Another piece of positive data, but chip stocks are once again facing a collapse.

Yesterday, the US Department of Labor announced that the year-on-year PPI for June was 5.5%, significantly lower than the market expectation of 6.2%. Coupled with the CPI from the previous day also falling below expectations, two consecutive reports of cooling inflation should have allowed risk assets to continue celebrating.

At the opening, it was indeed so. Major US stock indices opened high, and many stocks rose accordingly.

However, AI chip stocks followed a completely opposite trajectory—SK Hynix fell 9%, SanDisk fell 8.12%, and Micron fell 8.02%. Moreover, after-hours trading continued to plunge. Companies with a market value of a trillion dollars either soar by double digits or plummet by double digits each day; this trend is no longer the script of "blue-chip stocks," but rather resembles the volatility rhythm of meme coins in the crypto space.

The causes of the rollercoaster of chip stocks have been analyzed multiple times before: AI capital expenditure growth may have peaked, stock prices are severely overdrawing from fundamentals, and macro uncertainty persists... But when a trillion-dollar market cap stock exhibits daily volatility comparable to a token, an increasing number of investors are starting to ask a more practical question:

If one does not want to be tortured by the heartbeat curve of chip stocks every day, what can be bought right now? Something that can be relatively stable and not miss out on the era's AI dividends?

The 95-year-old "oracle of Omaha," gave an answer just yesterday.

1. Buffett says: The market is becoming a casino, but this stock "can beat 95% of recommendations."

On July 15, Warren Buffett rarely sat in front of the CNBC camera.

Over the past year, this 95-year-old investment legend has remained largely silent. But this time, he chose to speak out publicly against a backdrop of retail investors flooding into the market, explosive growth in single-day options trading, and chip stocks oscillating up and down like meme coins.

"When everyone enjoys gambling, it is hard to find value."

He likened the current market to a"church with a casino attached"—specifically criticizing the explosive growth of single-day options trading as a purely gambling behavior. He pointed out that humans have a natural love for gambling, making "cultivating gamblers more profitable than cultivating investors."

However, at the same time, he also gave a clear counter signal—supporting Alphabet (Google's parent company):

"Alphabet is more likely to be a winner than 90% to 95% of the stocks promoted by Wall Street, because Wall Street cares about whether it can be sold."
This statement affirms Alphabet and criticizes some sell-side analysts who are obsessed with next quarter's data rather than real long-term returns.

2. Why Alphabet? The hard logic of fundamentals speaks.

Buffett's endorsement of Alphabet is not based on a particular technical concept or market sentiment, but on a solid set of data:

Strong revenue growth. In the first quarter of this year, Alphabet's revenue grew by 22% year-on-year to $110 billion. Among them, Google Cloud's revenue surged by 63%—this is direct proof that AI demand is genuinely transforming into income.

Abundant cash flow. Over the past 12 months, the company generated $174 billion in operating cash flow. This means it not only has enough funds to support annual capital expenditures of up to $180 billion to $190 billion but also has a large amount of surplus cash for shareholder returns even after completing investments.

Large position size. Berkshire currently holds over $31 billion in Alphabet, ranking third in its stock investment portfolio, only behind Apple and American Express. Berkshire's position in Alphabet was built in three phases: starting to buy in the third quarter of 2025 and gradually increasing until early 2026; in June 2026, it further increased its holdings by $10 billion through a private equity deal linked to an $80 billion AI financing deal with Alphabet. According to SEC filings, the average price at which Berkshire bought Class A shares was $351.81, and Class C shares' average price was $348.20.

Additionally, Alphabet just joined the Dow Jones Industrial Average three weeks ago on June 29, replacing telecom giant Verizon. This adjustment further expanded the index's coverage in high-growth areas such as artificial intelligence, cloud computing, and digital advertising.

3. Alphabet's valuation: Not cheap, but not crazy either.

Boosted by Buffett's endorsement, Alphabet's stock price surged 3.6% to $370.2 on that day.

Using traditional DCF (discounted cash flow) models for assessment, Alphabet's current reasonable value range is approximately $308 to $355. This means that the current stock price of around $370 has indeed exceeded the upper limit of "conservative valuation," indicating some premium.

However, the magnitude of this premium, compared to the valuation bubbles in some current AI chip sectors, is completely on another level:

• Micron's DCF valuation is around $185-275, while the stock price once surged above $1,200—more than a 400% premium.

• SK Hynix’s PE once exceeded 6 times its historical average.

• SpaceX's valuation soared from a $135 issue price to over $200, but its DCF valuation was only $50-60, without profit support for the stock price.

In contrast, Alphabet's premium is within a controllable range. It is not a "balloon inflated by narratives" but a giant backed by real revenues, real cash flow, and real AI commercialization progress. The stock price of $370 contains emotional elements but is more heavily weighted by fundamentals.

4. July 22: Earnings report will validate everything.

Of course, Buffett's endorsement does not equate to a get-out-of-jail-free card. Whether Alphabet can continue to meet market expectations ultimately depends on numbers.

On July 22, after US stock market trading, Alphabet will announce its latest quarterly earnings report. This will be a crucial moment to test whether the "Buffett effect" can persist. The market will focus on:

• Whether Google Cloud's revenue growth can maintain high speed.

• Whether AI investments have begun to yield quantifiable returns.

• The resilience of the advertising business.

• Whether there are any signals of adjustments in capital expenditure plans.

If the earnings report continues to deliver solid numbers, Alphabet may become one of the few entities in the current wave of AI that "participates in the narrative without significantly detaching from fundamentals"—for those who want to capture the AI dividend while avoiding the rollercoaster volatility of chip stocks, this represents a rare option.

5. In conclusion: Finding "real investment" in a casino.

Buffett's statement that the market is becoming a casino is not an exaggeration.

When single-day options trading volumes hit historic highs, when chip stocks oscillate daily with double-digit amplitudes, and when retail investors flock to Micron and SpaceX chasing the myth of wealth— the speculative atmosphere in the market has indeed reached an extreme position.

But in such an environment, Buffett chooses to stand up and point to an entity he considers to be a "real investment." This is not just a recommendation but a message conveyed with his reputation and $31 billion position: even in a casino, some can find worthwhile assets supported by solid fundamentals.

On the BIT securities platform, users can directly purchase real Alphabet shares (GOOGL) listed on Nasdaq, not tokenized certificates or price mappings, but actual stocks registered within the DTC system, enjoying full shareholder rights. With the near-instantaneous deposit channel using USDT 24/7, you can secure your funds and establish a position before the earnings report is released, not missing any crucial window. Whether you choose to participate in the volatile game of chip stocks or, like Buffett, seek fundamentally solid AI giants, the BIT securities platform offers two completely different options.

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