'Big Short' Investor Steve Eisman Looks Beyond Tech And Is Making A Big Bet On Infrastructure
© Reuters/Jessica Rinaldi Steve Eisman. Reuters/Jessica Rinaldi- Steve Eisman goes beyond the hype around technology and makes a big bet on America's infrastructure.
- He said on Bloomberg's "Odd Lot" podcast that going green means significant investments in the network.
- He cited shares of utility companies, which are up 34% year-over-year on demand for infrastructure.
While some tech stocks continue to climb to higher valuations, Steve Eisman noted a lack of enthusiasm for the sector and said the focus is on other investments.
The legendary investor made famous on "The Big Short" for correctly predicting the 2008 housing market crash is betting big on U.S. infrastructure, he said on Friday's episode of Bloomberg's "Odd Lot" podcast.
"For example, if someone gave me their money today, I wouldn't be too technologically burdened. It will be more diverse. God forbid, I will close. There is more to the story than technology. he says. "For example, has anyone noticed that the power grid in the US is pathetic?"
According to him, green initiatives initiated by local and federal politics will open the door to serious investment opportunities. For example, with the increased demand for electricity due to the increased use of electric stoves, the power grid had to be rebuilt.
"The estimates for the US grid upgrade. Everybody has different estimates, but it's $200 billion, $300 billion, I mean, it's an incredible number," said Neuberger, a portfolio manager at Berman.
Eisman saw this game. "The opportunity for the company is so great that the stock is being revalued," he said, referring to utility fund Quanta Services. The stock is currently trading at $187, up nearly 34% since the start of 2023.
His predictions also take into account the overall state of US infrastructure, and what he describes as a serious need for modernization.
Eisman has been betting on the network since at least February, when he said tech stocks could struggle amid rising interest rates. According to him, development, infrastructure and industrial areas are worth exploring instead.
While he said on the podcast that technology stocks are investable for the long term, he said it's unclear how they will fare in the future.
When it comes to artificial intelligence, the technology behind many mega-cap stocks, Eisman said it's too early to predict a real winner.
This is because the developments in the subject revolve mainly around the computer chips on which the artificial intelligence is built, although not enough time is spent on how the technology is implemented.
"In terms of investment, the story is very limited right now," he said.
