Time to buy AI picks and shovels companies again?

Recent doubts about AI not being profitable has caused a sharp price drop (10-15%), but now the market is beginning to think they have over reacted! Memory suppliers have secured safe, long-term orders. Large companies have increased their capital expenditure on AI, not decreased it. Quarter profit numbers are showing positive gains.

Memory manufacturers are starting to recover today.

I will be looking closely at Intel, AMD, Sandisk, WD, Samsung, Broadcom, ARM, Micron, Hynix and Seagate. I have already topped up on more Hynix, Korean ETFs and Sandisk this week.

I think that the whoever wins the AI model race (Claude, Gemini, GPT, Deepseek, etc.), there will be a heavy demand for AI and thus a heavy demand for the picks and shovels used by AI (components). Energy is also required for AI data centres, but here it is hard to pick the winners and losers, especially as most energy generator companies are already at full capacity with a full future order books.  I need to find undervalued companies with a wide moat.

For ETFs, a good semiconductor ETF and a Korea ETF should serve me well for the next few years.

I will use my T212 ISA to buy and sell the individual companies while holding Korea distributing ETFs long term in my T212 Invest account (and accumulating semiconductor ETFs in my ISA).

Let me know what you are doing...