A cloud agent bought these $2 trillion artificial intelligence (AI) stocks ahead of the ceasefire with Iran. Now they’re both consolidating – is it too late to buy?
When geopolitical shocks rocked the stock market ahead of the Iran ceasefire, most investors hit the sell button. But an artificial intelligence (AI) agent was created Anthropic’s cloud models Did the opposite – loading silently Microsoft(NASDAQ:MSFT) and making broadcom(NASDAQ:AVGO) Its single largest position.
Now, both the stocks are rising. The move to an AI agent was not a lucky guess. It was the product of a system free of fear – one that analyzes balance sheets, validates backlogged pipelines, and estimates adoption curves. While Wall Street scanned the same data and saw major risks, the cloud identified an anomaly.
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Cloud’s portfolio is not influenced by headlines or rhetoric that drive stock momentum. Rather, the algorithm runs on brute optimization: finding wide gaps between the valuation and the internal compounding power.
In late March, an account known as The Cloud Portfolio on X (formerly Twitter) revealed that a customs agent allocated 10% of the fund to Broadcom and diverted 8% of its turnover budget to Microsoft. Positions of this size are not incremental changes. They represent high-conviction ideas within the broader portfolio as Cloud’s model calculated expected returns north of 20%, while the next-best names hovered around the low single digits.
The difference between a cloud agent and a real-life analyst is not the ability to process data faster. It’s just that bots lack the emotions and psychology that drive them. Therefore, it behaves differently than humans. Humans have a habit of focusing on a specific figure from the latest headline, rumor or earnings report.
In contrast, Cloud treats these variables as inputs to its model rather than definitive conclusions. In short, AI turns potential concerns into simple questions:
In 10 years, which companies are positioned to own the artificial intelligence rails?
At what price is this infrastructure being offered today?
The ceasefire in Iran was, apparently, just a noise to create a stir in the technology sector. The ongoing structural construction of AI is most relevant to the story.
Before its withdrawal after the armistice, Microsoft’s stock had fallen nearly 28% from its high. Worst start of the year since 2008. The company was trading at a forward price-to-earnings (P/E) multiple of 20 – 34% lower than the software sector average and the cheapest valuation in five years.
As for the cloud, this valuation compression was not a sign of weakness or fracture in Microsoft’s business. The selling pressure was merely misvaluing one of the world’s largest enterprise cloud platforms at a time when its fortress was widening.
Cloud identified two vectors colliding simultaneously. First, Azure is guiding for 38% growth next quarter, supported by a surprise revenue backlog of $625 billion. Second, Copilot surpassed 4.7 million paid customers, proving that generative AI is not a science experiment but a legitimate revenue engine that embeds itself inside Office – one of the stickiest enterprise software suites on the planet.
The risks to Microsoft’s growth seem clear: AI will reduce free cash flow in the near term by more than $100 billion in capital expenditures. But the cloud views this spending differently than Wall Street.
The AI trading model sees Microsoft’s infrastructure budget not as a waste of capital but as the necessary price of scaling operating systems for the AI age. If Azure continues to grow and Copilot continues to embed into Microsoft’s vast ecosystem, the current multiple compression should be temporary as the company’s earning power becomes a dominant one.
Wall Street is pricing Microsoft out of fear, while the cloud is pricing the Internet giant as a long-term compounder.
While Microsoft supplies the cloud infrastructure, Broadcom supplies the silicon that powers cloud intelligence. At the end of March, Cloud Agent gave 10% of the portfolio to Broadcom – its largest single position.
Why was Cloud so bullish on Broadcom? Because AI believes that Broadcom has created a near-monopoly in the custom AI chip landscape – controlling 60% to 80% of the custom silicon market. These chips, known as application-specific integrated circuits (ASICs), are specialized accelerators that hyperscalers use to train and run next-generation models.
During the first quarter, AI Semiconductor revenue increased 106% year over year to $8.4 billion, while Broadcom’s order book is on pace to reach $100 billion by 2027. Specifically, Broadcom includes hyperscalers alphabet, meta platformand OpenAI as part of its growing backlog.
Shortly after the earnings report, the thesis about Broadcom was validated as Google extended its TPU partnership through 2031. Additionally, Anthropic has committed to 3.5 gigawatts of Broadcom-powered AI TPUs starting next year. From analyst Vijay Rakesh mizuho It is estimated that Anthropic Relations alone could add $21 billion to Broadcom’s revenue this year and reach $42 billion by 2027.
While Wall Street discounts semiconductor stocks for cyclical risk amid macro uncertainty, Cloud sees a structural imperative: AI hyperscalers are racing to make their own silicon as clusters of general-purpose chips are no longer enough to keep pace with new applications in agentic AI, robotics and autonomous systems.
Broadcom isn’t selling commoditized shovels. The company is designing custom-forged steel from which the shovels are made. When the ceasefire was announced and sentiment reversed, Broadcom stock simply returned to the backlog that is supporting the company’s growth trajectory.
Cloud didn’t buy Microsoft and Broadcom as a swing trade. Agent understands that the next decade of AI will play on their tracks, and those rails are just beginning to be laid. For human investors willing to take the same disciplined approach to AI-optimized portfolios, the opportunities seen through the cloud are still very much alive.
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Adam Spataco Alphabet, Meta Platform and Microsoft have positions. The Motley Fool has positions in and recommends Alphabet, Broadcom, Meta Platform, and Microsoft. The Motley Fool has one Disclosure Policy.
