Our New #1 AI Power Stock

At The Pragmatic Optimist, we believe that investment portfolios focusing on AI themes should mandatorily require agile & dynamic portfolio allocation strategies to accurately capture the rapid pace of architectural changes occurring in AI infrastructure.

💸 After all… where AI capex flows, so does portfolio capital, doesn’t it?

🧭 It all started with the Great Compute Inflection in 2023, followed by Networking Scaling a year later, while the Memory Bottleneck and networking’s Optical Hegemony are now in a pole position to compete for hyperscaler capex amidst AI’s unprecedented data center boom.

⚡But, as is typical with AI, the data center boom has given rise to a new architectural pillar in AI. Only this time, this new architectural pillar is colliding with the world’s energy infrastructure, creating a massive structural power deficit that hyperscalers are rushing to solve.

At the epicenter of this AI energy chokepoint is an industrial titan that commands the infrastructure needed to address the power deficit. This energy titan 👇 has racked up nearly $200B in backlogs, driven by an insatiable demand for AI power generation. But demand is so elevated the company’s capacity is sold out through this decade.

💰This company has become one of our favorite AI plays over the past quarter. It is currently a Full weight position in our portfolio (i.e., >4% of our portfolio capital), and we have plans to bring it up to an Overweight (>7%) position if the opportunity presents itself.

💡 We have always prided ourselves in our structural research to identify high-conviction AI infrastructure winners early on. In early 2025, we positioned Celestica CLS 0.00%↑ in AI networking and prioritized Advanced Micro Devices AMD 0.00%↑ in compute, making them both our TPO portfolio’s top-conviction picks. We also opportunistically scaled into Marvell MRVL 0.00%↑ and Micron MU 0.00%↑ through the end of last year and early 2026 into The Pragmatic Optimist Portfolio. This active positioning was driven by fundamental analysis across emerging AI infrastructure domains such as memory, storage, and optical connectivity domains.

We now feel compelled to explain our deep reasoning behind making this energy company one of our largest AI plays in The Pragmatic Optimist Portfolio. In this post, we explain our stance on this energy company, including recent updates from the company and key price levels where we will add next.

📌On a YTD basis, The TPO Portfolio has delivered returns of 17% 💪, compared to 11% for QQQ QQQ 0.00%↑ and 14% for AIQ AIQ 0.00%↑ . Our portfolio has also fared significantly better in the month of July, declining (5)% compared to (9)% and (15)% for QQQ and AIQ, respectively.

You can track our entire portfolio and all our live trades in the AI Stock Tracker 2.0 tool using the link below. 👇

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