Why you should Invest in AI

Posted on August 13th 2026

AI, AI, AI, that is all we hear. And most of us don’t know much about it other than using it for a novelty item, changing pictures or improving a paper. My Substack is and will be AI free. AI writes way better.

This AI trade is multiples bigger than the internet boom. Once the internet was established, it slowed. The money was made on the buildout. AI in contrast, is virtually infinite in it reach and we have no idea how many things will run on it other than “a lot.” Like the internet, huge increases in smaller stocks who are the pick and shovel companies for AI have doubled in price and sometimes doubling multiple times as sales ramp up with amazing speed. From selling relays, wire, HVAC down to striping the parking lot.

Those small companies are great and I own one, but it is hard to guess who will survive and who will go. The internet boom was an incredible opportunity. But hundreds of firms went broke, some of them recommended by formerly reliable analysts. I prefer a different approach. We would invest in Large established companies that were huge before AI. These have little risk of failure. Among these giants 4 companies have stepped up and are investing huge amounts in the AI build out.

Among these giants, 4 companies have stepped up and are investing huge amounts in the AI build out. These are called “hyperscalers.”

-Microsoft

-Amazon

-Meta (Facebook)

-Alphabet (Google)

The computing power from the Data centers are leased out. The backlog is the money that is coming from signed long term leases.

They will spend a combined $750 billion dollars in 2026 to build data centers and other infrastucture. They are committed to over a Trillion next year. And they will ramp up for the forseeable future. Why are they doing this? These mega rich companies are doing it to….make money! Can you believe it? They are strategically leading the pack on this…because they can. The profits will be enourmous when they are up to full speed. Even now they are earning income.

Capitalism: Where you have your largest companies paying for trillions in AI buildout. Pretty nice.

Google recently announced quarterly income from AI of $28 billion and showed growth over last year’s 2nd quarter of 82%. Remarkable. They are not just growing because they want to “build it and they will come.” There is a backlog of business of $462 billion! And it’s growing. Amazon’s backlog is now $244 billion, up 40% year over year. “There’s a lot of demand for AWS right now, in the AI space and also in the core AWS space,” Amazon CEO Jassy said.

That is how much additional their gross profit could be once built. This will never happen again in our lives. That is me predicting. I know, and regularly remind people that “No tree grows to the sky.” But with AI, they predict that land based data centers will have to be grown in space. I know, who does this stuff? But, we don’t need to know about AI other than a broad overview and be armed witht the profit and loss numbers.

Please give me a call if you want to meet to go over how AI could work in your portfolio. Craig Verdi 208-559-6250

Next time. Why are people fighting data center construction? And, how many millionaires and multi-millionaires has AI created?

Disclaimer: I am not recommending the purchase or sale of any stock mentioned in this article. Disclosure: I own them all.