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Sunday, February 11, 2024
Where the Next A.I. Stock Winners Hide
Like finding a needle in a haystack at light-speed…
Note from Michael Salvatore, Editor, TradeSmith Daily: The A.I. trade of 2023 was simple: buy quality semiconductor stocks. AMD, Nvidia, Super Micro Computer, and more caught all the attention.
But according to Luke Lango, senior investment analyst of Early Stage Investor at our corporate partner InvestorPlace, 2024 will set the stage for an even more powerful sector surge.
It's all tied to the fast-approaching breakthrough of Artificial General Intelligence (AGI) — which will unlock unfathomable potential in the field.
This Industry Could Produce the Biggest AI Stock Winners
By Luke Lango, Senior Investment Analyst, Early Stage Investor
Believe it or not, artificial intelligence (A.I.) is becoming as influential as the internet was in the 1990s, promising major economic impacts.
The "smart money" is putting significant investment behind myriad A.I. startups, which further fuels the comparisons to the Dot-Com Boom. Just take a look at the trajectory of internet stocks in the '90s:
Much like the internet did for efficiency and automation, A.I. is set to transform shopping, work, and travel, among many other industries.
The biggest differentiator between these two eras is that the A.I. Boom is unfolding much faster.
As a result, the only investors making money right now are those who are invested in A.I. stocks. For retail investors, this is your golden ticket to potentially life-changing wealth.
And there's one industry in particular that is in for a major A.I.-related shakeup…
For the first time that I've ever heard of... a bubble is about to burst on a schedule.
Yes, we know the exact date when everything is going to change in the financial markets.
The world will be divided. There will be the people who got out ahead of time and make massive gains. And the people who got out afterward, losing years of savings in the process.
As usual, the rich and elite are already way ahead of this trend.
When the $6 trillion bubble pops, you want to be with them.
For the past few months, most A.I. headlines grabbing Wall Street's attention have been centered around companies like Nvidia (NVDA) and Microsoft (MSFT). But the biggest A.I. stock boom is happening in an entirely different sector. And it's going unnoticed by the mainstream media.
I'm talking about biotech stocks.
In about three months, the SPDR S&P Biotech ETF (XBI) has soared more than 35% from its October 2023 lows.
Why? A.I.
The application of A.I. in biology holds the potential to unlock enormous economic value for one simple reason — data.
The more data, the better the A.I.
It's that simple.
And when it comes to the human body, there is no dearth of quality data. In fact, there is more high-quality data than anywhere else on Earth.
Humans — like computers — are really nothing more than a bunch of data strung together.
At their core, computers are just a bunch of 1s and 0s coded in sequence, with each number corresponding to a certain action for the computer to perform. Humans, similarly, are a bunch of As, Gs, Cs, and Ts strung together — or the four base types found in human DNA molecules — with each determining a person's characteristics, traits, and even actions.
Apply A.I. to all that data, and you will change the world.
The A.I. Revolution Applied to Medicine
The human body is the greatest mystery of the modern world. A.I. has the potential to solve this mystery and, by doing so, address numerous issues that affect all humans.
Consider the following: Developing a new, successful drug typically requires about $900 million and 13.5 years.
The drug development process is so costly and time-consuming that companies cannot afford to advance many drugs. This results in a significant shortage of drug candidates and programs, despite the vast possibilities presented by human biological data.
However, A.I. could significantly reduce the time and cost of this process.
The search for new drugs takes a long time because the universe of biological data is enormous. Scientists must exert considerable effort to sift through the data, identify the root causes of diseases, and develop compounds to counteract those diseases.
A.I. has the capability to automate this entire process. It can map genetic data, pinpoint mutations, and conduct simulations to discover the appropriate compounds to counteract those mutations, all with near-instantaneous speed.
Researchers could use A.I. to identify new drug candidates much more quickly than is currently possible.
This is already occurring.
Last year, the Japanese pharmaceutical company Takeda Pharmaceutical (TAK) acquired an experimental psoriasis drug for $4 billion — a drug that was developed in just six months with the aid of A.I.
Takeda is not the only company making strides in this area.
Other pharmaceutical giants are actively employing A.I. technology for drug discovery.
The era of A.I.-powered drug discovery begins now.
Research firm Deep Pharma Intelligence estimates that investments in the field of AI-powered drug discovery have tripled over the past four years to nearly $25 billion. Morgan Stanley believes this tech will lead to an additional 50 novel therapies being brought to market over the next decade, with annual sales in excess of $50 billion.
In other words, a $50 billion A.I. drug discovery revolution starts now.
Is your portfolio positioned for it?
If not, you are on the wrong side of the A.I. Boom, and you will be stuck on the losing side, potentially forever.
Revolutionary approaches to drug discovery in healthcare are just the beginning…
A recent breakthrough from OpenAI is propelling us toward the realm of artificial general intelligence (AGI), which marks the start of what I am calling the "A.I. Endgame."
This pivotal shift presents a window of opportunity that savvy investors cannot afford to miss. To get ahead of this upcoming endgame, it is imperative to act swiftly—before Feb. 29.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
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