Fear AI or Love It: This Is How You Find Opportunity Does AI scare you? Have things gone too far? Is this the beginning of the end? Well, it depends on who you listen to. Some think that AI is the savior, while others think the reckoner. Either way, we all need to buckle our seatbelts and prepare for a wild ride. If you ask me, though, just know I’m an eternal optimist. I consider the alternative a waste of my energy. So, I’m going to give you a smoother ride into the AI future. I say, if you can’t beat ‘em, join ‘em. And we definitely can’t beat Artificial Intelligence. The best way to join ‘em is to identify the companies that will help us as we enter the age of AI – and profit from them. We’ve seen this many times throughout history, too. In the 1800’s, factories were going to end employment for America. The birth of flight meant the end for railways. And as for the most recent comparison, my dad taught me about what he went through in the year 2000. That was the “.com” era. The internet was barely fifteen years old, and existing machines at the time had limited computing power. But everything started relying on these new machines. The coding capabilities at the time provided the software for banking, government, corporate record keeping, and just about every other aspect of life. To maximize efficiency of the computer’s limited operating power, programmers wrote code for year dates as two digits. The year 1999 was coded as 99… and 2000 was coded as 00. You probably see where I’m going with this. Fear and panic set in quickly, because by mid-1999 programmers realized that all computers might crash once the calendar year turned to 2000. No one really knew whether the computers would read the year as 1900 or 2000. Y2K became the new Armageddon. But we now know that, of course, nothing happened. Planes didn’t fall from the sky, power plants and banks didn’t fail, and the world didn’t end. Talk about wasting energy. The irony is people were worried about the wrong problem. What We Can Learn from the .Com Era The real issue began with the .com frenzy. In 1985, the U.S. government started to issue .com web URLs. During the 1990s, new companies and startups that joined the computer age all started their own websites. Appetite for more and more websites grew, and suddenly it was “anything goes.” So much so that new companies with no assets, no earnings, no profits, and unimaginable debt floated stock issues. This led to one of the biggest stock market booms in history… only to crash spectacularly in 2000 as the earnings were nonexistent and many companies inevitably failed. Dad told me people were immediately in panic mode. Many hoarded food, cash, and other essentials as they thought the world would come to an end – much like Y2K. Only, of course, it didn’t. But when you look closer at what happened, we can learn a really important lesson about investing, especially during this AI boom. Many companies went bust and got delisted from the market that had infinite P/E ratios. Meaning: the stocks traded at infinite multiples of earnings because the company had no earnings. But here’s the kicker. Companies with sound fundamentals and good balance sheets DID survive and prosper. That’s the same logic we need to approach this AI boom with. And it’s the same logic I approach every investment with. Where Should We Invest During the AI Era? We need to look carefully at AI stocks, as some have those same .com characteristics. But others are massive successes, as we’ve seen with Nvidia (NVDA) and Super Micro Computer (SMCI) – in fact, SMCI was a massive success for my Quantum Edge Pro subscribers, producing 250% gains in just a few short months! I strongly believe that AI will serve humanity well. It will help cure disease, solve ecological crises, and improve just about every aspect of our lives. And there will be companies behind that engine of progress. Companies that are under-the-radar now but may become the NVDA’s of the future. These are the stocks to invest in. So, what are they… and how do we find them? AI and cloud servers need massive amounts of energy. I dug into my Quantum Edge system to look for companies that are prime candidates to provide the digital infrastructure that AI needs to operate. About 20 emerged, but only a couple came close to my strict criteria. 
While not perfect, I was curious about one stock on the list: Vertiv Holdings (VRT). Its Quantum Score is below my optimal buy zone of 70 to 85, but its fundamental score is a healthy 70.8. VRT’s Quantum Score is dragged down by the weak technicals, which is due to recent market volatility that we expect during August and September. 
Source: TradeSmith Finance Despite not being a slam dunk, Vertiv does look the most promising. It’s a provider of digital infrastructure and will serve the AI explosion well. As of today, it doesn’t meet my strict criteria, but this stock might indeed be a great candidate in the future. It’s certainly one to keep an eye on; I know I will. So, I’ll ask again. “Does AI scare you?” For me, not at all. The future of AI only excites me. Companies like Vertiv excite me. And companies like SMCI, the number one AI stock of the past year, excited me when I recommended it to my Quantum Edge Pro subscribers a year ago. And it was exciting to see the portfolio capture 250% gains. Whether VRT goes on to be an AI powerhouse or not, there will definitely be other companies that will. When we know what to look for in a high-quality stock, like superior fundamentals, strong technicals, and those flashing green lights showing Big Money is buying in, we can use AI to our advantage by investing and growing our wealth. Talk soon,  Jason Bodner
Editor, Jason Bodner's Power Trends | 
Post a Comment
0Comments