• Gavin Baker of Atreides Management says the strategy of seeking out AI bottlenecks is getting less effective.

• Investors could previously see big gains buying stock in the sectors making these products.

• But now the market is shifting towards rewarding companies that can show enduring franchise value.

For much of the AI trade’s epic run, a winning strategy for investors involved locating bottlenecks.

As hyperscalers rushed to build out AI infrastructure, there was a premium placed on the components needed. The stocks of companies who made these products saw big runs up, especially if there was a supply shortage.

But Gavin Baker, CIO of Atreides Management, says this strategy is starting to give way to a new mode of…