2 AI Infrastructure Stocks To Buy Before 2027!!

Welcome back to the channel everyone. So, combined the four biggest tech companies in America are about to spend nearly three4ers [music] of a trillion dollars this year just on AI infrastructure. And [music] there's analysts that think that number could easily top a trillion dollars or more in 2027. [music] And I think that begs the real question for investors. It's not where the spending is happening. It's where all that money goes [music] and which stocks are positioned to benefit no matter who ends up winning the AI race. And that's what Jose and I are going to be talking about today. We're going to [music] be chatting about two AI stocks that we think you should seriously consider buying before 2027. So, want to talk a little bit about the capex guidance from the four largest hyperscalers. You know, Amazon's guided for about $200 billion. Alphabet upwards of $200 billion depending on the quarter. Microsoft originally guided for about $190 billion. They revised that down slightly. Not much though to 175 billion. Meta is looking to spend up to $145 billion a on AI capex this year. So we're seeing that all of that capital it has to land somewhere physical, right? GPUs, custom chips, data centers, power, cooling, networking, the list goes on. And every dollar of that spending, it turns into real estate. It turns into infrastructure demand. And that brings us to the companies we're gonna chat about today. Jose, what's uh your stock pick? >> Yeah. Hey, hey, Rachel. For uh stock number one, I want to jump into Meta Platforms. I think this is one of my favorite stocks for the year. Um it's been punished and rightfully so. I think um the market always gives it reasons to it and there's many I mean many people can argue this company increasing its capex um is is one of the reasons to punish it, right? we saw uh capex go to about$1 130 to $145 billion for the year. Uh the second thing is unfortunately you have a lot of those legal issues that are are happening with meta. We got a few updates um in the past few weeks of maybe it's not as bad as the market thinks. Uh but the market is still a little bit fearful here and there. Um and and just I mean in in their most recent earnings in quarter 2, legal charges made the company lose um or or miss on earnings per share. And is this some a story that's going to keep playing out over and over again? So there is that risk with the the legal actions and the capex. Um now I want to explain why I'm actually very excited about Meta. And Meta is one of those companies that with this AI story, you are truly seeing an ROI. Uh I think uh during the call Mark Zuckerberg mentioned that he expects Meta to be the fastest growing advertisement segment um in all the companies out there growing faster than than some of the other giants which is extremely exciting. Uh the other thing is uh Marquez mentioned that uh the AI compute that they are investing is dramatically helping their core business right if you have a better recommener system that system is going to make sure you stay in the app a lot longer. It's going to show you what you like and then it's going to hit you with an ad and it's going to hit you with an ad that it knows you're going to take some action on. So, it's going to increase the efficiency of the ad. It's going to increase the time that you're on the platform, which is increases the chances that you get hit with more ads and so on and so forth. And that just creates this ultimate flywheel of more data. Oh, this person watches this to stay here much longer. Maybe if I do this, they're going to stay here much longer. or for the next person that has a very similar type of viewing, I can recommend this one because I know they like similar things. So, it overall helps that core business. The second thing is with all this AI revenue, Mark really wants to sell super intelligence. He says, "I could sell my compute. I'm investing on all these data centers and I built up all this compute and I can sell it at a premium just how like SpaceX is doing. But I don't want to sell just the compute. I want to sell the intelligence. And with the intelligence, I sell the compute, I sell the tokens. And recently, what we have been seeing from the meta team, they continue to release new meta muse models. Uh just yesterday, they released a new or earlier this week, they just released a new coding solution and based on just the quick benchmarks. They're actually leading a lot of the frontier models. So this is showing that the idea or the vision Mark go has, it's not perfect, but there is some truth to it. if they can get these models at some form of frontier level, the demand for that compute and that token is going to be there. And I don't think the market has priced that in just yet. Uh so, so Rachel, I didn't want to go too much into like the numbers of revenue growth because I think there's plenty of places we can see that. I really just wanted to explain kind of this highle thesis of where the data center market and why that compute can be dramatically strong for Meta and shareholders. >> Yeah. Well, and a few other things uh that I'm watching with Meta right now, you know, their own custom chip, MTIAA, already powers recommendation engine serving billions of users daily. Um, and that's something that maybe a lot of investors, you know, maybe don't know. But the other thing that just happened is, uh, you know, Meta launched their new model, Muse Spark 1.3, yesterday for complex coding, multi-step agent tasks. um and they're essentially targeting developers who build you know autonomous tools and automated workflows. So this model handles multifile projects um software engineering a lot of visual front-end generation as well as just general AI agent workflows and Meta is going to be offering two primary access tiers uh through the meta model API as well as thirdparty aggregators. But what's interesting about this is again tying it back to the ad business, right? Because so much of what Meta is doing goes back to fueling where it makes 95% of its revenue, which is the advertising business. And you spark I think is going to be a key part of that. You know, Meta is planning to really utilize the model's uh agentic capabilities um to improve ad targeting, you know, automated creative production and conversion rates. And Muse Spark operates without getting too technical, it operates beneath the ad auction layer. So, it analyzes user interactions, text, images, and videos. Well, what does that mean for advertising? Essentially, the company can predict user intent with higher accuracy. What does that do? That improves ad relevance. that improves engagement metrics for advertisers. And you know, this is just a very high level overview. I'm sure we'll talk more about this uh update in in a future video, but I think that this is a really important one to watch if you are a Meta shareholder or if you have Meta on your watch list. Um, and another thing I'll note, you know, they've revised their capex guidance upward three separate times. Uh, you know, they had their original range, they upgraded again in April, then again in July. That's where we got the the $145 billion figure. So essentially, Meta keeps underestimating how much the buildout requires. So that means that if they're revising their own infrastructure spending upward three times in a single year, that's a very strong argument that the physical infrastructure side of the AI trade, power, land, cooling, that can stay a bottleneck for much longer than maybe many investors currently expect. And I think that creates a real buying proposition not just for Meta, of course, Meta in in this instance that we're talking about, but for many other companies as well. >> And and Rachel, before we jump into stock number two, I just want to say you talked about the capex, right? Capex increasing three uh a few times just this year alone. We just did a video uh talking about certain semiconductor companies that are benefiting from this AI boom. Fools, after you're done with this one, make sure to check that video out as well. We have three amazing stock picks that we believe can benefit from that capex growth. Uh so Rachel, just needed to plug that in really quick just in case fools didn't know. Now let's jump into uh the second stock here. Well, I wanted to talk about a company that probably isn't brought up a lot in our videos as we talk about all the chip and big tech players. I wanted to bring a REIT a real estate investment trust to today's discussion. you know, I'll see comments that we talk about uh you know, a lot of the the tech companies all the time and so I wanted to just mix things up a little bit. So going to talk about Equinex, ticker EQIX. You might be wondering how in the world does this relate to the AI play. So Equinex is the largest data center REIT in the world. It owns and operates about 270 plus data centers across 75 major metro markets globally. uh the REIT serves cloud providers, enterprises, increasingly AI workloads. So essentially they're profiting from the physical real estate and interconnection infrastructure that every AI player needs. So Equinex as a real estate investment trust or REIT, they generate recurring contracted revenue from leasing data center capacity. And so you know they have a wide range of tenants. They are essentially the landlord in the AI infrastructure space and they're doing so uh with an incredible growth rate in terms of their financials. You know Q1 revenue grew 10% year-over-year to 2.4 billion. Q2 revenue was 2.6 billion up 16% year-over-year. I want to talk about Xcale. That's Equinex's joint venture program specifically for hypers scale and AI tenants. So in one of their earlier joint ventures they had partnered with uh Singapore's sovereign wealth fund uh to bring in you know outside capital rather than funding everything off their own you know balance sheet and then in the second quarter of this year Xcale this joint venture signed 134 megawatts of new leasing capacity in the Americas. Uh there was a Hampton Virginia lease that alone contributed over a hundred million in one-time fees on the broader power picture. So, Equinex controls about three gigawatts of total land to be developed companywide. They have about 700 megawatts currently under construction. They still think they're going to have 2 gawatts of total capacity remaining by the end of their 2029 planning window. And more than 80% of that planned capital expansion is targeted at the top 25 global metros. And that's where it already has customer relationships, where it already has uh utility access in place. Equinex also has a product called Fabric. Essentially what that does is it lets customers privately and directly connect to other companies, clouds, and networks inside its facilities. That's a double-digit growth revenue source for Equinex. Uh Equinex has surpassed 500,000 interconnections globally. That is the most in the industry. They have collaborations with the likes of Cisco, Nvidia, Salesforce. uh as a real estate investment trust, they are required to pay out at least 90% of their income as dividend. They continue to raise their quarterly dividend given the pace of their growth. Uh they've raised that, you know, double digits just in 2026. It's an interesting business. If you are someone that likes to invest in the real estate space and you also want to gain exposure to the data center boom, Equinex could certainly, you know, be one to consider. uh you know nobody knows for certain which AI lab or hyperscaler will win in the AI race and I've said multiple times I think that there is room for multiple winners but every single one of them needs somewhere to put their servers and to plug directly into each other's networks without building brand new infrastructure from scratch and that's I think what makes Equinex a compelling company to consider. >> Yeah Rachel I mean I'm not too familiar with this company but a few things that you mentioned really stood out to me. Uh the first one was kind of that XScale solution right that that joint venture that they're doing with hyperscalers with AI tenants. Um the numbers uh that we saw were uh they expect um to have roughly 700 megawws currently under construction right now. They have about 3 gawatts of total developable land uh in capacity. We've talked about it in other episodes. Land power and shell is a massive constraint. And with Equinex doing really good at doing this and providing great returns to shareholders in returns in regards to to dividends, I see this as a great play to kind of get into the data center market without looking at maybe kind of like your Neocloud players or or some of these other companies that tend to be extremely exciting um in forms of price reaction right now. Uh the other thing is uh the the fabric side, right? the fabric side is a good product solution that can help them add additive revenue to a market that they are already in. Yeah, essentially I mean Equinex is a multi-tenant digital infrastructure business model that's structured as a real estate investment trust and unlike the public cloud providers um think AWS or or Microsoft Azure that rent out the virtual computing power and storage Equinex is carrier neutral so they provide that underlying physical real estate that the power scalability the cooling the data security that enterprises need to house their physical hardware and you know collocation services are kind of the real estate foundation of the business as I was talking about earlier. You know, they actually are renting out the server racks, the cabinets that the the customized security uh cages, they have an industryleading over 99% operational uptime. And as data processing is shifting to AI workloads, they're building out these AI ready highdensity solutions that provide anywhere from uh 10 to 15 times more power per rack. um they have integrated liquid cooling to handle the the energy needs of these GPUs. So fascinating kind of way to play this space. Maybe if you're a more conservative investor, your risk tolerance isn't going to quite fit with some of these more volatile AI plays could be one to consider. Uh two very different angles on the same AI spending wave. You know, Meta that Jose covered, this is obviously the direct AI bet. This is one of the biggest companies of the world. uh Equinex perhaps a bit lesser known sort of this neutral infrastructure landlord uh that is also a very key player in this space. So we'd love to hear your thoughts in the comments. Uh let us know what companies you'd like us to cover in the next video. Uh give us a like, press the subscribe button, and we will see you in the next video.