The more AI competition intensifies, 'these companies' make money!

The more AI competition intensifies, 'these companies' make money! | Seo Young-jae, Cha Jin-ho, Yeo Do-eun, Heo Jae-mu [Morning N Investment]

Watch on YouTube ↗ | August 26, 2026 at 02:23 | 54:53 | 3PRO TV (삼프로TV)

Speakers

Seo Young-jae — Manager, NH Investment & Securities

Cha Jin-ho — Director

Heo Jae-mu — Host

Summary

The video discusses the evolving landscape of AI investments, focusing on how cloud providers and specific software companies are benefiting from intensifying AI competition. Hyperscalers are leveraging open-weight models to reduce costs, while new 'neo-cloud' entrants are building infrastructure to meet massive compute demand. The discussion also contrasts struggling legacy software companies with AI-native beneficiaries like Cloudflare and Palantir, highlighting targeted ETFs for investors to capture these trends.

Hyperscalers like Microsoft and Amazon are benefiting from AI model competition by utilizing cost-effective open-weight models.
Meta is aggressively expanding its data center capacity, potentially creating new revenue streams from cloud infrastructure.
Targeted ETFs such as AIY and NCLD provide investors with concentrated exposure to hyperscalers and emerging neo-cloud companies.
Legacy SaaS companies are struggling in the current environment, a trend referred to as the 'SaaS-pocalypse.'
Cloudflare is positioned to profit from the massive increase in non-human AI agent traffic and new AI-based payment systems.
Palantir shows strong revenue growth and order backlog, though rising competition will likely cap its valuation multiples.

Ideas

Seo Young-jae Manager, NH Investment & Securities 14:05

Cloud providers benefit from AI model competition.

Cloud providers, particularly hyperscalers like Microsoft and Amazon, are poised to benefit from the intense competition between AI model developers like OpenAI and Anthropic. By utilizing open-weight models, these cloud companies can reduce the fees they pay to model creators, thereby increasing their own margins. Furthermore, GPU rental prices are rising due to a clear shortage, and their massive capex investments are well-covered by strong cash flows and quick payback periods.

Seo Young-jae Manager, NH Investment & Securities 21:39

Meta's massive data center expansion offers upside.

Meta is aggressively expanding its data center capacity, planning to add 12.5GW over the next year and a half. Since Meta has not traditionally operated as a public cloud provider, successfully monetizing this massive new infrastructure capacity could add significant new revenue streams to the company.

Cha Jin-ho Director 25:47

AIY ETF offers concentrated hyperscaler exposure.

For investors wanting concentrated exposure to hyperscalers without picking individual stocks, the Defiance AI Hyperscaler Leader ETF (AIY) is a strong option. It focuses purely on companies generating significant revenue from AI infrastructure and foundation models, holding top weights in Microsoft, Amazon, Alphabet, and Meta.

Cha Jin-ho Director 37:55

NCLD ETF provides pure-play neo-cloud exposure.

The Roundhill Neo Cloud ETF (NCLD) provides pure-play exposure to 'neo-cloud' companies like CoreWeave and Iris Energy. These are new entrants aggressively building data centers to address the massive structural shortage in AI compute, offering a more targeted infrastructure play than broad tech ETFs.

Seo Young-jae Manager, NH Investment & Securities 44:09

Avoid legacy software companies in AI era.

Legacy software companies like ServiceNow and Salesforce are struggling in the AI era, suffering from a phenomenon dubbed the 'SaaS-pocalypse.' Investors should avoid these legacy names and instead focus on cybersecurity or AI-native software companies that are actively benefiting from new AI trends.

Seo Young-jae Manager, NH Investment & Securities 45:37

Cloudflare benefits from exploding AI bot traffic.

Cloudflare is thriving as an AI beneficiary due to the explosion of non-human (bot) traffic driven by Agentic AI, which has already surpassed human traffic and is increasing demand for Cloudflare's security services. Additionally, its new AI-based payment support service could become a massive revenue driver by taking a fee on AI-driven transactions.

Seo Young-jae Manager, NH Investment & Securities 50:23

Palantir offers strong growth despite rising competition.

Palantir's revenue growth and order backlog are accelerating strongly, and its EV/EBITDA multiple has compressed from 200x to around 60x, making it relatively more attractive. While the stock can continue to rise based on strong earnings growth, investors should not expect multiple expansion due to rising competition from Anthropic, Mistral, and big tech entering the space.

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