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While OpenAI may be the “straw that stirs the AI drink” and dominates daily headlines, investors should focus on the “picks and shovels” of the artificial intelligence boom, according to Beth Kindig, lead tech analyst at I/O Fund.
In a Fox Business interview uploaded on I/O Fund’s YouTube on Nov. 12, Kindig acknowledged OpenAI's “pivotal” role in accelerating AI adoption but argued that the “majority of the revenue and the profits” for investors are currently found in foundational technology like compute, networking, and energy.
Kindig identified Micron Technology Inc. (NASDAQ:MU) as one of the top “accelerator” picks, driven by the exponential demand for High Bandwidth Memory (HBM).
She called HBM “very critical for the next leg up in AI,” noting that its use per GPU is increasing 3.5-fold just as the number of GPUs is multiplying rapidly.
This has resulted in “surging” margins for Micron's AI-related DRAM segment. “That is not the Micron we used to know when it was tied to consumer devices,” Kindig stated.
In the AI software and data category, Kindig named Reddit Inc. (NYSE:RDDT) as her number one pick, citing the “valuable data” it holds.
“This is data that expresses human opinions and sentiment, which AI models desperately need,” she explained.
Kindig pointed to Reddit's licensing deal with Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google as quantifiable proof of its value, a move that helped rocket the website from a rank of #85 to the top five, alongside giants like Facebook and YouTube.
This “picks and shovels” strategy gains urgency as OpenAI, which Kindig described as “years ahead” of many competitors, shifts to a for-profit structure.
She noted this move “puts a lot of pressure on already publicly traded companies” and will allow OpenAI to “speed up even faster on commercializing,” further intensifying the race for AI dominance.
Micron closed 1.57% higher at $244.90 apiece on Wednesday. However, it fell by 0.51% after-hours. The stock has advanced 180.43% year-to-date and 145.10% over the year.
It maintains a stronger price trend over the short, medium, and long terms, with a solid quality ranking. Additional performance details, as per Benzinga’s Edge Stock Rankings, are available here.
RDDT, on the other hand, closed 2.59% lower at $202.82 apiece on Wednesday, and fell further by 0.65% after-hours. The stock has advanced 22.25% YTD and 53.58% over the year.
Reddit maintains a weaker price trend over the short term but a strong trend in the medium and long terms, with a poor value ranking. Additional performance details, as per Benzinga’s Edge Stock Rankings, are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Ink Drop On Shutterstock
