Beyond Nvidia: Finding Opportunity In The AI Buildout

AI infrastructure investment has outpaced revenue growth, pushing major tech players into negative free cash flow and increased debt financing.

Broadcom (AVGO) faces margin compression and supply constraints despite strong AI revenue growth; its technical setup may signal a prolonged correction.

Joe Albano from Tech Cache focuses on less crowded beneficiaries like Bloom Energy (BE), which offers rapid power solutions for data centers and broader industrial use cases.

Valuation metrics are secondary to sentiment and technical structure.

Joe Albano from Tech Cache explains why the easy money is gone when it comes to investing in AI.

Broadcom, earnings takeaways, reading technicals.

Bloom Energy - looking beyond popular AI names.

Credo Technology chart work.

Nvidia, M&A, Huang and Musk.

Joe Albano from Tech Cache explains why the easy money is gone when it comes to investing in AI (0:35)

Broadcom, earnings takeaways, reading technicals (6:00)

Bloom Energy - looking beyond popular AI names (14:15)

Credo Technology chart work (24:20)

Nvidia, M&A, Huang and Musk (26:10)

Rena Sherbill: Very happy to have back Mr. Joe Albano, who runs the investing group Tech Cache on Seeking Alpha. It's always great to talk to Joe about the tech space and how he's thinking about stocks and the market. Joe, welcome back to Investing Experts. It has been too long.

Joe Albano: Yes, thank you, Rena. Glad to be back.

Rena Sherbill: It's always great to have you. So, what are you thinking most about these days? On the podcast, we have been talking about earnings and tech names doing well, and yet the market sentiment does not agree or does not seem to be in the same place. We have a a real volatile market. Where are your eyes and mind focused most these days?

Joe Albano: I 've been doing quite a bit on the AI investment side of things, the build-out with data centers, the CapEx from all the major companies, Amazon (AMZN), Google (GOOG) (GOOGL), Meta Platforms (META), Microsoft (MSFT), OpenAI (OPENAI), Anthropic (ANTHRO), everybody who's literally building the AI infrastructure as we know it. And we we're reaching a point where CapEx is substantially outpacing the growth of, or CapEx growth is substantially outpacing revenue growth. And so that means the easy money is gone, the the cash on hand in some cases, but mainly the the cash flow part of it, we're now dipping into negative free cash flow for the first time in some of these companies' history. And then for sure in the last you know decade where it's all been about growth and always high margins and how cloud has allowed them to, you know, have 75%, 70% margins with massive ki free cash flow. CapEx was kind of moderate back then because they were just investing in simple run of the mill data centers, not anything crazy like the AI compute requires now, where it literally is 10x, what we were doing just a couple of years ago. And that money is kind of disappearing fast. Google's taking out debt, Meta Platform's taking out debt, we're raising capital through equity funding, issuing shares. And we're getting to the point where these buyers of this compute, or actually should say the sellers of the compute are now in a position that they're moving down the line on customers, moving from these large Mag Seven kind of crew to the AI labs and the Frontier labs, the ones that don't have proven business models, who don't have free cash flow at all, who aren't profitable, who expect that we're we're gonna grow revenue 10, 20x over the next three years and as long as they get more compute, it'll happen, as they tell us. I tell my subscribers, it's like listening to used car salesmen. They're running and playing their book, and they're getting the money. They're getting the private equity. They're now in the process of having Nvidia (NVDA) and Broadcom (AVGO) back them, especially with NVIDIA financing some of these Broadcoms saying they're facilitating some of this financing, but they're keeping it off their balance...