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On the stock market, the spotlight is usually on the companies that sell their products directly to customers. However, I find the companies in the background more exciting - the shovel manufacturers who make the actual operation possible in the first place. That's where I see the more stable opportunities in the long term.
A prime example is $ASML (-0.29%) (ASML Holding). Their lithography machines are the backbone of the semiconductor industry. Without them, there would be no chips for smartphones, AI models or e-cars. With a gross margin of over 50% and a virtually unrivaled market position, they are the epitome of a shovel manufacturer for me. Of course, the share price is not cheap, but I see a long-term fundamental investment here.
Then $GOOG (-0.5%) (Alphabet). Many label Alphabet as an advertising company, but for me they are the digital infrastructure par excellence. Billions of people access Google Search and YouTube every day. What I find even more exciting is the Google Cloud, which is now growing by over 30% and is a key driver for future AI applications. There are also exciting projects and topics such as quantum computing and autonomous mobility. Anyone scaling into the internet or AI can hardly avoid Alphabet - and that's exactly what makes it a shovel manufacturer in the digital age.
And last but not least $INOD (-2.07%) (Innodata). Much smaller, but interesting for precisely that reason. They supply data processing and training pipelines for AI - the raw material that big tech companies urgently need. The share price has risen massively in the last month, so I have reduced the position. But the story remains exciting: Innodata makes data usable and thus provides the shovels in the AI gold rush.
For me, the pattern is clear: shovel manufacturers benefit from major trends because they provide the tools without having to bear the risks of individual end products themselves. They often have a technological edge that makes them difficult to replace, and it is precisely this combination of stability and growth that makes them attractive in the long term.
How do you see it - do you tend to focus on the enablers in the background or on the companies that are directly at the forefront of new trends?
