The Third Wave of the AI Boom — and the Silent Losers No One Talks About

Everyone is hunting for "the next one"

The mood in the market right now is simple: everyone is searching for the one stock that turns $10,000 into a million. Mention an AI name and you can watch people lean in. Yet there's a truth about actually getting rich from this that almost no one talks about — and that's what I want to walk through today.

Start with one premise. A lot of people think they've already missed the AI boom. Others are on the opposite side, convinced we're only in the second inning of a nine-inning game. I lean toward the latter. The technology is still developing, and different corners of the AI world keep taking turns exploding.

Think of AI as building a city

The flow of AI investing is easiest to understand as building a giant city. First you need the foundation and the raw materials. In AI, that was the hardware and the chips — companies like Nvidia making the powerful processors AI runs on. That was the first wave, and it made a lot of investors very wealthy.

Then the excitement moved to memory: the chips that store the information AI needs to work. Micron ran up huge; SanDisk ran up huge. That was the second wave.

And now a lot of smart people believe the next stage is data and software — the companies that take all that raw compute and turn it into useful tools businesses actually pay for. That's why names like Palantir, CrowdStrike, and Snowflake keep coming up: big, dominant businesses sitting on the next wave.

A signal even the government is sending

There's one more thing fueling all of this: the government is getting deeply involved in AI. There's discussion of the U.S. potentially taking ownership stakes in AI companies like OpenAI, the same way it took a stake in Intel and other chip names. President Trump even said it could become, in his words, "almost a partnership with America public." When a government starts treating an industry as critical to the country's future, that tells you how big it's expected to become.

What's already happened is what excites everyone

To understand the fever, just look at what's already occurred — the numbers are genuinely jaw-dropping.

Take Intel: from around $17 a share to about $132 in roughly a year. Put $10,000 in at the low and you'd have around $77,000. Micron, the memory company, went from around $65 to over $1,050 — turning $10,000 into roughly $160,000.

And the wildest one, the quantum-and-AI name Rigetti: from about $0.70 a share to as high as $55. Ten thousand dollars at the bottom would have become around $785,000 — from $10,000 to nearly a million in a very short window.

Stories like that are everywhere right now, and they create a powerful feeling. People look at those numbers and think: if I can just find the next Rigetti, the next Micron, one stock changes my whole life. That feeling is exactly where a lot of people get hurt.

The video no one ever posts

This is where I have to be blunt. For every person who picks one AI stock that goes up 10x, there are dozens or hundreds who pick several that go way down. We only ever hear the success stories. Nobody posts about the AI stock that fell 80% and never came back.

Rigetti itself is down more than 65% from its high over the past year. The winning is loud; the losses are quiet. That leaves everyone with a dangerously incomplete picture of how hard this actually is. Picking individual winners in a hot, hyped-up industry is one of the hardest things to do in all of investing — even professionals get it wrong constantly.

What 1999 left us

History is very clear here. The internet changed the world. So did computers, cars, airplanes, and TVs. But the people who bought those companies at the height of the craze mostly lost a lot of money. We know what happened in the 1999 dot-com bubble. They were right about the technology.

We're probably right about AI too. It's already changing the world and will likely get better than we expect. But being right about AI does not protect you if you overpay for the stock.

The outlook: how not to become a silent loser

So what I want to leave you with isn't a ticker. The biggest mistake people make in a boom like this is buying a great company at any price simply because it's part of an exciting story. A great company at the wrong price becomes a bad investment.

And remember the silent losers. For every AI stock that turns $10,000 into a million, several quietly collapse. You can't build a strategy around hoping to be the lucky one. Wealth comes from understanding what a business is worth and refusing to pay more than that. It isn't as thrilling as chasing the next rocket — but it's how people actually keep the money they make instead of handing it all back when the hype fades.

If you want to see how I put an individual name through this test, read my breakdown of Palantir at 130x cash flow.

FAQ

Q: Is the AI boom already over? A: In my view we're still early. The wave has moved from chips to memory to data and software, and leadership keeps rotating with each phase. But "there's room left" and "buy anything at any price now" are two very different statements.

Q: Shouldn't I aim for a 10x like Rigetti? A: You can try, but don't build a strategy on it. Behind every 10x sit dozens or hundreds of names that quietly disappeared, and we rarely hear about those losses. Betting your life on a lottery ticket is not the same as understanding a business before you buy it.

Q: So are you saying don't invest in AI? A: Not at all — I agree AI is changing the world. The point isn't the right technology, it's the right price. The discipline is estimating a business's intrinsic value and only buying when there's a real margin of safety.