BY HANS ALBRECHT
October 10, 2025
A shift is upon us. The AI infrastructure layer is largely built. It will continue, but those new data centers sprawling around the world won’t do much if there isn’t enough electricity to power it, or plumbing to keep it cool.
And that’s why it’s time to rotate: from the builders to the beneficiaries.
One to Love: iShares Russell 2000 ETF (IWM)
We’ve spent the last ten years building the digital backbone of the AI economy – data centers, semiconductors, and high-bandwidth networks. That phase is maturing. The next one is about what that infrastructure enables. And that is actually more exciting to me.
Just like the 1990s weren’t really about the cables or routers, but what they unlocked for society – email, social media, e-commerce, smartphones – today’s opportunity lies in how AI will now drive productivity, efficiency, and innovation across the rest of the economy.
That’s why I’m turning my attention to IWM. These smaller, more domestically focused companies are the users of the new AI layer, not the builders. They stand to benefit most as AI tools lower costs, boost margins, and level the playing field against mega-caps.
AI is about to become a utility – not just a buzzword. And the greatest beneficiaries are the ones finally able to harness it to do more with less.
One to Leave: iShares Semiconductor ETF (SOXX)
Look at what a beautiful run we’ve had in SOXX: My proprietary MTI indicator, which you get access to in Turbo Income, went long in early September and then moved to the sidelines earlier today.
That’s one of the great things about the MTI, it KEEPS you in the game while the market does its thing.
SOXX – led by Nvidia, Broadcom, and AMD – was the purest expression of the “picks-and-shovels” phase of the boom. But with the pipes laid and much of the capex wave priced in, the easy money may have been made for now.
The market is forward-looking, and it’s already discounting multiple years of growth. Semis will remain critical, but leadership tends to shift once the infrastructure phase peaks. Margins compress, competition rises, and capital starts searching for the next frontier – the companies turning that compute power into profits.
That next frontier is the broader economy: software, industrials, healthcare, logistics – the real-world adopters.
Hans
Want To Watch Us Live?
Add Our Free Events To Your Calendar By Clicking Your Email Icon Below!
