It is tempting to assume that the artificial intelligence revolution is already mature. The headlines, the soaring valuations, and the breathless commentary all suggest that the transformation has largely run its course. The reality is the opposite. We have witnessed only the first part of a buildout that will unfold over the better part of a decade. By any reasonable measure, this is the third inning of a long game, not the seventh-inning stretch.
The numbers underscore how early we still are. In the United States, fewer than five percent of companies have meaningfully gone down the AI path. Across Asia excluding China, the figure is below two percent. Europe is, frankly, almost nowhere. The Middle East and India are only just beginning to build out their capabilities. When so little of the global economy has actually adopted these technologies, the notion that the opportunity is exhausted simply does not hold. My view is that this represents roughly four trillion dollars of spending over the coming years, and that the broader market still has substantial room to run.
The Multiplier Effect Beyond the Chip
The most important structural insight about this buildout is that the spending does not stop at the silicon. For every dollar spent on a leading-edge AI chip, there is an estimated tenfold multiplier across the rest of the technology stack. This is why the second, third, and fourth derivatives of the AI trade matter so much: infrastructure, software, power, and energy all stand to benefit from the cascade of capital flowing through the system. The chipmakers capture attention, but the ripple effects reach far wider and last far longer.
This requires an enormous expansion of raw capacity. Meeting projected demand implies roughly a tenfold increase in computing power by 2030. That kind of scaling does not happen quietly or quickly; it demands sustained investment across an entire ecosystem of suppliers, builders, and operators.
The Data Layer Is the New Oil
If there is a single thread that ties together the most compelling stories in technology today, it is the rise of the data layer as the locus of monetization. We have watched this play out repeatedly—first with one analytics platform, then with another, and now with the data warehousing leaders. The lesson is consistent: value is no longer captured solely at the level of chips. It has migrated to the data layer itself.
Data warehousing and the data infrastructure that surrounds it have become the new oil, the new gold. This is the genuine moat for the companies that own it. There is a persistent fear haunting the software sector—call it the "AI ghost trade"—that the large foundation-model companies will simply crush every existing software firm, disintermediating them out of existence. Some companies will indeed be disintermediated, and we are already seeing fragments of that play out. But firms with deep data infrastructure and an entrenched installed base are positioned to defend their territory. Their data is the moat, and that moat is what allows their valuations to keep climbing.
This explains why a company once treated as the "Rodney Dangerfield of software"—getting no respect despite strong fundamentals—deserves a higher price target. Its AI strategy and the durability of its moat justify confidence. The same logic applies to the broader cohort: the analytics platforms, the observability players, and ultimately the legacy database giants whose moat will be defined by the data they hold.
Software Monetization Comes of Age
For years, the great anxiety hanging over enterprise software was the so-called "SaaS apocalypse"—the worry that subscription software businesses would be hollowed out by AI. The poster child for that fear was the dominant customer-relationship-management vendor, which arguably arrived late to the game in a partly self-inflicted way. But the picture is now changing.
With a base of roughly 150,000 customers, that company's agentic products represent a genuine opportunity. What began as a business already generating over a billion dollars in revenue could grow to represent eight to ten percent of total revenues within the next six to nine months. That trajectory would mark a meaningful step in the right direction and become a major driver of the overall story. The key takeaway from the recent earnings season was precisely this: monetization is now happening on the software layer, not merely at the level of chips. Agentic products are beginning to translate into real, organic revenue growth.
The same patience applies to platforms whose use cases are only beginning to monetize. It is easy to get caught up in the ebbs and flows of any single quarter and, in doing so, miss the deeper shift happening underneath. One leading data-analytics company, for instance, has a credible path toward a trillion-dollar market capitalization in the coming years, even though its monetization story is only getting started.
Turning Around the Cruise Ship
Not every transformation is fast or linear. Consider the legacy technology giant now reorienting itself around AI, quantum computing, and cybersecurity. Recent quantum-computing news has put it back on investors' radar, and its strategy supports an ambitious price target. The honest framing is that turning around a company of this size is like steering a cruise ship in a river. Certain legacy segments are declining and remain under genuine pressure. But the growth areas—AI and quantum—are the heart of the re-rating story, and they are why a sprawling incumbent can still be seen as a formidable tech player.
Separating the CapEx Spenders From the Monetizers
The central question investors keep asking is whether the enormous capital expenditure on AI is producing a commensurate return. The answer varies sharply from company to company, and the divergence is becoming the key to the entire trade.
Among the large platforms, the search-and-advertising leader is clearly monetizing effectively and has been rewarded accordingly. The dominant cloud-and-commerce company is another where monetization is plainly arriving, and the payoff from its capital spending is starting to show. Two names stand out as potential "comeback kids" for the second half of the year: the enterprise-software-and-cloud giant and the legacy database leader. Both appear oversold relative to the monetization that is beginning to materialize.
Then there are the companies still sitting in the penalty box precisely because they are spending heavily without yet showing the returns. The social-media conglomerate is the clearest example. A subpar quarter relative to monetization landed it there, even as its subscription service marked a step in the right direction. With three and a half billion users, the monetization opportunity is real; it will simply take longer to realize. The strategic steps being taken are the right ones, and it would be a mistake to conclude the company cannot eventually monetize its vast user base.
The consumer-hardware giant occupies a different but related position. Its path is to become, in effect, a toll collector on the AI highway—monetizing the traffic that flows across its platform rather than racing to build foundational models itself. Different companies will convert AI investment into profit at different speeds, but the direction of travel is consistent.
Cybersecurity: The Overlooked Tailwind
One sector deserves particular attention because the market continues to underestimate it. Cybersecurity is poised to be among the great beneficiaries of the AI era. As AI proliferates, the attack surface expands dramatically, and security budgets could plausibly double over the next few years.
The leading endpoint-security firm and the data-analytics platform with security applications are incrementally well positioned to capture this expanding market, and investors are still underestimating how large the opportunity will become. Even names that have recently taken a hard hit deserve a second look. One cloud-security company saw its stock fall roughly thirty percent in a single week after a disappointing quarter and guidance. Yet that punishment looks overdone relative to the underlying numbers. A weak quarter is not grounds to throw the stock away; this is a company likely to remain among the core winners in cybersecurity, even if not at the very top tier. Very little of that durable potential appears to be priced in.
The Dancing Partners of the AI Arms Race
A defining feature of this next phase is the proliferation of strategic tie-ups and partnerships. The dynamic resembles nothing so much as an eighth-grade prom: everyone is looking for a dancing partner. But this scramble is not frivolous—it is exactly what the AI arms race demands, whether the prize is GPU access, raw capacity, or technology.
A potential alliance between a data-warehousing leader and a major cloud provider could be a genuine game-changer, and it exemplifies the smart strategic moves now reshaping the landscape. The aggressive maneuvering of the leading chipmakers reflects the same imperative. New infrastructure providers stand to be direct beneficiaries of this wave. Everyone is trying to identify who the ultimate winners will be, because there will assuredly be losers as well. The unifying truth is that these companies cannot afford to wait. They need to plant their stakes in the ground now.
Conclusion
The temptation to declare the AI story finished is understandable but premature. With adoption rates still in the low single digits across most of the world, a multi-trillion-dollar spending wave ahead, and the locus of value shifting from chips to the data layer and the software built on top of it, the runway is long. The popcorn, as the saying goes, is worth getting out—because this is only the beginning of the buildout. The winners will be those who own the data, monetize their software, defend an expanding security perimeter, and move decisively while the game is still in its early innings.