Editor's note: Don't listen to the "naysayers"... Despite artificial intelligence ("AI") driving huge market growth right now, many people remain skeptical about this technology in the long term. But Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – believes we're still in the early stages of AI's positive impact on the markets. In today's Masters Series, originally from the November 25 issue of the free Chaikin PowerFeed e-letter, Marc explains why you should avoid listening to AI skeptics...
The Naysayers Don't Care If You Miss This Trend By Marc Chaikin, founder, Chaikin Analytics This bull market cleared a major hurdle... AI chipmaker Nvidia (NVDA) recently reported third-quarter earnings. It beat guidance on earnings per share and revenue. But there's something more important... Demand. You see, Nvidia's chief financial officer said that demand for the company's newest generation of chips "is expected to exceed supply for several quarters in fiscal 2026." And analysts, like those at Goldman Sachs (GS), agree. This is important because it reveals how strong this new AI trend is. Remember, the growth in AI is more than just chatbots like ChatGPT. We're talking about the efficiency that machine learning will bring to just about every sector. That's an incredible tailwind behind this market. Nvidia's latest earnings report proves that this is more than just a flash in the pan. In fact, we're still in the early stages where companies race to buy the chips they need to build infrastructure. But it's more than just one company's earnings report that proves this... Menlo Ventures is one of Silicon Valley's oldest venture-capital firms. And according to its data, spending on AI is soaring... The firm estimates that AI business spending came in at roughly $2.3 billion in 2023. Now, Menlo Ventures says that number is up to $13.8 billion so far this year. That's a 500% increase. And we're still at the very early end of this curve. Remember, it takes time for new innovations to create real productivity gains. We saw this with the early days of the Internet browser. Many early websites had little to no function. And then, during the dot-com boom, they had growth without a business plan. At the time, there were countless naysayers – folks who watched the world changing around them – that insisted it wasn't happening in real time. But history is full of people that missed the world's biggest trends... Back in 1962, Decca Records famously passed on The Beatles. The label executives reportedly told the band's manager something along the lines of "guitar groups are on the way out." That comment certainly missed the mark. The Beatles are at the top of the list for best-selling artists of all time. Steve Ballmer, Microsoft's (MSFT) CEO after Bill Gates, famously didn't like Apple's (AAPL) iPhone. As he said in 2007, "There's no chance that the iPhone is going to get any significant market share. No chance." And in particular, he said the lack of a keyboard meant the device wouldn't appeal to business customers. Obviously, history proved Ballmer wrong. Today, Apple is worth a staggering $3.6 trillion. And its iPhones are everywhere. Folks, there will always be naysayers. Their curmudgeonly claims litter history. Now, I don't pretend to have a crystal ball... But I do have data. And the data tells us that the AI boom is a major tailwind in this market. The S&P 500 Index is up around 25% this year. That means it's on track to post one of its best-performing years since 1950. And regular readers already know that I expect the year to finish strong for stocks. We've also seen that the demand for AI chips is huge. Businesses are buying the tools they need to build AI infrastructure. That means we're still in the early days of this trend. It will take time for everything to flesh out. Along the way, there will be naysayers. They don't care if you miss the trend... or if the market passes you by. Don't let them stop you from building your investing wealth. Good investing, Marc Chaikin
Editor's note: This isn't the only trend to keep your eye on as we approach 2025. One investor and former adviser to President-elect Donald Trump argues the divide between rich and poor in America is one our greatest threats. So he's going on camera on Thursday, December 5 to share how you can set your wealth up to benefit as this new administration settles in. Click here for the full details... | 
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