Asit Sharma

Now, speaking of concentrations, another personal rule, when I'm assessing ecosystem players, I try not to shy away from customer concentrations for very specialized suppliers.

It sounds counterintuitive.

Why would you buy a company that only has a few businesses, even though there are gigantic businesses, as customers?

Well, there's an example

in a business like Arista Networks, symbol ANET, which for a long time was highly concentrated in those cloud hyperscalers like Amazon and Microsoft.

But it grew well over the years, and it's a little more diversified now.

You're going to see this time and again in this infrastructure because supply chains are limited and specialists abound.

There are fewer players that have enough skill and technology to serve everyone, so their supply is getting snapped up by just a few players.

But I position size accordingly because there are so many concentrations.

If I enter a new position of a company that I've been interested in, it comes in somewhere at 0.5% or 0.1% of my total portfolio, even sometimes a little bit less.

And then finally, personal rule for this year, drill down into sectors and industries that are outside of my own core expertise.

Look at last year, Emily.

Construction companies with expertise in building these complex mechanical, electrical, and plumbing systems for data centers, they just had a stellar year.

It was outside of my wheelhouse.

I really didn't pay attention until it was a bit too late.

But I learned the lesson.

The breadth of the AI trade and the opportunity, both are very wide, but you have to be willing to turn over some new stones to benefit in 2026 and beyond.

Hello, Fools.

I'm Asit Sharma, Senior Analyst and Lead Advisor at The Motley Fool.

My guest today is Leandro Cuccioli.