The next phase of the AI trade is more about growth and survival than simply chasing the most coveted names.
“I definitely wouldn’t just bet on Nvidia,” Adam Coons, chief investment officer at Winthrop Capital Management, told Yahoo Finance’s Opening Bid. “We kind of like to barbell this with something like the big hyperscaler, like an Alphabet Google, because that’s really the type of name that you could probably have a little bit more comfort in because the AI story is just benefitting an already existing business model that was doing well.”
The “barbell” strategy is born out of a growing skepticism toward “one-trick ponies.” In this case, Coons says it applies to companies like Nvidia (NVDA), CoreWeave (CRWV), and Palantir (PLTR), which rely almost exclusively on the current AI hardware rush.
While these names have led the market higher, their valuations have reached a point where “margin of safety” is effectively zero. In Coons’s view, when a stock is priced to perfection, even a minor earnings miss can trigger a catastrophe.
“You need to position size,” he said.
By anchoring a portfolio in “behemoth hyperscalers” like Alphabet (GOOG) and Microsoft (MSFT), investors get exposure to AI through companies with diversified cash flows. Such companies aren’t just AI plays, but are advertising and software giants that use AI to optimize businesses that were already succeeding.
If the “safe” end of the barbell is Big Tech, the other side is “growth,” and it can be found in the infrastructure required to keep those systems running and secure.
“Down the chain, we like the things that overall the AI story will help prop up,” Coons said. “For us, it’s cybersecurity [as it] becomes more and more important.”
He added that Fortinet (FTNT) and CrowdStrike (CRWD) are among “two of our top picks on the security side.”
As AI advances, so does the risk for hacking, Coons noted. Cybersecurity isn’t a discretionary expense, but a tax on the digital age that must be paid. Unlike the volatile demand for graphics processing units, the need for protection is more predictable.
The sector isn’t without its risks, however. CrowdStrike faced a global IT outage in July 2024, caused by a faulty software update. It prompted the “blue screens of death” across 8.5 million machines, including airlines, hospitals, and banks.
Coons says the final piece of the 2026 investor blueprint is disciplined position sizing. He suggests building a “basket” of smaller, high-conviction names — like Reddit (RDDT), which he views as a unique data play for AI training — but with the caveat of keeping those positions small.
