Dips Never Last. I'm Buying These 5 Stocks Now.

A huge shock just hit the market and

Wall Street isn't ready [music] for it.

The media isn't covering it and it's

much bigger than most investors realize

because it'll hit every stock from three

angles at once. The cracks are already

showing, but no one is paying attention.

My name is Alex and I've been investing

in AI stocks for over 10 years now, and

I've seen enough of these drawdowns

[music] to know what real buying

opportunities look like. Let me walk you

through what's happening and how I'm

investing in it. Your time is valuable.

So, let's get right into it. The entire

AI trade is built on one assumption. The

amount of compute power that the AI

industry can build is only limited by

money. Every stock's market cap, every

capex budget, and every earnings call

follows the same pattern. Build it and

they will come. But over the last couple

weeks, those assumptions have started to

crack. And AI stocks did too. TSMC is

the company that actually makes the

world's most advanced chips. So, every

AI company depends on them to do their

job. They reported earnings on July

16th, and they had a blowout quarter.

Revenues came in at over $40 billion,

which was up 34% year-over-year, while

their earnings per share jumped 77% from

last year. Both numbers beat analyst

expectations, and management even raised

their guidance for the rest of the year.

Results like these are exactly why Wall

Street isn't ready for what's about to

happen and why the media is missing it

altogether. Chip on wafer on substrate

or co-as is an advanced packaging

technique where TSMC mounts a finished

chip and its memory onto a single base.

That way everything sits extremely close

together to transfer data as fast as

possible. This is the step that turns

parts into working processors. On that

same earnings call, TSMC's CEO said that

their co-as nodes are running at max

capacity already and they're sold out

into 2027. For investors, that means two

important things. First, all the money

in the world won't produce more chips,

at least in the near term. Some of

TSMC's customers are already waiting for

more than a year for their chips to

clear this co-ass packaging step, which

creates a fundamental limit on how fast

other AI companies can deploy their own

hardware infrastructures. And second,

increasing production capacity won't

solve this problem in the near term

either since securing land and power,

building chip factories, and filling

them with specialized machines is a

multi-year process. And speaking of

specialized machines, ASML also reported

earnings last week. ASML is the only

company on Earth that can build EUV

lithography machines. These machines are

the size of a small apartment and

contain over a 100,000 parts that come

together to print microscopic circuits

onto chips using extreme ultraviolet

light or EUV light for short. And since

ASML is the only company that makes

them, AI chip production can only grow

as fast as the number of these machines.

On their latest earnings call, ASML said

that they'll build around 65 EUV

machines this year and around 85 next

year. That sounds like a big jump, but

remember what I just said. This machine

ships in hundreds of crates and takes

months just to assemble. After that, it

still has to be calibrated, tested, and

tuned for the specific chip it's going

to be making. By the way, lithography

machines can only run in clean rooms,

special sealed, and filtered facilities

with essentially zero dust in the air

because a single speck of dust landing

on the wafer can interfere with the

light and ruin the entire chip. Oh,

yeah. And on top of that, extreme

ultraviolet light gets absorbed by air.

So EUV lithography machines have to

operate in a vacuum where absolutely

nothing can interfere with the beam. No

particles, no stray molecules and no

vibration. It can take up to 2 years to

go from delivery to producing chips with

these machines at full volume. So

current advanced chipm

at capacity and new machines can take

years to come online. And then there's

the racks that the chips go into.

Earlier this month, semi analysis

reported that Nvidia's Kyber rack has

been delayed by more than a year. Kyber

is Nvidia's next generation server rack

that holds compute trays vertically,

kind of like books on a shelf in order

to pack a whopping 576 GPUs into a

single rack running at around 600 kW.

What makes the Kyber system so special

is that it does away with all the

high-speed network cables connecting

every GPU together and instead it uses a

printed circuit board backplane. If

you've watched this channel for a while,

you've seen me cover this back plane a

few times already because it's one of

the biggest innovations of the entire AI

era. But if you haven't, that back plane

is a circuit board with 78 separate

layers laminated together. 72 of those

layers connect each compute tray to the

rest of the rack. Eight chips per tray

times 72 trays per rack is how Nvidia

gets 576 chips to work together like

their one massive GPU. Compared to

Blackwell, that means data centers can

pack eight times the GPUs in a single

rack while drawing about five times the

power, giving them a lot more use out of

the same physical space when they move

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right, so Nvidia's next generation Kyber

systems are how they plan to pack 576

GPUs into a single rack. That density is

the whole point of the system. But it's

also a big problem. Cramming so many

chips so close together is exactly

what's straining that circuit board that

they all plug into, which is the cause

of this reported delay. Importantly,

Nvidia denied the delay, but they used

pretty vague language. All they said was

that their road map remains intact

without any other details. Currently,

Nvidia's Vera Rubin systems are in full

production. But this delay would push

their Ruben Ultra systems back to 2028.

And even if their road map is intact,

the first Kyber could ship on time, but

take longer to roll out at scale. So,

under the current wave of strong

earnings calls, there's an undercurrent

of three major bottlenecks to AI growth

all hitting the market at once. ASML can

only ship dozens of chipmaking machines

per year. TSMC's AI chip packaging is

already running at its limit into 2027,

and the next generation Nvidia racks

those chips go into might be delayed

altogether. Then add in the Straight of

Hormuz, which has been closed to

shipping since the Iran war began

earlier this year. And it was tightened

again this past month when President

Trump reinstated the naval blockade of

Iran's ports. Like I covered in previous

videos, Taiwan imports over 90% of its

energy. It keeps less than a month of

gas in reserves and a third of the

world's helium ships through that same

passage, all of which TSMC needs to keep

making chips at full volume. So that's

the setup in the market right now. AI

stocks are priced for compute to keep

scaling as fast as companies can spend

their money, but the machines building

and running the AI chips have a hard

ceiling. This is what I think the market

is finally starting to price in as of

last week, which could be a great buying

opportunity for long-term investors that

are patient enough to wait for the

payoff. So, here are the five stocks I'm

buying when the rest of the market

panics. Let's start with ASML itself

since their stock is down by 10% over

the last month. It's worth repeating

that ASML is the only company on Earth

that makes EUV lithography machines.

When there's unlimited demand for

something only you can supply, it

doesn't just mean that you can raise

your prices. It means your customers

can't rush you, they can't replace you,

and they can't negotiate you down. ASML

is expanding their production capacity

by about 30% per year, and demand is

still growing faster than that. So, as

long as chipmakers need more machines

than ASML can make, ASML gets to set the

price. When your customers don't have a

choice, you don't have a problem. ASML's

biggest and most important customer is

TSMC, the Taiwan semiconductor

manufacturing company, ticker symbol

TSM. They run ASML's machines and their

co-as chip packaging processes are fully

booked into 2027. But this dependency

cuts both ways. ASML's machines don't

matter until TSMC packages and ships the

finished chips, and TSMC can't expand

their own production capacity without

ASML's machines in the first place. So

again, when there's way more demand than

supply, TSMC's margins and earnings get

to skyrocket. 67% gross margins and 77%

earnings growth. Exactly the kind of

numbers you'd expect to see from a

company that gets to set its own prices.

But the risks are just as real. The

longer the Straight of Hormuse stays

effectively closed, the more exposed

TSMC becomes to supply chain shocks that

could slow down their chip production

even further. On top of that, the jump

to their next generation two nanometer

chip production is expensive and risky.

It's the first time they've changed the

fundamental shape of their transistors

in over a decade and only the second

time in the company's almost 40-year

history. Long story short, TSMC is

replacing their finfet transistors with

a new structure called gate allaround or

GAA for short. These new chips built on

the 2nanmter node run about 15% faster

at the same power or they can draw about

30% less power at the same speeds versus

the 3nanome chips that are shipping

today. Saving power is the name of the

game when it comes to AI since data

centers are fundamentally limited by the

power they have access to. So using 30%

less power is a pretty big deal. The

reason this is a risk and not just a win

is because brand new chip manufacturing

nodes take a long time to ramp up.

Yields start low and every wafer that

breaks is a cost that TSMC has to eat

themselves. And 2 nanome wafers cost

around 50% more than the current

3nanometer ones. So until these 2n fabs

can fully ramp up over the next few

quarters, they actually drag TSMC's

margins down. That short-term pain for

long-term gains is why I said this is a

great buying opportunity for long-term

investors that are patient enough to

wait for the payoff. TSMC stock is

currently down by almost 15% over the

last month. But there's more to

chipmaking than just ASML and TSMC,

which is where the next stocks on my

list come in. And if you feel I've

earned it, consider hitting the like

button and subscribing to the channel.

That really helps and it lets me know to

make more content like this. Thanks.

Now, let's talk about another important

part of the chipm process, deposition

and etching. The next stock on my list

is Lamb Research, ticker symbol LRCX,

and their core business is selling

machines for etching, deposition, and

wafer cleaning. Deposition is the step

where ultra thin films of material like

metals, insulators, and silicon

compounds are laid across the wafer, one

layer at a time. Think of deposition

kind of like spray painting the wafer in

perfect uniform layers, except instead

of paint, it's the actual wiring and

insulation the chip is built from. A

finished chip is made up of hundreds of

these layers stacked on top of each

other, one layer at a time. The etching

process is the opposite. After a layer

is placed during deposition, etching

selectively removes material to cut the

circuit pattern into the wafer trenches,

holes, and channels where electrical

connections need to run. So deposition

adds a layer and etching carves away

everything that isn't part of the design

down to features that can be smaller

than a virus. Chipm is essentially these

two steps repeated in many cycles layer

by layer until the full 3D circuit is

done. When chipm companies like TSMC,

Intel, Micron, Samsung, and SKHix expand

their fabs, they're expanding them with

machines made by Lamb Research. And the

risks work the same way. If these

companies start expanding slower, Lamb

will feel it first. LRCX stock is down

by 25% over the last month. And buying

it is basically a bet that demand and

production for AI chips will keep

accelerating. And right next to Lamb

Research is KLA Corp. ticker symbol

KLAC. And their stock is also down by

more than 20% over the last month. KLA

builds the inspection and measurement

machines to quality control the chips

coming out of a fab. Their systems can

scan each wafer for defects that are

invisible to the naked eye. They can

flag particles and pattern flaws that

are just nanometers across. And they can

measure whether every layer landed at

the right thickness and lined up with

the layer beneath it. In practice, these

machines use optical and electron beam

inspection tools to hunt for flaws,

metrology systems to measure the

microscopic dimensions of each layer,

and highly specialized software to tie

it all together by telling the fab

what's wrong in the process and where to

fix it. Ka has over a 50% share of the

overall semiconductor process control

and inspection market and over an 80%

market share when it comes to optical

wafer inspection. Specifically, its next

biggest competitor is Applied Materials,

ticker symbol AMAT, which holds just 10%

of the market. KLA expects their

advanced packaging inspection business

to hit about a billion dollars this

year, which would be an increase of more

than 50% year-over-year. When a FAB is

packing billions of transistors onto a

single chip, catching one bad step early

can be the difference between a

profitable wafer and a multi-million

dollar brick. Which is why every chipm

company that's expanding their fabs

needs KLA's machines. And once those

machines are part of the process,

ripping them out becomes expensive and

risky. So chipmakers keep buying them to

make the most out of KLA's ecosystem,

which further increases their market

share in the process. And the fifth

stock on my list is Verdive, ticker

symbol VRT, for one obvious reason. Once

the chips exist, they need power and

cooling, which is Verdives's entire

business. Liquid cooling is now the

default for new AI data centers.

Remember, Nvidia's Kyber rack will hold

576 GPUs and use 600 kW of power. It'll

also change how electricity even makes

it to the rack in the first place. Since

600 kW is too much for current power

delivery systems, Verdivive is one of

Nvidia's partners building that new

power architecture and their 800vt DC

power portfolio is set to roll out right

ahead of Nvidia's Kyber Racks and their

Reuben Ultra chips. I put Verdive last

on this list for two key reasons. First,

if Nvidia's Kyber really is delayed,

Verdivive will feel it too. That's one

reason the stock could be down by almost

20% over the last month. And second,

they're about to report earnings at the

end of this month. So, I'm waiting for

their latest numbers before buying this

dip. A big market shock is here, and

Wall Street isn't ready for it because

it's hitting every stock from three

angles at once. ASML's machine

deliveries, TSMC's chip packaging

capacity, and potential delays to

Nvidia's next generation data center

racks. The media doesn't see it coming,

but now you do. Let me know which stocks

you're buying and what your plan is if

this market draw down continues. And if

you want to see what other stocks I'm

buying, check out this video next.

Either way, thanks for watching and

until next time, this is Tickerol U. My

name is Alex reminding you that the best

investment you can make is in you.