Saturday, July 29, 2023

AI is Hot – Here’s What Comes Next

AI is Hot – Here's What Comes Next

Investors are absolutely wild for artificial intelligence (AI) these days. And with good reason. There are some legitimately cool things happening with AI – developments that are advancing the technology, and making people a lot of money.

In the last few months alone, AI ignited a stunning earnings report for Nvidia (NVDA)... launching the chipmaker into the "Trillion-Dollar Club."

AI headlined a product launch for Salesforce (CRM)... letting that company raise prices for the first time in seven years.

And Microsoft (MSFT) seized upon the instant name recognition of ChatGPT to add cachet to its own AI product rollout.

That's all great.

And now we're ready to take the next step in computing.

AI is progressing so fast, it's about to slam into the upper limit of what today's hardware can do. In theory, AI developers can devise the most intricate, powerful algorithms conceivable.

But they'll remain just that – a theory – until computers become more powerful.

The solution: Quantum computers.

Futuristic, yes. But it's happening right now. Just this month, a Google research team declared "quantum supremacy" for its new quantum computing chip, saying it can do instantly what would take existing supercomputers 47 years to perform.

All built on a tiny device of just 70 quantum bits, or "qubits."

As advanced as these "qubits" are, the reason they're so great is actually simple. All the computer chips we use today still operate in binary mode: 0s and 1s. So, they can only run one calculation at a time: yes or no. But qubits can do yes, no, or maybe. This lets the quantum computer run multiple scenarios/computations at the same time.

Imagine what we can do with a computer that's a few MILLION times more powerful than what we have today.

You know the Japanese physicist Michio Kaku? A white-haired professor and an icon in his field, Kaku says that "the chatbots that are a revolution in software and then quantum computers, which are a revolution in hardware – when they get together, watch out."

But before you rush out and buy shares of Alphabet (GOOGL), we've got a few more years before quantum computers are actually available to most of us.

Plenty of time for people to debate all the big philosophical questions this raises.

For me, I say: Let's not get bogged down by our feelings about super-powerful AI.

When a major innovation comes along like this, there's only two outcomes: We can either try to beat them – or join them.

When I used to do tech-investing presentations for hedge funds, I used to show slides a lot like the one below showing the historical progression from the mechanical revolution...to the industrial revolution...to the information revolution... and finally to the AI/data revolution.

We are already embarking on that Fourth Revolution today, and I'm inspired by what I'm seeing.

I'm a computer guy – this is what I do. I put my family's food on the table (and take them to Europe, pay for college) by finding opportunities.

Big ones like AI. Timely ones – like the strongest sector of the moment. Targeted ones, like quality companies whose shares are being bought by Big Money Wall Streeters.

I look for the best stocks in any market condition. And I find them by running my Quantum Edge system on over 6,000 stocks a day...far more than our "dumb" human brains can handle.

And one day, we will ALL be investing in quantum computing, because this is where we are heading next.

We may as well start to prepare now.

Where Do We Find The Winning Companies For Quantum Computing?

At this point, we don't know who the winners are going to be. We can't.

But we can approach it the way successful investors have always approached new technologies.

1. Which Legacy Tech Companies Are Getting Involved?

If you've been hearing about quantum computing in the mainstream news today, it's probably from companies like Microsoft.

In June, Microsoft, which has a "vice president of advanced quantum development," announced that her team plans to deliver a quantum supercomputer in the next 10 years.

IBM (IBM) says it already has a quantum computer that can run 433 qubits – so, that's another six times greater than what Google just achieved.

And it's gunning for a 4,000 qubit processor by 2025.

Microsoft, Google, Tesla (TSLA), Amazon (AMZN)... Basically, if you want exposure to quantum computing, you can bet that the "Magnificent Seven" companies will be involved in any way they can.

2. Picks and Shovels

I'm sure you've heard the old cliché about "picks and shovels" investing, referencing the California Gold Rush. Very few of the prospectors themselves made their fortunes by panning gold... But the guys who sold them all the equipment they needed sure did.

In this case, we already know the most important equipment needed for quantum computing:

Supercooling.

Researchers keep their quantum computers inside refrigerators...and not the type in your kitchen, either. They're kept just above absolute zero, or -459 degrees Fahrenheit.

So, for investments, we can look at the materials these researchers are using to do this...liquid nitrogen, things like that.

There's other aspects of the environment, such as vibrations, and impurities in the materials used for the chips, which cause problems for today's quantum computers. Anyone making a more efficient, effective device is certainly one to watch.

For now, we'll keep an eye out for companies that can overcome these obstacles... it'll probably happen before we think.

And with my stock system, which I built using AI and predictive analytics long before they were a "thing," we're always sifting out the companies – in any industry – who can line up the fundamental factors and achieve the technical stock characteristics they need to succeed as businesses and investments.

In my Quantum Edge services, I've found a couple buys I'm really excited about, and I've got my eye on more. To see my latest buy alert – and get on the list for all the trades going forward – watch this to learn more and get involved in Quantum Edge.

Talk soon,

Jason Bodner
Editor, Jason Bodner's Power Trends

866.385.2076 | support@tradesmith.com

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Saturday, July 29, 2023