Is it too much to call AI a “miracle”?
If you think artificial intelligence (“AI”) is all about helping kids research school essays… composing funny poems… or creating cool images based on your favorite painter, I understand you being in Camp Skeptic.
If you’ve used ChatGPT, Google’s Bard, or DALL-E, you’ll know these generative AI systems are impressive.
“Miracle,” though, probably seems like too strong a word.
But that’s not the case for Ann Johnson…
In 2005, the then 30-year-old volleyball coach, teacher, and mother from Saskatchewan, Canada, suffered a debilitating stroke.
It left her paralyzed and robbed her of her ability to speak.
And for the past 18 years, she hasn’t been able to cheer on her players from the sidelines… teach classes… or tell her kids, “I love you.”
AI has changed that.
Here’s how our tech investing expert, Colin Tedards, explained it over at our free daily Bleeding Edge e-letter…
Surgeons implanted 253 electrodes into Ann’s brain. They intercept brain signals – specifically ones that control speech and facial expressions.
These signals are transported in real time to an AI that translates her brain signals into speech and facial expressions on a digital avatar.
The clip below shows the first time Ann had spoken since her stroke, thanks to help from AI and her digital avatar.
Ann Johnson speaks with the help of AI (Source: UC San Francisco)
Researchers used 15 minutes of a video from her wedding speech to capture her mannerisms, speaking style, and inflection.
So, this AI can decode her brain signals to communicate with Ann’s same speech patterns and style, all through her digital avatar.
If that’s not miraculous, I don’t know what is.
And it underscores something I’ve been hammering on in these pages…
AI is about more than chatbots and image generators…
These apps have grabbed everyone’s attention. And for good reason…
If you’ve used them, you’ll know they’re extremely useful tools. (I use ChatGPT instead of Google Search when I’m looking for information online. And I find it faster and easier.)
But that just scratches the surface of what these “thinking machines” can do…
AIs have huge potential in education. For instance, they’ll be able to do the tedious task of grading. This will free up human teachers to spend more time with students.
As I showed you, AIs are also better at detecting early signs of breast cancer than human doctors.
AIs can help us create nuclear fusion. Scientists are using them to help optimize plasma confinement – one of the major challenges in making nuclear fusion a reality.
Figuring this out would give us an unlimited zero-carbon, non-combustion energy source… and radically transform the energy industry.
AIs can also help detect pests on crops… figure out what crops will deliver the highest yields… and predict the exact moment of ripeness for fruits and vegetables.
This will help us feed a growing global population.
The vast potential across industries and society makes AI the definition of a “megatrend”…
If you’ve been with us for some time, you’ll know all about megatrends and why they’re so profitable.
But for newer readers, a megatrend is an unstoppable trend that’s global in scale… has profound implications for society, the economy, and markets… and lasts for decades.
One example is the transition from fossil fuels to renewable energy. Another is the automation of manufacturing.
Globalization and the integration of supply chains is another classic example, as is the unwinding of globalization we’re seeing today and the re-shoring of supply chains.
In short, a megatrend is a future-shaping trend you can profit from if you identify it early and stay invested for the long run.
Another megatrend that made investors rich was the rollout of the internet…
Although most folks didn’t see it coming, the World Wide Web revolutionized everything from retail, to media, to travel, to politics.
If you caught that megatrend early… and positioned yourself in the right stocks… You probably never have to work another day in your life.
A $10,000 investment in Amazon in 2005, for instance, is now worth $600,000.
The same amount invested in Apple shares in 2005 is now worth more than $1.6 million.
If you put $10,000 in each stock… and did nothing else… you’d be worth more than $2 million. If you added these stocks to your 401(k) year after year, you’d sitting on many multiples of that amount.
And AI as a technology is more powerful and wide-reaching than the internet. The AI boom will eclipse even those life-changing returns.
That’s why Colin is out with an AI masterplan to maximize your profits as this megatrend radically transforms our world.
Hardware, software, everywhere…
If you want to know how the AI boom will play out, Colin says you need to look back to the trajectory of the internet boom.
When we do that, a clear pattern emerges.
Over to Colin for more on that…
During the dot-com boom in the late 1990s, the hardware makers benefited first. Think Cisco Systems and its networking devices. These formed the physical backbone of the internet.
In 1995, this stock traded at about $4. By March 2000, at the peak of the boom, it traded for $80. That’s 1,900% gain. This made it one of the most valuable companies in the world.
Then, there were the software developers. Microsoft is in this bucket. Its Windows operating system made personal computers accessible and user-friendly just when the rise of the internet made PCs a must-have device.
In 1995, the stock was trading just shy of $4 and reached up to approximately $60 by December 1999. That’s a 1,400% increase.
As for the “everywhere” phase, can you think of any industry the internet hasn’t transformed? Back to Colin…
Businesses that didn’t adopt the technology fast enough, like Blockbuster, faded away. Companies that saw our online future coming and adopted this new technology, like Amazon, became more efficient, more productive, and more profitable.
It will be the same pattern with AI. So just remember: Hardware, software, everywhere.
Nvidia is the hardware company powering AI today…
But as Colin has been showing his readers, after this year’s surge of 247%, this AI stock is now priced for perfection. That means the explosive gains are in the rearview mirror.
That’s why he prefers rival chipmaker Advanced Micro Devices (AMD).
It’s coming out with a cutting-edge AI chip later this year, the MI300. And Colin says it will be a game changer…
The MI300 is a leap in chip design, architecture, and capabilities. So, it helps AIs run faster and do more tasks. It also cuts the space and energy needed to run ChatGPT and other AI systems. That saves on the cost to start and maintain an AI data center.
It takes several years of research and development to bring out a new AI chip. So, I expect Nvidia and AMD will have this market largely to themselves through 2024.
Nvidia may be the king of AI chips. But for an opportunity as enormous as this, second place isn’t a bad position to be in.
Even better, AMD is a bargain compared with Nvidia…
Nvidia trades on a price-to-sales (“P/S”) ratio of 37. So, investors are pricing the stock at about 37 years of current sales.
AMD trades on a P/S ratio of about eight. So, investors are pricing the stock at a much more reasonable eight years of current sales.
And remember, AMD doesn’t have to dethrone Nvidia to have a great AI business. There’s so much demand for these chips, there’s plenty of room for a close competitor.
So, consider adding some shares of AMD to your portfolio today and socking them away. If Colin’s right, the upside could be in the thousands of percent.
And look out for more from me on the AI theme in future dispatches…
I’ll have more for you on how to play the “software” and “everywhere” phases of this boom in future updates.
Regards,
Chris Lowe
Editor, The Daily Cut