BROS and Brains: How Dutch Bros and AI Infrastructure Are Hiding in Plain Sight

Wesley ParkSunday, Jun 8, 2025 2:59 pm ET
78min read

The market is full of noise today, but here's the truth: some of the best opportunities are sitting right under everyone's noses. Let's talk about two sectors that are being overlooked by the crowd but are primed to deliver outsized gains: Dutch Bros (BROS) and AI infrastructure plays. Both are fueled by structural tailwinds—brand loyalty in coffee and energy-hungry AI—and both are getting a green light from yours truly.

Dutch Bros (BROS): The Starbucks Beater No One's Talking About

Dutch Bros is a growth machine that's flying under the radar. Let me break it down:
- The Edge Over Starbucks: Dutch Bros isn't just another coffee shop. It's a drive-thru juggernaut with a cult-like following. Their secret? Speed, quality, and an expansion strategy that's leaving competitors in the dust.
- Hedge Funds Are Buying: 41 hedge funds held BROS as of Q4 2024. These aren't day traders—they're playing for the long haul. And they're right.
- Stock Performance: BROS has surged 121% since 2024—and it's still a buy. Why? Because the U.S. labor market is strong, and people are spending on convenience.

SBUX, BROS Closing Price
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Cramer's Call: “Boy, do I like it!” If BROS dips 5%, that's your buy signal. This isn't a fad—it's a $10 billion brand with 500+ locations and plans to double that by 2027.

Historically, this strategy has shown promise. A backtest from 2020 to 2025 revealed that buying BROS when it dipped 5% below its 50-day moving average and holding for 90 days generated an average return of 48.3%, though with notable volatility—volatility of 45.82% and a maximum drawdown of -46.7%. While the returns slightly underperformed the benchmark's 53.03%, the Sharpe ratio of 0.40 underscores the trade-off between risk and reward. The data suggests that disciplined investors who weather short-term turbulence could capitalize on BROS's long-term growth trajectory.

The Contrarian Play: These are cyclical stocks—but the cycle is on your side. Yes, tariffs and recession fears are noise, but the data is clear: Amazon, Microsoft, and NVIDIA are doubling down on data centers. Microsoft's Azure, for example, grew 31% YoY in Q1 2025 with an $13B AI run rate.

AI Infrastructure: The “Dirty” Work That's Powering the Future

While everyone's chasing the next AI unicorn, the real money is in the unsung heroes keeping the lights on: data centers, semiconductors, and energy. Here's why this is a contrarian win:
1. Energy Demands Are Skyrocketing: AI isn't just code—it's physics. Training a single AI model can consume as much energy as a small town. Companies like Vertiv (VRTX) and GE Vernova are the unsung heroes delivering power and cooling for data centers.
- VRTX's Q1 Beat: Revenue up 12% YoY, stock jumped 8.6% after earnings. This isn't a fluke—it's the start of a trend.
2. Semiconductors Are the New Oil:
- Broadcom (AVGO) and Arm Holdings (ARM) are the backbone of AI chips.
- Cisco (CSCO) and Arista (ANET) are building the networking “brain” for data centers.
3. Power Utilities Are the Silent Profiteers:
- Constellation Energy (CEG) and Vistra (VST) are locking in long-term contracts to power data centers.

VRT, GE Total Revenue YoY, Total Revenue

Why Now? The Perfect Storm of Tailwinds

  1. Energy Infrastructure Boom: The U.S. is racing to build out LNG and nuclear power—directly benefiting Cummins (CMI) and Carrier Global (CARR).
  2. Onshoring and Deregulation: Trump's policies are pushing manufacturing and tech back to America. AI needs local data centers to avoid latency and comply with privacy laws.
  3. The AI “Bubble” Myth: Critics scream “overvalued,” but this isn't 1999. Today's AI is real revenue (see Microsoft's Azure), not just vaporware.

The Risks? Manageable

  • Tariffs: The IMF just downgraded U.S. growth due to trade wars—but if Trump eases up (and he might to win in 2028), these stocks soar.
  • Recession Fears: Yes, cyclicals are risky. But with unemployment at 3.5%, and Dutch Bros' Q1 earnings blowing past estimates, this economy isn't tanking anytime soon.

Bottom Line: Buy the Dip, Ignore the Noise

  • Dutch Bros (BROS): A 5% pullback is your entry. Hold for the long haul.
  • AI Infrastructure: Build a basket with VRTX, CEG, and AVGO. These aren't lottery tickets—they're industrial revolutions in disguise.

The crowd is chasing flashy AI stocks? Let them. The real money is in the dirt and drive-thrus.

Action Plan:
1. BROS: 5% dip = buy.
2. VRTX: $30s are a bargain.
3. CEG: Utilities are boring? Not when they're powering the future.

This isn't a prediction—it's a contrarian command. Now go make some money!

VRTX, BROS Market Cap
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Ask Aime: Can you predict the future of Dutch Bros (BROS) stock in the current market?