Friday, June 23, 2023
Artificial intelligence (“AI”) is becoming an overnight success.
All it took was 60 years of trial and error!
I’m not being flippant here. The fact is, AI’s an unstoppable force that’s having a profound impact on the world’s economies. It will transform just about every industry you can think of.
Consider a report by McKinsey & Co. that found AI has the potential to deliver additional global economic activity of around $13 trillion by 2030.
And today, I’ll introduce you to an exciting company that’s leveraging this trend to grow its earning by 65% this year.
To hear Wall Street and Big Media tell it, AI is brand new.
I get it. ChatGPT, the first consumer-facing application for a mass audience, only came out last November. ChatGPT allows you to have human-like conversations with a chatbot, and can be used for everything from research, to write articles and blogs.
But as often happens in tech, the industry’s roots are humble. AI got its start in the summer of 1956, when 11 mathematicians and scientists gathered for a 10-week workshop at Dartmouth College.
After this seminal meeting, the group predicted a machine as smart as a human would be produced in no less than a generation.
Then, because of the wrenching complexities involved, AI produced a whole lot of nothing.
In fact, those lost decades are often referred to as the “AI Winter.”
But now, everything has changed…
In recent years, AI has begun moving so rapidly that it’s seeping into every aspect of our lives — from how we interact with our voice-activated digital assistants, to how biopharma discovers new drugs.
Most of it takes place in the background. If you’ve been on Instagram, made plane reservations, or used credit cards, odds are good that AI helped — without you even knowing it.
The sector began taking off only a few years ago, as related technology platforms came into their own. We’re talking things like machine vision, deep learning, robotics, automation, and natural language processing that, taken together, can make computers reason much more like humans.
As much as I believe in the profit potential of the global AI boom, I must note that it comes with a big challenge. The fact is, there are few pure-plays available where we’d feel confident investing our money.
The reason is simple: the aggressive AI race is happening behind-the-scenes.
You see, big tech firms have been buying innovative Silicon Valley AI startups for more than a decade. That means these AI innovators will never IPO as distinct players.
CB Insights reports that, as of last year, there were 100 “promising” AI startups. But history shows they won’t remain independent for long.
Startup expert Venture Beat reports that, in 2020, there were 13 AI-related buyouts. In 2019, 14 AI-related startups were bought by just the five largest tech firms.
Data compiled by Statista shows that, between 2010 and 2021, Big Tech bought a combined 123 AI startups, and this has been accelerating in recent years.
All of which brings me around to how we started the conversation today…
As I see it, the current market for AI is very hyped-up.
So you need to be careful not to pounce on every “opportunity” Wall Street throws your way. Bear in mind, many media headlines are designed to get you to click, not necessarily to help make you money.
Now you can start to understand why I look at AI as a key enabling technology. In other words, for dozens of tech companies, AI can be used to improve efficiencies and profit margins, serve as a competitive advantage, and help develop new products and markets.
With that in mind, I think it pays to look at a few key aspects of artificial intelligence, since, in reality, it’s a web of tools:
And I’ve uncovered a tech leader that’s made AI a part of its DNA at least since it went public back in 2014.
This firm’s business model is simple. It uses AI and other tools to help clients convert almost any long-standing process into a digital application.
Investing in AI sure seems to have paid off for it. Indeed, the company has served as a business case study by Harvard, MIT, and Stanford.
We can clearly see this excellence in its bottom line. This year, the company is forecast to grow earnings by 65%.
To put that in perspective, that’s 45% more than the 2023 expected earnings growth for Apple Corp. (AAPL), Alphabet Inc. (GOOGL), and Facebook owner Meta Platforms (META).
Add it all up and you can see why I think AI is an unstoppable trend that can hand investors handsome rewards — if you know how to play it.
If you’d like to get the ticker for this fast-growing stock so you can learn more and potentially invest in it, consider becoming a Pro member.
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Cheers and Good Investing,
Chief Investment Officer
Trend Trader Daily