The AI chain is becoming so broad that stock picking and ETF investing are now two very different bets.
Stock picking works best when you correctly identify the bottleneck before Wall Street fully prices it. That was NVIDIA in 2023, HBM memory in 2025, and arguably power, cooling and photonics today.
ETF investing works better when you believe AI spending will keep expanding, but you are less certain which winner ultimately captures the profit pool.
My current ranking:
1. Memory (Most bullish near-term) The market has realised AI is not just a GPU story. HBM supply remains constrained, pricing power is strong, and AI servers require enormous memory scaling. Recent launches like the Roundhill DRAM ETF show how aggressively capital is rotating into this theme.
2. Data centres + power This may become the biggest second-order winner. Every AI model ultimately needs electricity, transformers, cooling, fibre and land. Even if GPU growth slows, power demand may continue rising. Global X's data centre and digital infrastructure themes are built around this thesis.
3. Optical communications / photonics Possibly the highest upside but also the most speculative. If AI clusters keep scaling, moving data efficiently becomes as important as computation itself. The industry is increasingly discussing photonics-focused ETFs and products.
4. Space I like the long-term story but view it as less directly tied to AI monetisation. It is more of an infrastructure and sovereign-tech bet than a pure AI bottleneck.
Personally, if I had to choose:
Highest conviction stock-picking area: memory + photonics.
Highest conviction ETF area: AI infrastructure broadly, including memory, data centres, networking and power.
One risk investors underestimate: thematic ETFs often launch near peak enthusiasm. The theme can be right while ETF returns disappoint because expectations were already priced in. The memory ETF boom itself is becoming a warning sign of how crowded the trade is getting.
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