Chris’ note: It’s no secret that we’re bullish on artificial intelligence (AI) here at the Cut.
As our tech investing expert, Colin Tedards, has been pounding the table on, it’s the biggest profit opportunity since the internet boom in the 1990s. And as the 207% gain for AI chipmaker Nvidia this year has shown, the AI boom is already well underway.
But if you want to enjoy truly life-changing returns as AI reshapes our world, Colin recommends you look beyond Nvidia and other mega-cap stocks.
You see, while mainstream investors are chasing Nvidia higher, there’s an under-the-radar way to play this AI boom for explosive gains…
He’ll be getting into all the details at his Nvidia Effect summit. It will air this Wednesday, September 20, at 8 p.m. And you won’t want to miss it.
He’ll show how dozens of tiny, undiscovered AI “microcaps” could take off in the coming weeks – with gains of 1,000% and higher.
It’s free to attend. So make sure to sign up here with one click. Then read on for more from Colin on past examples of this effect in action.
“Every once in a while, a revolutionary product comes along that changes everything.”
That was Steve Jobs on January 9, 2007, when he unveiled the first iPhone at the Macworld conference in San Francisco.
He was right…
The iPhone was revolutionary. And it did change everything.
It hit the shelves in June 2007. In less than six months, it captured 5% of the smartphone market. Today, it’s the best-selling smartphone in the world.
As a result, Apple’s shares more than doubled in 2007.
And if you bought shares when the iPhone first launched, you could have made 500% over the next decade.
That may seem like a lot.
But if you’d known about the “Apple Effect”… you could have made far more.
1,320% Gain on a Tiny Apple Supplier
Take Cirrus Logic (CRUS). It’s a Texas-based audio chipmaker. It was a key supplier for the first iPhone.
The audio chips it made were integral to the iPhone’s sound system. So, they played a critical role in everything from voice calls to playing music and videos.
That made the company perfectly placed to benefit from the “Apple Effect.”
The iPhone was such a popular product that investors piled into its key suppliers, too.
And because some of these suppliers were still tiny companies when all that investor money flooded in, the gains dwarfed even Apple’s.
For instance, when Jobs uttered his famous words, Cirrus Logic had a market value of $640 million. By contrast, Apple was worth $73 billion.
Cirrus Logic returned 1,320% in the decade following the release of the iPhone. That’s roughly three times the return you’d have made buying Apple shares.
It was just one of several stocks that boomed thanks to the Apple Effect.
Another was Imagination Technologies. It made image processing chips for the iPhone. This helped lay the groundwork for the increasingly sophisticated camera systems we see in iPhones today.
From 2008 to 2012, it returned 1,782% versus a 168% return for Apple over that time.
And this effect isn’t just limited to Apple.
A version of this effect plays out in every major tech boom.
A few giant stocks attract most of the attention… and investor money.
Then, you get a much bigger rally in a handful of tiny stocks that are critical suppliers of these giant companies.
That’s what happened in 2021 with a tiny supplier of Tesla.
This Effect Turned $10,000 Into $131,100
AEHR Test Systems was a tiny semiconductor testing company that most folks had never heard of.
But on July 16, 2021, AEHR announced on its earnings call that it had landed a “major Fortune 500” customer.
And its CEO went on to mention Tesla 11 times on the call.
This was six months after Tesla shares reached an all-time high. And it got investors’ attention.
Shares in AEHR jumped 22% overnight on the news. And that was only the beginning of a much wilder ride for early investors.
Shortly after, Tesla chose AEHR as its main partner for ensuring the reliability of its chips. Here’s what happened next…
If you’d invested in AEHR within a month of the news, you’d have had the chance to earn as much as 1,211%. That turns every $10,000 investment into $131,100.
If you’d bought Tesla shares during that same time, you’d be about flat.
That’s why I’ve been pounding the table so hard on what I call the “Nvidia Effect.”
Just like Apple and Tesla did… Nvidia is about to send stock prices for tiny suppliers exploding higher.
That’s the kind of opportunity we have ahead of us now in the suppliers and testing companies that support Nvidia’s AI chips.
King of AI Hardware
Nvidia makes the H100. It’s the premiere chip for AI systems.
These chips are the “brains” behind AI.
That means they’ve largely been responsible for all the breakthroughs in AI we’ve been seeing lately.
And it makes them every bit as revolutionary a product as the iPhone was in 2007.
But like with Apple in 2007 and Tesla in 2021, the biggest gains won’t be in Nvidia. They’ll be from key suppliers that benefit from the Nvidia Effect.
Unfortunately, these opportunities don’t last long.
If you’d waited a few weeks to buy the tiny Tesla supplier, your gains would’ve been cut in half… or more.
And the same thing will happen with the smaller companies that are integral parts of Nvidia’s supply chain.
Right now, everyone is focused on Nvidia and other giant AI stocks. But it won’t be long before they start to pile into these smaller, more speculative supplier stocks.
A Better Way to Play the AI Boom
That’s why I’m going live with my first event here at Brownstone Research this Wednesday, September 20, at 8 p.m. ET.
I’ll show you the full potential of the Nvidia Effect and how you can profit from it in your portfolio.
I’ll also share details of one tiny Nvidia supplier I have my eye on right now. This company is just a fraction of the size of Nvidia, and that means the upside is much higher – potentially 10x… or even 20x returns.
So, mark your calendar. Like I said, this will be my first major event for you and your fellow readers. And I couldn’t be more excited about the fortune-making potential of this strategy.
So, if you haven’t already, reserve your spot with one click here.
Regards,
Colin Tedards
Editor, The Bleeding Edge