Is FCX’s pullback a buying opportunity?… Eric Fry’s “builders vs. appliers” framework explained… 12 applier stocks that Jonathan Rose is warning aboutVIEW IN BROWSER
One of Eric Fry’s favorite ways to play the AI infrastructure boom is in the middle of a double-digit pullback. Is it time to buy the dip – or reevaluate the investment thesis? Eric – our global macroeconomic investing expert and editor of The Speculator – has been making the case for copper as one of the most structurally compelling commodities. The reason is straightforward: every major theme reshaping the global economy – AI data centers, electrification, EVs, power grid expansion – runs through copper. As just one illustration of the related demand, take today’s hyperscale data centers… They’re essentially a copper-and-aluminum exoskeleton wrapped around racks of silicon. So, as the need for those facilities accelerates, so too does demand for copper. S&P Global sees global copper demand rising from roughly 28 million metric tons today to 42 million by 2040. But supply is where things get complicated – and where today’s price action gets harder to readTwo disruptions are hitting simultaneously. First, the war in the Middle East is rerouting cargo ships away from the Strait of Hormuz, creating bottlenecks and delaying copper shipments. And when supply temporarily shrinks, traders price in scarcity fast – spiking spot premiums, especially in import-heavy regions. Second, Eric writes that beginning last Friday, China started restricting exports of sulfuric acid, a chemical essential to copper mining. That’s likely to constrain production at the source before actual shortages even materialize. Traders have been pricing in that risk. The result this year has been a rally driven by two distinct factors – genuine demand growth and supply-risk stress. Eric suggests investors play both angles:
Because copper’s rally is being driven by two distinctive forces – genuine demand growth and supply risk stress – the best approach is to invest in stocks that win in either scenario.
On the demand side, the winners are energy and raw materials companies that benefit as copper gets consumed at record rates by AI infrastructure, power grids, and industrial expansion.
On the supply side, the winners are copper mines, whose profit margins expand when prices spike faster than their production costs.
The stock that sits at the intersection of both is Freeport-McMoRan Inc. (FCX) – the world’s largest publicly traded copper miner. Eric has been trading it for years. Back in 2020, he put Speculator subscribers into call options on FCX, predicting a new “commodity supercycle” would send it soaring. He was right. By July 2021, those subscribers closed their trade for a 1,000%+ return. Which brings us back to the double-digit drawdown we mentioned at the top of today’s Digest – now hitting FCX.
Is this a buying opportunity?Two weeks ago, the copper mining giant hit a new all-time high. But just days later, when Freeport reported earnings, it cut its 2026 copper sales guidance from 3.4 billion to 3.1 billion pounds due to operational setbacks at its Grasberg mine in Indonesia. The market didn’t like it. Since its high, FCX has pulled back nearly 20%. 
Is this a reason to turn cautious on FCX? Or a good entry point for longer-term investors? Well, let’s start with the most important related question… Has the structural story that made FCX compelling changed? No. We still have a massive demand from the AI infrastructure buildout, and a supply side that can't keep pace – either way, FCX wins. Here’s Eric:
When demand spikes, FCX sells more copper into a strong market.
When supply shock hits, copper prices jump faster than FCX’s costs do, expanding margins either way.
Eric still holds FCX in his Fry’s Investment Report portfolio with subscribers sitting on 247% returns. Here’s the twist many investors are missing todayThe type of booms that create tailwinds for commodities like copper don’t always reward the companies that have spent billions on the infrastructure as the megatrend matures. In fact, this pattern of “the builders don’t always win long term” has repeated across nearly every major technological shift in modern history. As Eric puts it:
The builders struggled. The appliers got rich.
The reason comes down to economics. Builders face enormous upfront costs, constant reinvestment, and rising competition. As more capital floods in, returns get competed away. Margins compress. And even if demand ultimately arrives, it often shows up too late for early investors. In Friday’s Digest takeover, Eric walked through the historical evidence (railroads in the 1800s, the dot-com fiber buildout) and explained why he believes that same shift is beginning to play out in AI today. It’s worth reading if you missed it, but here’s the short version… Companies that didn’t build new technology infrastructure but used it were able to scale faster, operate more efficiently, and compound returns than the infrastructure build-out companies that carried the enormous capital burden of the buildout. So, what’s an example of an applier poised to benefit today? PayPal (PYPL). Eric says it’s deploying AI within an existing payments ecosystem rather than building infrastructure from scratch, and that revenue per employee has surged more than 50% since 2022 as a result. For a deeper dive into the winners and losers of this transition, Eric just released a special new broadcast that explains this shiftIt highlights popular stocks could be at risk as the cycle evolves, and details which lesser-known “appliers” are positioned to benefit as the focus moves from building the technology… to putting it to work. You can check it out right here. Eric even gives away his No. 1 applier stock to buy today. Now, to avoid confusion, FCX isn’t a builder in Eric’s framework – it’s not pouring tens of billions into data centers and chips. Rather, it’s supplying the raw materials that make the buildout possible. Eric writes that the real builders are the hyperscalers: Alphabet (GOOGL), Amazon (AMZN), Meta Platforms Inc. (META), Microsoft Corp. (MSFT). These companies look dominant today – and in many respects, they are. But history suggests that as the buildout matures, more capital floods in, competition intensifies, and the returns on that infrastructure investment get competed away. So, keep timing in mind… While the builders often outperform in the early innings, the question Eric is asking is who wins in the middle and later ones. But not every “applier” is the kind Eric is recommendingThis brings us to an important distinction – one our trading expert Jonathan Rose, editor of Masters in Trading: Live, has been focusing on. Eric’s appliers are companies using AI to compound an existing competitive moat: a massive installed user base, proprietary data, or a dominant market position. AI makes a strong business stronger. But Jonathan just flagged a handful of companies he’s bearish on that appear to be in the same applier category – but they carry far greater risk. We’re talking about software businesses that are deploying AI, but they’re using it to try to defend a deteriorating model rather than extend a durable one. The moat was already eroding before AI arrived. Today, AI is accelerating that erosion, and in some cases actively cannibalizing their revenue. Jonathan laid out his full case in last Thursday's free Masters in Trading: Live episode. He flagged 12 names – with a combined market cap of $1.4 trillion – that he believes face substantial downside risk over the next 24 months. Jonathan’s framework centers on four warning signalsHe calls them the “Four Tells”:
- Coordinated insider sales
- Senior talent defecting to AI-native competitors
- A pivot away from per-seat pricing toward consumption models
- And CEO language that matches to every prior disruption cycle – the “AI augments, don’t replace” playbook.
And though the software sector has already suffered a painful drawdown in recent months, Jonathan believes there’s more to come:
The disruption isn’t done; it’s rotating.
We’ve watched this script before – Chegg, Teleperformance, Fiverr – and the pattern repeats.
I’ll give you three companies on Jonathan’s red-flag radar. The first two are Salesforce (CRM) and ServiceNow (NOW). Salesforce is the dominant customer relationship management platform – the software that helps companies manage sales pipelines, customer data and marketing campaigns. For years, it was the gold standard of enterprise software. Meanwhile, ServiceNow sells workflow automation software – the systems that route IT help tickets, HR requests and approval processes through large enterprises. It’s been one of the most beloved names in enterprise software for the better part of a decade Jonathan sees both as risks to your portfolio as AI continues to proliferate. The third company is likely to raise a few eyebrows…It’s Palantir (PLTR) – one of the highest-returning stocks in the entire market over the last few years. It has minted enormous returns for investors who rode it up and become something of a cult name in the retail investing community. While its defenders will argue it’s one of the rare software names actually built for the AI era rather than threatened by it, Jonathan sees something else:
CEO Alex Karp and four senior officers filed sales on the same day at the same reference price — $205 million in coordinated insider intent.
Smart money inside is ringing the register.
When the people closest to the business are positioning for the exit in a coordinated way, Jonathan takes it seriously – regardless of the narrative. So, how far could PLTR fall? Jonathan’s model suggests it could be as much as 45%. PLTR reports earnings today after the bell – they could already be out by the time you read this. If Jonathan reviews the numbers, we’ll update you here in the Digest. But for now, you can hear more of his case against PLTR – and access the remaining nine names on his watch list – in last Thursday’s free Masters in Trading: Live episode right here. And to sign up for Masters in Trading: Live so that you don’t miss any of Jonathan’s free market analysis and updates, click here. Wrapping upWe have a simple through-line today… AI is reshaping where value accumulates in the economy, and the winners aren’t always what the consensus expects. Copper sits upstream of the buildout. True appliers sit downstream. And some of the most celebrated software names of the last decade may be caught in the middle – with AI eroding the very moats that made them great. We’ll keep tracking all three dynamics here in the Digest. Have a good evening, Jeff Remsburg |
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