While stocks have sharply corrected under tariff fears and the Fed’s missteps on policy, make no mistake the AI revolution continues to charge forward.
Over the weekend, the Trump administration signaled exemptions for critical AI inputs from China, while Nvidia announced it has started production on its most advanced AI chips in Arizona, and will be building “supercomputers” in Texas in 12-15 months.
This “onshoring” is new global capacity, and that will be like pressing the accelerator on the AI revolution.
And with that in mind, one of the handful of people working on the frontier of this technology revolution said this about the state of AI back in February …
Elon is talking about teetering on the edge of artificial general intelligence (AGI). It’s where the machine can reason like a human or better – in any domain. The next stage, it can constantly improve itself and with no downtime.
Related to that, remember, earlier this year Jensen Huang (Nvidia founder, CEO) said “the ‘ChatGPT moment’ for general robotics is just around the corner.“
He said over the next several years, the combination of 1) agentic AI robots, 2) autonomous cars and 3) humanoid robots will become “the largest technology industry the world has ever seen.”
So agentic AI seems to be getting close (where the machine has “full agency”), fully autonomous cars are getting very close, and this year Tesla’s Optimus humanoid robots are expected to be working in the Tesla factory – with an aggressive plan to grow the humanoid robot population.
And with that, remember, Elon said years ago that the introduction of humanoid robots into the world, would mean “no meaningful limit to the size of the economy.” Jeff Bezos has recently echoed that view.
So, as the crowd obsesses over tariffs, tight money and political mudslinging, the real story is relentless ascent of world changing technology.
And as we’ve discussed often here in my daily notes, there is a wartime-like effort, by the U.S., to win the AI arms race.
With that, if you can look through the noise and pushback surrounding the Trump agenda, this broad market correction is an opportunity to buy the key stocks that are powering the AI revolution, on sale.
But isn’t this another tech boom/bust cycle?
For perspective, the AI revolution is as transformative, if not more, than the advent of the internet, but there are clear differences in the investment.
The dot-com bubble was fueled by a speculative mania.
Money was being poured into companies with little-to-no revenue (like a few hundred thousand dollars of revenue) – and valued on the basis of eyeballs (web traffic).
On the other hand, as a proxy on the AI revolution, if we step through our AI-Innovation Portfolio — we’ve built a 24 stock portfolio since launching in June of 2023, and ALL but one are profitable — not accounting tricks, legitimate net income.
That’s a big difference.
And the one company that isn’t profitable, is expected to be profitable this fiscal year.
And all have positive net cash (most in the billions of dollars).
This is a very different technology boom, and it’s still early.
If you want to own the stocks of the companies building the infrastructure to power AI, the companies delivering the capabilities of AI to hundreds of thousands of businesses, and the companies that will best leverage the productivity enhancements from AI, you can find them in our carefully curated AI-Innovation Portfolio.
Consider this: We added Nvidia in June of 2023, just when the AI revolution was kicking off. We exited on the catalyst of the 10-for-1 stock split announcement, after the announcement fueled a further surge in the stock.
So, we sold it last May for 184% return, at a P/E in the high 40s.
We recently re-entered Nvidia at a forward P/E of 21, down a third from its peak, trading back to its pre-split level — BUT, the company is now producing twice as much revenue, and twice as much profit, and the state of the AI-driven technology revolution is far more advanced than it was just 11 months ago.
So, this correction in stocks revalued Nvidia to a multiple very near the broad S&P 500 market multiple. That’s extremely cheap for a company with 78% year-over-year revenue growth and operating margins greater than 60%, with $35 billion of net cash.
The best investors in the world have built their careers in markets like this, buying when others are selling.
This is an opportunity to buy the technology revolution on a dip.
Here’s how you can join me…
✅The AI-Innovation Portfolio is about allocating to HIGH-GROWTH.
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✅You can join me by clicking here — get signed up, and then keep an eye out for Welcome and Getting Started emails from me.
Best,
Bryan
