America's $50 Billion AI Advantage

And how two related stocks rate… Published By Money & Markets, LLC. April 09, 2024 Published By Money & Markets, LLC. April 09, 2024 [Turn Your Images On] [Turn Your Images On] From The Desk of [Adam O'Dell]( Editor, [Money & Markets Daily]( America’s $50 Billion AI Advantage Money & Markets Daily, Going long on American ingenuity has been the most profitable investing trend in the world for ages. From automobiles in the early 20th century … to the internet at the turn of the 21st …  and now artificial intelligence (AI)… American businesses always lead the charge when it comes to cutting-edge technology. And early investors typically make a fortune as a result. Throw just a few thousand dollars into Microsoft, Apple or Nvidia at the right time, and you’ll find yourself counting your millions a few years later. These are the kinds of profits investors spend their whole lives searching for. It's why hot tech stocks command sky-high premiums. It's also the reason why wealthy foreign investors are piling into American tech stocks. Foreign ownership of American stocks shot up six-fold between 2002 and 2021, according to the Wharton School of Business. But there’s one last speed bump on the road to America’s continued AI dominance: Semiconductors. --------------------------------------------------------------- [Turn Your Images On]( [$25 Stock to Fuel the AI Market Boom of 2024]( One secretive company’s new technology is poised to disrupt the AI market – a market that is projected to grow from roughly $500 billion to $200 trillion. That’s a surge of 39,900% over the next six years. Today, you can invest in this one-of-a-kind company for just $25 a share. [Click here for all the details.]( --------------------------------------------------------------- The New 21st Century Arms Race It’s going to take massive amounts of computing power to unleash the next generation of AI. So we’re going to need more computer chips than ever before. Right now, almost all of our best semiconductors are manufactured in the tiny island nation of Taiwan. I won’t get into the specific geopolitical implications of that here (though they are fascinating). But it means we’re almost wholly reliant on a foreign nation for one of our economy’s most critical resources. And that country also happens to be under increasing pressure from its neighboring China. We all felt that dependence during the post-Covid chip shortage. And the government committed to taking action… The CHIPS and Science Act is the Biden Administration’s answer to our foolish dependence on foreign manufacturers — particularly in the semiconductor industry. Signed into law on August 9, 2022, the CHIPS Act is providing more than $50 billion for American semiconductor research, development, manufacturing and workforce development. It further offers a tax credit of 25% for companies that invest in chipmaking equipment. Already, a number of large tech companies are announcing plans to increase investment in the space. Memory-chip maker Micron Technology Inc. (Nasdaq: MU) jumped on the opportunity with a pledged $40 billion investment in production capacity, which promises to increase the global market share of American-made memory chips from 2% to 10%. Qualcomm and GlobalFoundries were also quick to form a partnership that will include a $4 billion investment in the latter’s New York facility, with projections of growing total production by 50% over five years. And now, even Taiwan Semiconductor (NYSE: TSMC) is beginning to ramp up its stateside production… --------------------------------------------------------------- [Turn Your Images On]( From our Partners at Banyan Hill Publishing. [Congress Fast-Tracks Bill to Unleash AI Energy]( In an unprecedented bipartisan move, Congress recently passed the ADVANCE Act to pave the way for a breakthrough called AI energy. A new form of energy that could finally make America energy independent. [The full story is here]( --------------------------------------------------------------- Not All Chipmakers Are Created Equal Yesterday morning, executives from TSMC’s Arizona subsidiary finalized an agreement to receive up to $6.6 billion in cash incentives. They’ll also be eligible for an additional $5 billion in loans under the CHIPS Act. If that sounds like a lot of money, consider that TSMC is investing $65 billion to build three new fabrication plants in Arizona. According to Commerce Secretary Gina Raimondo, these new plants will bring “the manufacturing of the world’s most advanced chips to American soil.” Building these new facilities will reduce the risk of another prolonged chip shortage and virtually eliminate interference or embargos from China. That means smooth sailing for America’s rapidly growing AI industry. But it DOESN’T mean that all chipmakers are created equal. For example, take a look at the Green Zone Power Ratings for TSM: [Turn Your Images On] A "Bullish" 72 out of 100 is a solid rating, especially for a business that already has a near-monopoly in its industry. There’s clearly plenty of room for TSM to keep growing if management can keep things on track. Meanwhile, here’s how the MU rates: [Turn Your Images On] 31 out of 100, with negative earnings per share. Each stock’s Green Zone Power Ratings are based on a combination of fundamental and technical factors. And as you can see above, MU is a bad investment on both fronts.  Even with billions in government aid pouring into the company, shares are still likely to underperform over the next 12 months. That’s why [I recommend checking]( Green Zone Power Ratings early and often when you’re thinking about investing, you’ve already invested, or you just read about a stock in a news story. Because two companies like these are often mentioned in the same breath on CNBC or in the Wall Street Journal … even though they’re vastly different investments. The race for semiconductor dominance is going to be a dominant mega trend in these early stages of the global AI boom. And that’s great news if you’re invested in the right chipmakers. Stay tuned for more updates as this trend develops. (For more on the market’s top AI investment — a company that the world’s top Tech Titan has labeled “the Next Google” — check out my special [feature presentation HERE](. I strongly recommend taking action on this opportunity BEFORE May 5.) To good profits, [Adam O'Dell]( Editor, [Money & Markets Daily]( --------------------------------------------------------------- [Turn Your Images On] The Inflation Battle Swings Toward the Fed Last month's Global Supply Chain Pressure Index (GSCPI) gave Federal Reserve officials cause for concern. The Fed created this tool after inflation soared in 2020 to spot potential problems in the supply chain before they affect consumers. The index has been on a downtrend since peaking in December 2021. Negative values in the data show deflationary pressures. Last month's reading (+0.10) indicated that the battle against inflation isn't over. The Fed will be watching and worrying about this data point. The GSCPI dipped to -0.27 in March, and the February reading was revised to -0.11. This is the kind of news the Fed wants to see, and it makes a rate cut by July almost certain. That said, investors need to consider protective positions, perhaps with put options on index exchange-traded funds (ETFs) like the SPDR S&P 500 ETF Trust (NYSE: SPY). — Mike Carr, Chief Market Technician, Money & Markets [Turn Your Images On] [(Click here to view larger image.)]( --------------------------------------------------------------- Check Out More From Money & Markets Daily: - [HOW 1 TECH TITAN TURNED GARBAGE BAGS INTO BILLIONS]( - [SUPERCHARGE WHAT YOU KNOW WITH OUR POWER RATINGS]( - [THE AI GOLD RUSH IS ON]( --------------------------------------------------------------- [Turn Your Images On]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. 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