A Motley Fool column published on 14 September argues that a $5,000 AI allocation should be split across three layers of the build-out rather than concentrated in a single name. The piece assigns the largest weight to Amazon, a middle slice to Taiwan Semiconductor, and a small speculative position to Applied Digital, citing revenue acceleration at the cloud and foundry levels and a large contracted backlog at the data center builder.
AWS growth accelerates profitably
Amazon Web Services revenue rose 37 percent year over year in the second quarter to $42.2 billion, the segment’s fastest pace in 18 quarters, and operating income climbed roughly 64 percent to $16.6 billion. The cloud unit still accounts for only about a fifth of Amazon’s total revenue, with retail and advertising providing the remainder. Free cash flow was negative $7.6 billion over the trailing twelve months, driven by AI infrastructure spending that the column notes flows directly to the other two holdings. Shares trade at about 24 times next year’s forecast earnings.
Foundry revenue hits monthly record
Taiwan Semiconductor posted 36 percent year-over-year growth in the second quarter, 45 percent in July, and 53 percent in August to a monthly record of NT$514.8 billion, or roughly $16 billion. Revenue for the first eight months of 2026 runs 39 percent ahead of the same period last year, with a second-quarter gross margin of 67.7 percent. At roughly $431 the stock fetches about 20 times expected earnings, a discount to Amazon that the column attributes to geographic concentration and direct exposure to AI capex cycles.
Data center backlog dwarfs current revenue
Applied Digital has signed 15-year leases covering roughly 1.4 gigawatts of capacity valued at about $36 billion in future rent, yet only 175 megawatts were live as of the late July report. Fiscal 2026 revenue stands at $611 million, leaving a wide gap between contracted backlog and recognized sales that the column frames as both the investment case and the primary risk. The position is sized as the smallest of the three for that reason.
Valuation spread reflects risk gradient
The basket’s pricing runs from Amazon at 24 times forward earnings through TSMC at 20 times to Applied Digital, which lacks a comparable multiple given its pre-revenue scale relative to commitments. The column’s logic is that the cloud operator’s diversified cash flows anchor the portfolio, the foundry captures chip demand regardless of designer, and the builder offers optionality on the physical layer, provided the leases convert to revenue before capital needs outpace funding.