Tariff Troubles and AI Gold: Why Best Buy's Struggles Highlight Better Opportunities in Energy Infrastructure

The retail landscape is in flux, but few companies exemplify the challenges of modern commerce like Best Buy (BBY). While its Q1 2025 results highlighted resilience in core operations, tariffs and shifting consumer behaviors have forced the retailer to recalibrate its outlook. Meanwhile, the AI boom is creating a stark contrast: undervalued infrastructure plays like Oklo Inc. (OKLO), Marvell Technology (MRVL), and Micron Technology (MU) are positioned to capitalize on energy demands and U.S. onshoring trends. Here's why investors should pivot their focus—and their portfolios—to these overlooked opportunities.

Best Buy's Tariff Headwinds: A Retailer's Struggle Against Global Forces

Best Buy's Q1 2025 earnings revealed a retailer under pressure. Despite a 60-day inventory buffer and strategic vendor diversification (shifting sourcing to Vietnam, Mexico, and Taiwan), tariffs continue to bite. The 20% “fentanyl” tariffs on Chinese imports and 10% levies on appliances and gaming consoles have forced price hikes on 30-35% of its product mix. While Best Buy claims these adjustments were “modest” compared to tariff rates, the net effect is clear: guidance cuts.

• Sales guidance narrowed to -1% to +1% for the full year, down from earlier expectations.
• Operating margins dipped to 4.2%, as tariff-driven cost pressures outpaced price increases.

Worse, Best Buy's Health division restructuring—costing $109 million—highlighted internal inefficiencies. While not tariff-related, this underscores broader margin challenges. The company's focus on AI-driven tools (e.g., chatbots for customer service) offers long-term hope, but today's struggles reflect a business stuck between rising costs and cautious consumers.

The AI Infrastructure Play: Oklo, Marvell, and Micron Lead the Charge

While BBY battles tariffs, the AI boom is creating a $2 trillion energy infrastructure gap. Data centers already consume 2% of global electricity, and this figure is rising exponentially. Here's where the overlooked winners lie:

1. Oklo Inc. (OKLO): Nuclear Power for the AI Age

Oklo's small modular reactors (SMRs) are a game-changer. Its Aurora microreactor, set for deployment by 2028, offers baseload power at 1/10th the cost of lithium-ion batteries, ideal for cooling massive data centers. With partnerships from Microsoft and Alphabet, and $1.5 billion in DOE grants, Oklo is policy-backed and debt-free ($90 million cash, no debt).

• Financial turnaround: Q1 2025 saw a 59% narrowed net loss; analysts project a 97.7% reduction by Q2.
• Valuation: Trades at 12x forward P/E, with a $75 price target offering 19% upside.

2. Marvell Technology (MRVL): The Chipmaker Fueling AI's Brains

Marvell's custom silicon is the unsung hero of AI infrastructure. Its revenue surged 63% in fiscal Q1 2026, driven by AI-specific chips for data centers. With a $75 billion addressable market in custom AI silicon, Marvell is undervalued at 22x forward earnings—a discount to the Nasdaq-100's 31x multiple.

• Growth catalyst: Its Blackwell Ultra platform integrates AI accelerators, directly addressing the energy efficiency needs of hyperscale data centers.

3. Micron Technology (MU): Memory Power for AI's Thirst

Micron's HBM (high-bandwidth memory) is critical for AI accelerators. The HBM market is projected to hit $86 billion by 2030, and Micron controls 40% of global DRAM capacity. Despite a beaten-down stock price, valuation is absurdly low: 11x forward P/E against projected 439% EPS growth to $7 in 2025.

Why These Plays Offer Better Risk-Adjusted Returns Than BBY

The contrast between BBY and these infrastructure stocks is stark:

Metric	Best Buy (BBY)	Oklo (OKLO)/Marvell (MRVL)/Micron (MU)
Earnings Growth	Flat/pressured by tariffs	40-500%+ EPS growth (MRVL/MU)
Debt Levels	Manageable but no leverage buffer	Zero debt (Oklo); disciplined leverage (MRVL/MU)
Policy Tailwinds	Neutral	U.S. onshoring grants, clean energy mandates
Margin Expansion	Under pressure	Clear paths to profitability (Oklo's cost model, MU's HBM margins)

The Bottom Line: Rotate Out of Retail, Into Infrastructure

Best Buy's Q1 results underscore a broader truth: retail is a low-margin, high-risk game in an era of global trade uncertainty. Meanwhile, AI infrastructure stocks like Oklo, MRVL, and MU are undervalued, policy-protected, and positioned to dominate the energy needs of the next decade.

Investment Call:
- Sell BBY on rallies above $85 (current price: $80).
- Buy OKLO, targeting its $75 price target (2028 SMR rollout catalyst).
- Accumulate MRVL and MU as AI data center build-outs accelerate.

The AI revolution isn't just about software—it's about the energy, chips, and hardware that power it. Investors ignoring infrastructure plays are missing the bigger picture.

Data as of June 19, 2025. Past performance does not guarantee future results.