Beyond the Headlines: This "AI Moat" Will Drive These Dominators

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What’s Happening: Artificial intelligence companies like OpenAI are investing heavily in data centers and infrastructure, with projected spending reaching into the hundreds of billions annually. Consultant Bain & Co.’s latest Global Technology Report warns that, by 2030, AI firms will need $2 trillion in annual revenue to sustain this growth but are likely to fall $800 billion short. Despite surging demand for AI services like ChatGPT, revenue is still lagging infrastructure investments.

Why It Matters: Anyone who warns of a brewing “AI Bubble” is oversimplifying a complex and transformative technology. AI is already delivering real productivity gains, reshaping industries, and attracting a flood of money from governments, companies, and private equity. So the issue isn’t whether AI is valuable, because it is. It’s identifying which companies will capture that value.

The Opportunity: Within our storyline of the Artificial Intelligence Era, you’ll see cash-rich Big Tech firms funnel that money into the infrastructure that fuels more innovation. You’ll see software companies win by deploying AI agents that automate everything from customer service to coding. You’ll see energy companies win by powering the data centers that make it all possible. And you’ll see outside investors like private equity win by building and profiting from the backbone that makes AI “go.” Viewed this way, we’re following the companies with an “AI moat.”

What’s Happening: Despite owning two of the most iconic franchises in professional sports — basketball’s New York Knicks and hockey’s Rangers — Madison Square Garden Sports $MSGS ( ▼ 0.85% )  trades at a steep discount to its estimated intrinsic value. Recent blockbusters like the June Lakers deal that valued the Los Angeles NBA team at $10 billion highlight the disparity, with MSGS valued at just $5.3 billion. The so-called “Dolan discount” is based on CEO James Dolan’s refusal to sell, which dampens investor sentiment.

Why It Matters: We’ve been tracking Madison Square Garden Sports since November, with our most recent update in March.

Sports business is booming. But MSG doesn’t cater to shareholders as it doesn’t pay dividends or buy back stock. And its recent financial results have underwhelmed. Still, Jon Boyar, president of the research and investment advisor firm Boyar Value Group, believes the shares are worth $400. That’s 73% above where they’re trading right now. Back in June, Boyar even published an open letter, urging Dolan to sell or spin off the Knicks and Rangers.

Investable Opportunity: MSG Sports offers a rare deep-value play in the sports sector, with multiple potential catalysts: a minority stake offering, a spin-off of the Knicks or Rangers, or even a private sale. It’ll likely demand patience. But for investors who believe outside pressure will eventually trigger one of these transactions, MSGS is compelling. For our SPC Premium members, we have an iconic sports franchise in our Model Portfolio that we like even more that we believe is in a “when” and not “if” situation for being sold, which can send the share price higher. In fact, the owner of this team said “the store is always open” when asked if the team was for sale. Here’s our full, member’s-only Dossier on the company.

What’s Happening: With grocery prices climbing and ground beef hitting record highs, budget-conscious families are turning to Hamburger Helper to stretch meals affordably. Sales of the boxed pasta mix have surged 14.5% in 2025 alone. Eagle Foods, which acquired the brand in 2022, has modernized its offerings while keeping prices low, giving the product new relevance by offering consumers some help in a clearly tightening economy.

Why It Matters: As inflation persists and job growth stalls, more people are searching for low-cost grocery items. We’re simply in a world where family essentials cost more than we remember. But those days of lower prices will never return. Income growth has effectively stalled. And so have new job openings. And while inflation has slowed, that just means prices are still rising … just not as quickly as before. With raises or job hopping no longer a path to bigger paychecks, generating additional income to offset these higher prices should be a part of every investing game plan.

Investable Opportunity: When researching income stocks, Chief Stock Picker Bill Patalon says to focus on “real income.” It’s what’s actually left after taking taxes and inflation into account. But also keep in mind that, when a yield seems too good to be true, it normally is and is not sustainable. 

Here are three questions to ask before making any income investment.

1. Is the dividend sustainable?

High yields can be a red flag if the company is paying out more than it earns. Check the payout ratio and whether the company has a history of maintaining or growing dividends even during downturns.

2. What’s driving the yield — strong fundamentals or a falling stock price?

Sometimes a high yield is the result of a declining share price, which could signal deeper issues like poor earnings or weak guidance. Make sure the yield isn’t hiding unnecessary risk.

3. Does the company have long-term growth potential?

Dividends are great, but they’re just one part of the return. Ask whether the company is reinvesting in innovation, expanding its market or improving margins. A stagnant business with a high yield might not be worth the risk.

You can also find out more about income investing in our latest release on Amazon, Wealth Builder/Wealth Killer.

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That’s it for this issue.

Take care,