Summary

• AI's evolving token economics are reshaping software margins, with per-token costs falling but enterprise AI budgets rapidly consumed by agentic workloads.
• Salesforce (CRM) and Adobe (ADBE) are mitigating the 'token tax' by shifting to consumption-based or hybrid billing, preserving or expanding gross margins.
• Software firms lacking per-usage pricing risk margin compression as AI-driven COGS rise, while infrastructure players like NVDA, MU, and AVGO benefit from surging demand.
• Owning infrastructure and monitoring software companies' gross margins are key to identifying winners as the AI sector transitions to cost-aware, profit-driven models.
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Introduction

This article is grounded on my ongoing AI supply-chain coverage, where I have intertwined a macroeconomic overview with specific per-layer and single stock articles.

Recently, we discussed two stocks that investors currently shun:

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