3 Stocks to Buy as the AI Trade Sputters

The article argues that AI investment may split into infrastructure “Builders” and companies that apply or benefit from AI, highlighting Booking Holdings, Petco and Transocean as potential beneficiaries while warning about Oracle’s debt-funded AI buildout. Booking shares are down 25% since September, with the author estimating value of at least $200 per share and up to $220 in a bull case; Petco is down 33% in a year and 78% since ChatGPT launched, while projected EPS is $0.23 this year, up 20%. Goldman Sachs estimates 40% of 2026 data-center projects could be delayed into 2027 because of electricity shortages; Transocean revenue rose 40% over two years and its shares are up 12% since the author’s September 27 recommendation. These are the article author’s investment views and cited estimates, not reported market-wide developments.

Analysis

The “builder vs. applier” frame is too binary: applications still consume compute, while infrastructure scarcity can raise the value of scarce capacity rather than strand it. The more useful distinction is who can earn returns on incremental AI spend—and who bears financing, power, and utilization risk. The article’s promotional framing and unverified forecasts are not an investment case; verify reported results and contracts before acting.

BKNG’s potential edge is less chatbot resistance than control of inventory, payments, and transaction servicing. But if AI assistants own customer discovery, they could commoditize referrals and pressure commission economics even while routing bookings to Booking.com. Watch room-night growth, marketing cost per booking, and gross bookings—not AI feature announcements. GOOG and OpenAI could be partners today and bargaining-power threats later.

WOOF’s services offer some insulation from price comparison, but high leverage makes execution and free-cash-flow conversion decisive. Claimed EPS growth does not itself establish debt-paydown capacity; validate cash generation, interest burden, and net debt. CHWY is not automatically the loser: scale and fulfillment could make it a stronger AI-enabled competitor.

RIG is an offshore-cycle exposure, not a direct AI-power trade. Data-center power constraints may support longer-run demand for firm generation, but do not ensure near-term offshore drilling contracts; oil prices, operator budgets, utilization, and financing matter more. ORCL’s financing and customer-concentration risks warrant monitoring, not a short based on this article alone. Near term, sentiment may dominate; over 1–3 months, earnings and contract economics matter; over 6–18 months, application monetization and infrastructure returns should separate winners.

Key Decisions for Investors

• Prefer a staged BKNG long over a broad “AI applier” basket; add only if booking growth and marketing efficiency hold through results. Reassess if room-night growth weakens or acquisition costs rise faster than bookings. A relative position versus Expedia Group is a watch item, not a clean hedge, until valuation and growth are compared.
• Avoid initiating WOOF on projected EPS alone. Require evidence of positive free cash flow, lower net debt, and improving service economics; otherwise leverage can overwhelm any AI-driven operating gains. Track refinancing terms and cash conversion as falsifiers.
• Do not buy RIG as an AI-power proxy. Consider exposure only on evidence of improving offshore dayrates, utilization, and contracted backlog alongside supportive oil prices; contract delays or weaker operator capex would invalidate the thesis.
• Keep ORCL risk selective rather than treating the article’s claims as established. Monitor financing costs, customer concentration, and cash collection against AI-related investment; deterioration could support a defined-risk bearish position, while firm returns and funding access would weaken it.