4 Tech Shares Resilient to the AI Bubble [Podcast]

Reasons for rising “bubble” concerns in 2025:
The adoption of AI has surged at an impressive speed, with the market rewarding successful ventures aggressively. The concern lies in the potential for sharp selloffs if growth doesn’t meet high expectations.

The two critical components of an AI bubble:

• Valuations: Numerous AI-related firms are trading at lofty multiples, providing little margin for error.
• Profitability: Significant investments in AI infrastructure are advantageous unless the anticipated returns do not materialize.

Comparing today’s AI landscape with the dot-com bubble:
During the early 2000s, the internet represented a legitimate long-term investment, but over-expenditure resulted in many companies struggling to achieve monetization. Mike proposes that AI mirrors a similar “infrastructure development” scenario, with data centers, clouds, and power grids presenting bubble risks.

Mike’s 3 indicators for “AI-bubble-safe” tech stocks:

• Thriving prior to 2023 (strong fundamentals, robust balance sheet).
• Possessing additional growth paths beyond AI excitement.
• Exhibiting a robust Dividend Triangle (consistent revenue, EPS, and dividend growth).

The 4 stocks analyzed—and the rationale behind their safety:

• Microsoft: A sticky enterprise environment, Azure cloud expansion, and seamless AI integration within software subscriptions.
• Broadcom (AVGO): Established acquisition strategy, critical connectivity components, and chips that boost computing efficiency.
• Apple: Ecosystem-driven revenue flow; decreased AI hype might reduce bubble risk, with a strong balance sheet enabling collaborations or acquisitions.
• Alphabet (Google): Leading ad platforms, numerous growth avenues (e.g., Waymo), and a comprehensive AI infrastructure (chips, data centers, cloud, models).

Rethinking diversification within “tech”:
Mike acknowledges that these options are distinct; they encompass devices (Apple), software (Microsoft), semiconductors (Broadcom), and marketing/communications (Alphabet). Different drivers, unified theme.

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