A recent post on Reddit in r/stocks by user daynightcase, titled “AI Madness and Profitability,” sheds light on a unique perspective regarding the current surge in AI-related stocks.

The Redditor challenged the popular narrative surrounding chip and cloud hardware suppliers such as NVIDIA Corp NVDA and Advanced Micro Devices AMD, asserting that there might be more value in the stocks of buyers of AI hardware instead. Major listed players such as Alphabet Inc GOOG GOOGL aka Google, Meta Platforms Inc META, Apple Inc. AAPL, Amazon.com Inc AMZN and Microsoft Corp MSFT, along with OpenAI (abbreviated as GOMAAM stocks), draw investor attention here.

Irrational Run In Chip And Cloud Hardware Sector

In the post, the Redditor dismissed the idea of an AI bubble or a nutty uptrend in the chip and cloud hardware sector. While acknowledging the impressive YoY revenue growth and profit margins of companies like Nvidia, the Redditor argued the market’s short-sightedness led to an irrational run, with many investors kicking themselves for not foreseeing the trend.

The author took a step back to analyze the trend from a different perspective, focusing on the main buyers in the AI space — the GOMAAM stocks. The post emphasizes three key points:

1. Finite capex of companies
2. Desire of every company to make money
3. Inclination of companies to reduce capex while still growing

GOMAAM, As Buyers, Could Drive The Next Uptrend

Daynightcase argued GOMAAM, being the major buyers, will benefit the most from the upcoming leap in software and services innovations. The Redditor questioned the long-term value of investing in Nvidia and AMD, asserting that GOMAAM’s internal silicon development will eventually reduce their reliance on external companies.

Also Read: Google Is ‘Down, But Not Out’: Alphabet Analyst On GenAI Gap With Microsoft And OpenAI, Potential Dividend Move

The post concluded by addressing the doom and gloom surrounding companies like Apple and Alphabet, suggesting that these giants, along with other major players, hold more value for long-term investors. The Redditor advised against blindly following trends and encouraged investors to consider the entire ecosystem, emphasizing the potential for profit in companies providing end-user products.

Where To Look For Potential Value?

Daynightcase’s insights challenged the conventional wisdom in AI-related investments, which could prompt readers to reevaluate their strategies and consider the broader landscape of companies involved in the AI space — a reminder to investors not to overlook the potential value offered by major players like GOMAAM in the rapidly evolving technology sector.

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