This week I appeared on The Street, where I had a long conversation with anchor Caroline Woods about the state of AI-related tech stocks today, with specific attention to infrastructure, chips, software, and the big upcoming IPOs of SpaceX and OpenAI. Click the link below to see the full video on YouTube, or read on for an AI-generated, human-edited overview and summary of the segment.
Link to segment on YouTube.
Overview
Patrick Moorhead argues that the recent tech market sell-off stems from valuation concerns and macro factors like interest rates, rather than a decline in artificial intelligence demand. He views this volatility as a prime buying opportunity during the “early innings” of a decade-long AI expansion cycle. For near-term growth, Moorhead favors overlooked infrastructure and hardware providers like Dell, HPE, Cisco, and Qualcomm over software names. In a rapid-fire assessment of major tech players, he expresses a bullish outlook on tech valuations, deeming the semiconductor pullback an overreaction. Furthermore, he identifies OpenAI as his most anticipated initial public offering within the broader artificial intelligence landscape.
Outline
Market Context and the AI Trade
- Caroline Woods of The Street introduces the segment by noting that the tech sector is under pressure and wonders if the AI trade is in trouble.
- Patrick Moorhead explains that the recent sell-off is driven by valuation concerns, China export controls, inflation data, and geopolitical uncertainty around Iran rather than a lack of demand.
- Moorhead frames the current situation as a market dip during a massive, decade-long AI infrastructure buildout that is currently only in its third year.
- Woods asks for clarification on whether the buying opportunity is present today or if investors should wait.
- Moorhead believes that the opportunity is immediate, though he suggests that investors should watch how the market factors in interest rates and global gas prices.
Infrastructure and Hardware Investment Strategies
- Woods asks where investors should first look to place fresh capital within the tech sector.
- Moorhead recommends focusing on infrastructure names that do not get enough respect, specifically identifying Dell, HPE, and Cisco.
- He explains that enterprises are worried about token prices and are shifting to local platforms powered by NVIDIA, Intel, and AMD chips rather than relying solely on cloud-based AI.
- Woods observes that Moorhead omitted the “Magnificent 7” companies from his initial list of attractive infrastructure targets.
- Moorhead explains that while NVIDIA remains a good look, the stock market is experiencing a mental block regarding its massive forward price-to-earnings ratio and projected cash flows.
Chip Sector Opportunities and Software Volatility
- Moorhead identifies Qualcomm as an attractive, cheap large-cap semiconductor play that is diversifying into datacenter CPUs.
- He points to Micron as a structural growth play due to high-bandwidth memory commitments stretching all the way through 2026.
- He also notes that Intel represents a strong foundry turnaround story, supported further by Cadence software committing to Intel’s latest chip node.
- Woods notes the absence of software names from the discussion and asks what that indicates about current AI opportunities.
- Moorhead states that, while he rejects the idea that SaaS company valuations will drop to zero, software stocks face near-term volatility due to rapid model releases from Anthropic and OpenAI.
SpaceX Valuation and Broader Market Impacts
- Woods asks whether the performance of the upcoming SpaceX IPO is necessary to keep overall enthusiasm for the AI trade alive.
- Moorhead suggests that a strong SpaceX outing would be positive for tech enthusiasm, though its massive capital requirements could initially drag other market sectors down.
- He notes that SpaceX represents a brand-new market that includes potentially circumventing traditional telecom carriers with its satellite network.
- Woods asks which technology stocks should be sold to enable buying SpaceX shares.
- Moorhead recommends taking profits from software names like Salesforce or ServiceNow due to their ongoing market volatility.
Rapid Fire Evaluation of AI Winners
- Woods transitions the interview into a rapid-fire game called “This or That” to summarize valuations and specific stock picks.
- Moorhead characterizes current tech valuations as justified, the chip sell-off as an overreaction, and the AI movement as a booming early-innings phenomenon.
- He selects Microsoft as his top AI play, favors Google over Nvidia, and chooses Meta over Google and Apple.
- Moorhead favors Intel over AMD, Oracle over Adobe, Broadcom over Micron, Qualcomm over Cisco, IBM over Cisco, and Dell over HPE.
- Moorhead names Qualcomm as the most overlooked AI stock and OpenAI as the future IPO he would buy on day one, concluding that he remains highly bullish on the tech trade.
Companies Mentioned
- Dell
- HPE
- Cisco
- NVIDIA
- Intel
- AMD
- Qualcomm
- Micron
- Cadence
- Alphabet / Google
- ServiceNow
- Salesforce
- Anthropic
- OpenAI
- SpaceX / xAI
- Microsoft
- Meta
- Apple
- Oracle
- Adobe
- Broadcom
- IBM
- ARM
Keyword Summary
AI infrastructure, cloud computing, chips, data center, tech valuations, agentic AI, software, semiconductors, IPO, artificial intelligence
Founder, CEO and Chief Analyst | + posts
Patrick Moorhead is the founder, CEO, and chief analyst of Moor Insights & Strategy. His big-picture view of technology is grounded in more than 20 years as an executive leading strategy, product management, product marketing, and corporate marketing functions at NCR, AT&T, Compaq, and AMD. He has shared his expertise in areas from silicon to infrastructure to enterprise SaaS and everything in-between in thousands of national broadcast appearances (CNBC, Yahoo Finance), articles (Forbes, CIO), research-based analyses, and podcast episodes. Today, he has 100+ CXO-level advisory clients and is often ranked the #1 technology industry analyst by ARInsights.
