“The long leash investors were giving AI is probably over,” said Eric Lynch, managing director at Scharf Investments during an appearance on CNBC. The AI trade is concentrated on mega-cap tech names that are expensive and investors want to see these companies generating profits given the extensive investment in AI. When it comes to risk/reward in this space, Eric shared that Samsung is a very compelling investment opportunity. The company saw second-quarter revenues jump 23% YOY and operating profit increase by a whopping 1,500% YOY. Samsung trades at 10x earnings while U.S. mega-cap tech names such as Apple are trading at 30x earnings. “We’re modeling out 40% earnings growth for Samsung in 2025 and if they receive accreditation by Nvidia for their HBM3E chip, the stock is poised to take off.”

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https://www.cnbc.com/video/2024/07/31/nvidia-pricy-chip-buyers-looking-for-alternatives-investment-firm.html