordial object that was really good at Q&A and you're making it more useful almost like an autonomous being. But we're starting this next phase soon. At least I see it in the enterprises that I work with, which is that that's still insufficient. And what you now need to do is make that autonomous agent much more informed and give it context and allow it to do a job much more intelligently. So meaning you take a brain, you give it arms and legs and limbs and eyes and etc. But then you have to train it to be a lawyer or be a customer service rep or be a sales agent or what have you. And to do that next step, you need a ton of contextual information. And so the people that control that today, the large systems of record, what I said before and what I'll double down on now is that those guys hold an incredibly special place in the ecosystem. While phase 1 was strictly about physical silicon and infrastructure, propelling Nvidia over 800% higher alongside massive rallies in TSMC, Broadcom, Super Micromputer, and Micron's explosive 1,200% surge. Phase 2 shifted capital into software harnesses, agent frameworks, and developer platforms. That second wave sparked massive runs across the software landscape, powering Palunteer up over 500% in 2 years. However, as Chimath points out, standalone AI models and light wrapper applications are hitting an operational wall because they lack the deep proprietary context required to execute complex real world workflows. This brings us directly to the third phase of the AI expansion, enterprise context. The next wave of immense market wealth will not be captured by raw model builders, but by the entrenched canonical systems of record that hold non-negotiable enterprise data, compliance frameworks, and operational ledgers. We are currently tracking four dominant market leaders perfectly positioned to capture this shift before the broader crowd catches on. Let's begin with the first stock sitting directly at the heart of this third phase shift. Salesforce Inc. trading under ticker CRM. For the last two years, Wall Street hammered software giants under a false SAS apocalypse narrative, fearing autonomous AI agents would kill traditional SAS models. That existential discount drove Salesforce shares down from $360 to $160, valuing this high margin Titan like a cyclical manufacturer despite generating nearly $34 billion in gross profit over the last 12 months with margins exceeding 77%. But CEO Mark Beni off executed a brilliant strategic U-turn. Instead of burning tens of billions building raw models from scratch, Salesforce deepened its strategic alliance with Anthropic, launching Claude Force. This pairs Claude's worldclass reasoning engine with Salesforce's massive distribution network of over 150,000 global corporations, giving anthropic instant enterprise scale while providing Salesforce the ultimate AI weapon. The financial payoff was immediate and dramatic. In its latest fiscal Q2 2027 results, Salesforce posted blowout revenue of 11.35 billion, up 11% year-over-year, while free cash flow exploded 82% to $1.1 billion. The real standout is its Agentic AI platform, Agent Force, which reached $ 1.5 billion in annual recurring revenue with a staggering 240% year-over-year growth rate. AI consumption metric AENTIC work units surged 97% sequentially to 3.2 billion proving that enterprise adoption is rapidly accelerating despite a massive single-day stock surge of over 22% that sent shares to $252. The stock trades at an attractive forward price to earnings ratio of nearly 15.9 times. Management raised fullear guidance as contracted revenue backlog hit a record 66.3 billion by converting existential AI threats into its biggest growth driver. Salesforce has firmly established itself as a foundational winner in the enterprise context wave. Sailing directly into our second major phase 3 beneficiary, we look at global enterprise database titan Oracle Corporation trading under ticker OCL. For months, Wall Street bears pushed a cautious narrative around Oracle's massive $638 billion remaining performance obligation backlog, dismissing it as a risky, unproven figure while penalizing the stock for heavy capital expenditure. That sentiment caused Oracle shares to pull back significantly from their high of $345 down toward $140, creating a distinct valuation disconnect. However, [music] Nvidia's unprecedented long-term AI demand guidance fundamentally changed the narrative. By confirming that the entire tech ecosystem is supply constrained well past fiscal 2028, Nvidia effectively derisked Oracle's $638 billion backlog, proving that contracted data center capacity is now the single most valuable asset in tech. Unlike pure hardware rental providers, Oracle's ultimate moat is not raw compute capacity. It is its unassalable enterprise data estate. With its latest AI database 26 AI platform, Oracle is embedding vector search retrieval and agentic reasoning directly into the database engine, allowing global corporations to monetize decades of private data. As AI demand expands rapidly beyond a single research lab into broader industrial and enterprise markets, Oracle Cloud Infrastructure is emerging as a premier choice. Operating alongside major cloud providers as a core environment running production AI workloads, trading around 18.5 times forward earnings, Oracle offers an asymmetric riskreward profile for long-term investors. As sentiment turns and fundamental catalysts play out, Oracle stands out as an enterprise context beneficiary ready to capture the next wave of corporate AI growth. Transitioning smoothly to our third selection, we focus on the undisputed leader in human capital and workforce management, Workday, Inc., trading under ticker WDAY. While skepticism lingering from earlier software sector sell-offs saw Workday pull back from its 52- week highs near $250 toward $110 earlier this year. Its operational performance reveals a business rapidly scaling through the phase 3 shift. In its latest Q2 fiscal 2027 earnings report, Workday delivered a decisive double beat, generating $2.65 $65 billion in total revenue, up 13% year-over-year and posting non-GAAP EPS of $2.75, beating consensus estimates by 14. Subscription revenue rose 14% to $2.47 billion, while 12-month subscription backlog expanded 14.2% to $9.03 billion, supported by a strong 27.4 4 billion total backlog and 97% gross revenue retention. The key to Workday's acceleration lies in its monetization of enterprise workforce context. AI products alone drove over $100 million of new ACV in Q2, accounting for over 25% of all new ACV closed, while total annual recurring revenue from AISKUs approached $600 million, up more than 200% year-over-year. Over 5,500 enterprise customers are actively deploying organic workday agents, up 35% quarter-over-arter, with flagship solutions like talent acquisition agent automating over 8 million interview schedules in a single quarter. Management raised fullear fiscal 2027 subscription revenue guidance to nearly 9.95 billion and bumped non-GAAP operating margin targets to 31%. Looking ahead to fiscal 2028, Workday targets steady 11% subscription revenue growth with at least two percentage points of additional margin expansion, backed by a newly authorized $4 billion share buyback program that highlights management's confidence in its valuation. Rounding out our list with our fourth dominant market leader, we look at the global backbone of enterprise resource planning and supply chain infrastructure, SAPS, trading under ticker SAP. While near-term concerns over AI deployment pacing and minor margin friction from cloud transitions sparked temporary cautiousness across the market, pulling the stock back from its 52- week highs near $281. SAP's core operational engine continues to demonstrate high durability growth. In its latest Q2 2026 earnings report, SAP posted total revenue of 9.88 88 billion, up 11% year-over-year in constant currency, propelled by a 24% surge in cloud revenue to 6.28 billion and a 27% jump in its flagship cloud ERP suite. Crucially, current cloud backlog accelerated to 26% growth, reaching nearly 23 billion euros, proving that enterprise customers are actively migrating legacy on premise systems into SAP's cloud architecture to access new AI capabilities. The fundamental key to SAP's phase 3 opportunity is its unmatched monopoly over operational business context. SAP is not attempting to compete in raw foundation model training. Instead, it is embedding its dual AI assistant and deploying over 400 autonomous agents directly into core manufacturing procurement and financial workflows. By acquiring data platforms like Dreo, Reelto, and Prior Labs, SAP is creating a unified data to AI stack that allows enterprises to clean, analyze, and query nonsap and SAP data seamlessly. Trading at a reasonable forward PE around 26.5 times, which sits below its 5-year historical average, SAP offers investors a durable riskreward balance. Supported by a massive 10 billion euro share buyback program running through 2027 and expanding operating margins targeted at 31.2% by fiscal 2028, SAP represents a foundational enterprise gatekeeper set to capture the next wave of corporate AI monetization. The market rotation into enterprise context is happening right now and the capital flows are shifting fast. Position your portfolio in these four market leaders before Wall Street fully prices in this third phase. 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