Be Careful With This 'Next Big Thing'

"Generative AI" is all the rage these days... For starters, Microsoft (MSFT) is dumping a lot of money into the space. [Chaikin PowerFeed]( Be Careful With This 'Next Big Thing' By Marc Gerstein, director of research, Chaikin Analytics "Generative AI" is all the rage these days... For starters, Microsoft (MSFT) is dumping a lot of money into the space. The tech giant invested $1 billion into industry leader OpenAI in 2019. Two years later, it held another investment round. And last month, Microsoft poured in $10 billion more. Microsoft is talking up efforts to bring this technology to its Bing search engine. And market bulls think OpenAI can help it chip away at Alphabet's (GOOGL) massive lead in the search-engine world. That's just the beginning, too... In short, this artificial intelligence ("AI") can create new images, text, audio, video, and more. That could be a lot of fun for computer artists, poets, music composers, and others. But as I'll show you today, it's an evolving technology. And the Power Gauge sees that... Recommended Links: [March 2: A Rare Market Event 50 Years in the Making]( A predictable shift is playing out once again, which could hand you huge profits if you know what's coming. A small number of folks have been preparing for this exact moment, but 99% of investors will miss out completely. Don't get left behind – [click here for the full details](. [Pentagon Consultant: Here's How Biden Wins Landslide Reelection]( This forensic accountant who consults for the U.S. Pentagon, FBI, and Marines says a surprising July 25 "twist" could make many Americans vastly wealthier... but also hand Joe Biden a landslide reelection win. The full story, including four steps you can take to protect your money, [is detailed here](. OpenAI's ChatGPT tool could be revolutionary. So last week, I took it for a spin... At first, I could see why this technology impresses casual observers. It gives clearly written, seemingly comprehensive answers to factual questions. But as I dug deeper into ChatGPT, I realized it's not flawless... You see, it can't give opinions. And it misses details that a human expert might offer. For example, I asked ChatGPT about the disadvantages to condominium living... It was OK with the basics. But it missed how hard it can be to deal with residents who don't pay. (Condos deal with property owners and deeds, not leases and tenancies.) Next, I asked ChatGPT to describe the stock market. Then, I asked the tool to do it using Shakespearian language. And finally, I asked for a Chaucer-like description. The first answer made sense. But the second answer wasn't Shakespearean. It read the way someone who never read Shakespeare imagines it would be. And the Chaucer version looked pseudo-Shakespearian. After that, I fiddled some more with ChatGPT. That's when it hit me... I've seen less-fancy versions of this stuff for decades. These AI databases are a lot like the stock screeners I've used since the 1980s. And legal-research platforms like Lexis have long accepted plain-English questions as well. Now, stock screeners and legal platforms have become much more powerful over the decades. So we can expect a lot of progress with generative AI in the coming years. But that makes me wonder... Where are the profits? And when will we start seeing them? For example, C3.ai (AI) is one of the only publicly traded stocks in the space. It's a pure-play enterprise AI company. And most significantly for us, it's burning through cash... The company's annual cash from operations has plunged over the past few years. This metric has fallen from around negative $35 million in 2019 (the first year C3.ai reported publicly) to roughly negative $160 million over the trailing 12 months. C3.ai's losses make it a ["basement kid"]( that needs a short leash. And the Power Gauge realizes that. Despite the potential of this technology, it's "neutral" on the stock today. For what it's worth, the Power Gauge is also "neutral" on Microsoft. Given its vast reach, the company comes with much lower risk. That's likely the best way to play this trend... Look for situations where larger companies like Microsoft are incubating generative AI. But for now, the bottom line is simple... Like any "next big thing" in the world, it's best to let the numbers and the Power Gauge guide us through the minefield. And today, it's best to take a wait-and-see approach. Good investing, Marc Gerstein Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.29% 9 16 5 S&P 500 +0.34% 143 267 89 Nasdaq +0.72% 32 50 18 Small Caps +0.37% 505 957 426 Bonds +0.28% Consumer Discretionary +1.20% 24 23 9 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bullish. Major indexes are all bullish. * * * * Sector Tracker Sector movement over the last 5 days Energy +0.50% Materials +0.20% Staples -1.43% Industrials -1.78% Financial -2.01% Information Technology -2.15% Health Care -2.93% Discretionary -3.31% Utilities -3.39% Communication -3.50% Real Estate -3.58% * * * * Industry Focus Homebuilders Services 24 10 0 Over the past 6 months, the Homebuilders subsector (XHB) has outperformed the S&P 500 by +9.71%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved up 1 slot over the past week. Top Stocks [rating] MHO M/I Homes, Inc. [rating] CCS Century Communities, [rating] TMHC Taylor Morrison Home * * * * Top Movers Gainers [rating] UNP +10.09% [rating] ENPH +5.94% [rating] SEDG +5.89% [rating] TSLA +5.46% [rating] LYV +4.43% Losers [rating] DISH -8.06% [rating] EQT -3.46% [rating] SCHW -3.38% [rating] HSIC -3.04% [rating] ETSY -2.82% * * * * Earnings Report Reporting Today Rating Before Open After Close AZO NCLH, SJM, TGT, XRAY A, FSLR, MNST, ROST AAP, SRE HPQ, VRSK No earnings reporting today. Earnings Surprises [rating] ZM Zoom Video Communications, Inc. Q4 $1.07 Beat by $0.23 [rating] OXY Occidental Petroleum Corporation Q4 $1.61 Missed by $-0.22 [rating] WDAY Workday, Inc. Q4 $0.99 Beat by $0.09 [rating] BMRN BioMarin Pharmaceutical Inc. Q4 $0.36 Missed by $-0.03 [rating] AES The AES Corporation Q4 $0.49 Beat by $0.03 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. 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