--- title: "‘Big Short’ Investor Steve Eisman Says Forget the AI Hype — These 6 ‘Picks and Shovels’ Stocks Could Be the Real Winners" type: "News" locale: "en" url: "https://longbridge.com/en/news/300929869.md" description: "Investor Steve Eisman advocates for 'picks and shovels' AI infrastructure stocks like NVDA, MU, and GEV over LLM developers or cloud hyperscalers, citing lack of moats and depleted cash flows in the latter. He highlights concentration risks, noting heavy reliance on few customers and money-losing AI firms like OpenAI, warning that their failure could trigger a US recession." datetime: "2026-10-05T12:04:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/300929869.md) - [en](https://longbridge.com/en/news/300929869.md) - [zh-HK](https://longbridge.com/zh-HK/news/300929869.md) generator: "portal-rs" --- # ‘Big Short’ Investor Steve Eisman Says Forget the AI Hype — These 6 ‘Picks and Shovels’ Stocks Could Be the Real Winners The ‘Big Short’ investor **Steve Eisman** revealed his top AI picks in a podcast with **Brandon van der Kolk**, stating that he favors “picks and shovels” infrastructure companies over direct investments in large language models or cloud hyperscalers. ## **Focus on Infrastructure** Eisman explained that he avoids investing directly in large language model (LLM) developers due to an absence of long-term competitive moats. “I wouldn’t invest in an LLM because I just think, as I said, there’s no moats,” Eisman said. He noted that users switch freely between competing models without staying locked into a single provider. He also expressed caution regarding cloud hyperscalers spending heavily on data centers. Eisman stated that capital expenditure has eliminated free cash flows across major technology firms, pointing to **Alphabet Inc.** (NASDAQ:GOOG) (NASDAQ:GOOGL). Raising $85 billion in equity. “Today, because of the incredible amount of money that they’re spending on these data centers, their cash flow is gone,” Eisman said. **Read Also: 5 Stock Picks Last Week From Wall Street's Most Accurate Analysts** ## **Key “Picks and Shovels” Selections** Instead of software developers or cloud platforms, Eisman stated that investors should target suppliers receiving those capital expenditures. He highlighted **Nvidia Corp.** (NASDAQ:NVDA), **Micron Technology Inc.** (NASDAQ:MU), **GE Vernova Inc.** (NYSE:GEV), **Arista Networks Inc.** (NYSE:ANET), **Cisco Systems Inc.** (NASDAQ:CSCO), and **Eaton Corp.** (NYSE:ETN). “I would be looking at the companies that are getting that cash flow,” Eisman said, describing the strategy as focusing on “picks and shovels” over the “flashy software side.” He identified Eaton for industrial electrification and GE Vernova for power generation hardware. ## **Sector Concentration and Financial Risks** Eisman cautioned that a “massive concentration risk” affects the entire sector. He noted that 70% of Nvidia’s accounts receivable come from five customers, while 70% of hyperscaler AI revenue stems from Anthropic and OpenAI. Eisman stated that both Anthropic and OpenAI “bleed money” to fund growth, leaving the supply chain vulnerable. “If they don’t grow and have the money to pay for those commitments, well then the whole chain slows,” Eisman said, warning that a failure by OpenAI could cause the “United States of America would go into a recession overnight.” ## **How Have These Stocks Performed?** **Stocks** **1-Month** **6-Months** **YTD** **1-Year** **5-Years** NVDA 4.25% 31.88% 35.44% 23.86% 1027.90% MU 12.43% 193.49% 276.61% 484.97% 1414.14% GEV 7.24% 10.03% 51.28% 63.90% 759.74% ANET 11.42% 63.68% 58.25% 43.53% 846.59% CSCO 2.50% 41.99% 45.66% 64.25% 103.48% ETN 11.58% 20.77% 36.92% 15.75% 189.49% **Read Also: S&P 500 Analyst Optimism Reaches 'Highest Level on Record,' Leaving 'Less Room' for Market Upside, Says Charlie Bilello** ***Disclaimer:*** *This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.* *Image Via Shutterstock* ### Related Stocks - [ANET.US](https://longbridge.com/en/quote/ANET.US.md) - [CSCO.US](https://longbridge.com/en/quote/CSCO.US.md) - [ETN.US](https://longbridge.com/en/quote/ETN.US.md) - [GEV.US](https://longbridge.com/en/quote/GEV.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [ANEL.US](https://longbridge.com/en/quote/ANEL.US.md) - [ANV.US](https://longbridge.com/en/quote/ANV.US.md) - [CSCL.US](https://longbridge.com/en/quote/CSCL.US.md) - [CSCS.US](https://longbridge.com/en/quote/CSCS.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [GEVC.US](https://longbridge.com/en/quote/GEVC.US.md) - [GEVG.US](https://longbridge.com/en/quote/GEVG.US.md) - [GEVX.US](https://longbridge.com/en/quote/GEVX.US.md) - [MUD.US](https://longbridge.com/en/quote/MUD.US.md) - [MULL.US](https://longbridge.com/en/quote/MULL.US.md) - [MUU.US](https://longbridge.com/en/quote/MUU.US.md) - [MUZ.US](https://longbridge.com/en/quote/MUZ.US.md) - [NVC.US](https://longbridge.com/en/quote/NVC.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVIB.US](https://longbridge.com/en/quote/NVIB.US.md) - [NVII.US](https://longbridge.com/en/quote/NVII.US.md) - [NVIT.US](https://longbridge.com/en/quote/NVIT.US.md) - [NVW.US](https://longbridge.com/en/quote/NVW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) ## Related News & Research - [Nvidia's 'Very Undemanding Valuation' Helps Win Back Top Chip Pick From Leading Analyst](https://longbridge.com/en/news/300801615.md) - [FOCUS-Nvidia's bet that its chips can finance the AI boom gets a Wall Street reality check](https://longbridge.com/en/news/300667583.md) - [NVIDIA DGX Spark 64GB Gives Developers More Ways to Build and Scale Local AI](https://longbridge.com/en/news/300795472.md) - [Microsoft plays the Windows card in the AI game, with help from Nvidia](https://longbridge.com/en/news/301181889.md) - [Microsoft to sell $2,599 Surface Laptop Ultra containing Nvidia AI chip](https://longbridge.com/en/news/301176162.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**