Three of ‘your father’s’ stocks could be some of the best AI derivative investments from here
(PRO Views are exclusive to PRO subscribers, giving them insight on the news of the day direct from a real investing pro. See the full discussion above.) Classic companies more familiar to the previous investing generation that have reinvented themselves could be some of the best plays off the artificial intelligence-driven data center buildout from here. With big runs in names such as Nvidia and AMD over the past few years, stocks further down the line in the data center buildout chain are starting to really take off this year and investor Tim Seymour is a believer. Seymour, chief investment officer of Seymour Asset Management and manager of the Amplify CWP International Enhanced Dividend Income ETF , named three old companies that were likely in “your father’s” portfolio that he likes now. The first one is Cisco , the marquee name of the dot-com bubble, which is up 18% this year. “There’s no question that bigger networks, ethernet-based networks are again a part of the data center trade,” said Seymour in the exclusive CNBC PRO video. Said Seymour: “Your father’s Cisco was a networking company that obviously saw — let’s just say — some level of that business got compromised as the world changed. They are the dominant, I think, enterprise server player. But what was exciting about Cisco over the last five years, certainly multiple accretive, is that this was a software company, right? This was a company that was transforming itself into 50% plus recurring revenue streams from security software. I think the combination here in the new world order puts Cisco quietly in a great spot.” Seymour called Cisco “the cheapest mega cap tech stock that most people aren’t even focused on.” Cisco trades for 17 times next year’s earnings estimates, nearly half that of Nvidia’s multiple, per FactSet data. Seymour also named Caterpillar , founded in 1925, as the next old school beneficiary. “It’s fascinating because there are different pieces of the AI trade,” said Seymour. “And just in the same way we talk about companies, not just tech companies, that are going to be utilizing AI and may transform them … their margin profile. … We’re talking about big industrial companies.” “Caterpillar is very intimately involved in the whole data center buildup,” he added. But he pointed out that it has direct exposure to data centers through its back-up generator business. The third stock named by Seymour was Germany’s Siemens . (See video above for more of his views.) Disclosure: Seymour is long Siemens in the IDVO and long Cisco in multiple portfolios.
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