The #1 Backdoor AI Play Ready To Outperform Big Tech
Steven Cress joins Nicole Benjamin on The Weekly Grade to reveal how smaller, mid-cap semiconductor suppliers are capturing massive revenue growth from the AI capex boom. Discover how Alpha Picks spots under-the-radar supply chain leaders before the broader market catches on.
Jul. 28, 2026 10:01 AM ET
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This video's transcript was generated by a third party. It is not curated or reviewed and is provided for convenience and information purposes only. The accuracy and completeness of the transcript are not guaranteed.
Nicole Benjamin: Hey everybody. It's Nicole Benjamin, your host here at Seeking Alpha to bring to you another episode of The Weekly Grade with Steven Cress, where we're bringing to you market insights in minutes. Now, for today's episode, I am joined by none other than Steven Cress himself, VP of Quantitative Strategy here at Seeking Alpha. Steve, thank you so much for joining us today.
Steven Cress: Thank you so much for organizing it. I appreciate being here.
NB: Absolutely. Now, for everybody that's listening in, Steven Cress, VP of Quantitative Strategy, he is the amazing guy behind a lot of the products that we have here on-site, our Alpha Picks Portfolio, our PRO Quant Portfolio, and our newest portfolio, the Quant Growth & Income Portfolio. So, if any of those sound like something you might be interested in, take a look and also hit the follow button on Steve's profile.
Now, Steve, I want to jump right in here and get to talking about what we have here going on with Ichor Holdings. Now, we know that NVIDIA is going to always be that high profile that takes up all the headlines. But with something like Ichor Holdings, precision subsystems, and advanced packaging, and high bandwidth memory, positioning this company to capture the massive AI CapEx boom, like, what's going on there?
SC: Alright. So, they are a benefactor of a lot of semiconductor companies, including NVIDIA. It is a much smaller company than NVIDIA. Its market cap is just a tad over, I think, $3 billion. So, NVIDIA completely dwarfs it, but it is a company that services, also designs and manufactures a lot of the supplies used by companies like NVIDIA. So, as there's tremendous CapEx spending on the part of the hyperscalers and the very large semiconductor companies, there's a lot of smaller companies that are benefiting. And it's really cool because it's not like a situation where when we had the tech bubble in 1999 and 2000, 2001, where many of the Internet companies actually did not have revenues, did not have earnings. This is not the case this time around.
A company like Ichor definitely has revenue, definitely has earnings, and they're growing at a very fast pace. So, what's really cool about our platform is that we cover about 5,000 stocks, and we also break it down by sector and industry. So, you can really look within an industry, and you think NVIDIA would be the number one company or AMD or Intel, but you'll find a lot of smaller companies that are generating an enormous amount of cash, and in many cases have a better valuation framework and stronger growth than some of the larger companies.
NB: Alright. Well, speaking of Ichor and being a benefactor of NVIDIA and so on and so forth, I see that Ichor Holdings is rated a Strong Buy, and it's a fresh pick for the July Alpha Picks. So, how does this long term growth profile offset its profitability grade to maintain such a high quantitative score?
SC: Yeah. Now, that's a great question, especially as a smaller company. A lot of times when they're growing at a very fast pace and they have to reinvest in themselves and have their own CapEx needs. It's, sort of you lose out on the profitability side. So, the earnings are growing fast, but as they need to make sure that they have sustainability and that they can ensure their growth, sometimes the profit of the company is not as high as a more well-seasoned company that's been around for a long time. So, what we eventually find with companies like this is that that profitability grade improves as the company generates more cash.
NB: Alright. Now, speaking of Ichor Holdings and it being a part of Alpha Picks, we see that Alpha Picks Portfolio is continuing to deliver massive cumulative returns, since its inception. So, breaking that down further, this quantitative model, how does it spot these under the radar supply chain winners before the broader market has caught on?
SC: Yeah. Often, we'll have companies that'll be recommended in Alpha Picks that a lot of investors don't even know. And then there's similar stocks to Ichor where the market caps are typically mid-market cap companies, sometimes even small market cap companies, and Alpha Picks does a great job of highlighting it. So, within our Quant System, we look for companies that are collectively strong on value, profitability, growth, EPS revisions, and momentum. Those are five core investment characteristics, and we rank all companies based on how those ratings come out for those investment characteristics, those factor grades.
And this way, we have the ability to look at the strong companies versus the weak companies because our analysis is all relative when we look at underlying metrics or cash flow or income statements or balance sheets where for each company, we're comparing it to other companies in the sector. So, what we do with Alpha Picks is, we say, okay, for this month, what are our two favorite Quant stocks? And often, many of those stocks come into the Alpha Picks Portfolio, and a lot of investors aren't even familiar with their names, but they really do grow over time.
NB: Alright. Well, I think I'm going to wrap things up there. Thank you so much, Steve, for joining us today. And for everybody that's listening in, look into Ichor Holdings, look into the Alpha Picks Portfolio, see if that might be right for you. And I'm also going to link the article that this goes along with. So, go ahead, read up on it, see if that might be something that you're interested in for your portfolio, and we'll catch you here next time.
Now, just for some housekeeping before we go. Past performance is no guarantee of future results. Content is offered for information purposes only. Unless stated otherwise, any and all individuals participating in the video are third parties that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Unless stated otherwise, the views or opinions expressed may not reflect those of Seeking Alpha as a whole.
The accuracy and completeness of content shared cannot be guaranteed. Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker, US investment adviser, or investment bank. Thank you so much.
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