The Big AI Trade that Wall Street’s Missing

Michael Robinson

Friday, July 28, 2023

When I wrote you on November 15th, I told you about a chip company.

At the time, the company was best-known for its graphics chips. But as I explained, I believed it was set for massive gains as it jumped into the race to equip cars with self-driving features.

If you’d followed my advice that day, you’d have had peak gains of 167% in what’s become one of the market’s top performers this year.

But here’s the thing: the trends this company was targeting are still offering us multiple shots on goal.

One of those shots is related to the current boom in AI, the tech system that could boost global economic activity by some $13 trillion by 2030.

If you’re an investor looking for a high-potential trade, this is one you shouldn’t pass up…

Without Software, You’ve Got Nothing

The big story starts here:

There’s simply no way you can have advanced computing systems like AI without robust software.

After all, software is the key to understanding and processing human queries, whether those are in written form, or speech, or anything else.

And this is what the new company I’ve uncovered has pushed so heavily into.

I’ll provide the information you need to make this trade in a moment.

But first, let’s look at why software is such a key driver in the rollout of AI.

The Details

Powerful hardware is obviously necessary to run AI systems, with their ever-more complex computations. But without the software to go with it, all you have is an expensive piece of silicon — not an AI.

There are a few reasons for this.

For one thing, software is what allows humans to communicate to the AI what we want, and for it to communicate back to us and act.

For another thing, updating software to fix bugs or add new features is far easier and cheaper than updating the underlying hardware.

Furthermore, AI systems are too complex to design completely in hardware. Take machine learning (ML) models…

ML algorithms search huge amounts of raw data to find connections that humans would miss. Then they use those connections to make predictions — about which patients are at higher risk of disease, whether a cyberattack is taking place, if an earthquake is likely, and much more.

Feeding these AIs with data through software is easy. It’s like providing data to any other app.

Hardwiring the data into the hardware, on the other hand, would be so expensive and time-consuming as to be practically impossible. And it wouldn’t allow the AI to learn anything after it was finished.

Flying Under the Radar

At the moment, Wall Street is focusing its attention on AI hardware and search engines.

But a certain software company is flying under its radar.

This company provides organizations with a centralized and scalable “data-warehousing” solution. In other words, it allows clients to store, process, and analyze vast amounts of data, in whatever format the data exists.

That data can be structured, meaning it comes in standardized packaging such as spreadsheets.

But the firm’s data platform also supports processing and analyzing unstructured data, such as video clips or audio recordings. It even supports streaming data into the “warehouse” for live processing.

Crucially, the platform allows for simple data-sharing across different organizations. It even has a “Time Travel” feature allowing clients to roll back their data to the past for easy auditing or data recovery.

This data-warehousing architecture is designed for the cloud, and can run on any of the big-three data providers: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform.

Most importantly, it’s known for being exceptionally easy to use, allowing clients to quickly get to centralizing and analyzing their data, rather than worrying about maintaining hardware and software, maintaining data security, and training employees in the deep details of data engineering.

Just a few weeks ago, this firm cut a deal with Nvidia Corp. (NVDA). Under the agreement, the software firm’s clients will be able to use Nvidia’s advanced AI-training models on the data stored in the firm’s cloud-data warehouse.

This marks a massive increase in the analysis the firm offers. Now they can use state-of-the-art AI to extract even more value from their data.

All the while, clients know that their proprietary data remains in their control, and neither Nvidia nor anyone else has access to it.

It’s like I keep saying. AI is poised to permeate the entire global economy and hand investors outsized gains — if you know where to look.

The Trade

The firm’s earnings growth over the last three years has been weak.

But that’s because this aggressive company has been investing in its next stage of growth.

Now, with AI as a catalyst, earnings are expected to rise this year by 132%.

Even at one-fourth that rate, we’d still see an earnings double in just over two years.

I really hope you’re a Pro member, so you can get the ticker for this stock and give it a look!



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Cheers and Good Investing,

Chief Investment Officer
Trend Trader Daily

Tags: ai software