As the AI boom continues to captivate investors, attention is shifting to the small and mid-cap space. Lisa Thomas, Associate Head of Research at TD Cowen, joins Catalysts to shed light on promising AI investment areas outside of the typical big tech companies.
Thomas suggests that investors looking to get into the AI space should consider data center companies like Credo (CRDO) and DigitalBridge (DBRG), which he says offer a “very good opportunity” to diversify a portfolio and also have the potential for significant upside.
To learn more about expert insights and the latest market trends, click here to watch this full episode of Catalysts.
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Video Transcript
It's clear that big players like NVIDIA are really dominating this AI explosion.
If an investor wants to invest in AI, what are some of the smaller stocks they should look out for in the small and mid-cap space?
Yes, again, we think some of the companies we just upgraded like Credo and Digital Bridge are great ways to leverage the data center. We just got a 400+ page report from TD Cowan that talks about all the pieces of data center and investment that people should be looking at. Whether you're looking at the power constraints that are created by our exponential reliance on data centers, whether you're looking at speed enablers like Credo or data center architecture enablers, or whether you're looking at a broader portfolio of companies around digital infrastructure, we have an opportunity to leverage some very high quality companies through our investment in Digital Bridge.
We think these are really great opportunities.
As you know, large cap stocks have been performing really well and still have a lot of room to go up.
And of course, the outperformers within the large cap sector are the great seven stocks and then within that there's a very small number of smaller concentrated stocks.
So, I think the timing of this article is perfect because investors are taking a step back and looking at SMS and seeing it as either undervalued or arguably having a historic valuation gap relative to large cap stocks.
And they're really asking whether this is an opportunity to grow their portfolio and even extend the bull market.
Yeah, that way more people in the market and more shares in the market will participate in it.
So that's it for now. Lisa, thank you so much for joining us.
That's all from Lisa Thomas TD Cowan, Associate Director of Research.
