The “Nvidia Effect” Will Unleash the Next Wave of AI Profits

[Inside Wall Street with Nomi Prins]( Maria’s Note: AI’s “take-off” moment is here. And the time to get in is now… That’s been Nomi’s message in these pages over the past few weeks. The biggest winner so far in the AI boom is U.S. chipmaker Nvidia. It takes a lot to move a $1 trillion company… And yet, Nvidia shares are up 192.1% this year. But here at Inside Wall Street, we’ve been warning against chasing AI stocks that are priced for perfection. And our colleague Colin Tedards agrees… If you haven’t heard of Colin, he’s a tech- and growth-stock investor. His popularity exploded on YouTube for his research into the world’s top tech stocks. Like Nomi, Colin believes it’s just the start of a much bigger AI boom. The gains will rival those investors made in the 1990s internet boom. But you need to look beyond the big names like Nvidia… --------------------------------------------------------------- The “Nvidia Effect” Will Unleash the Next Wave of AI Profits By Colin Tedards, Editor, The Bleeding Edge In 1999, business leaders around the world were asking the same question… “Should we have a website?” The answer seems obvious now. Of course, a business needs a website… But in 1999, the internet was still new. And it was hard to tell. Then, in 2007, business leaders were asking another key question… “Should we be on social media?” And the answer, once again, was yes. Today, most companies use Facebook, Instagram, LinkedIn, and TikTok to engage with their customers. And the companies behind these platforms are among the largest in the world. Now, another key tech question has arisen. And business leaders all want to know the answer. “Should we adopt AI?” As I’ll show you today, the answer will be another resounding yes. Companies will use AI to bring down costs… fatten margins… and boost profits. But it’s important to know where to invest now… and how to avoid overpriced names driven far too high by bullish traders this year. First, let me explain a bit more about why AI is such a massive opportunity today… Recommended Link [Former Presidential Adviser Blows the Whistle]( [image]( Why are President Biden’s Wall Street donors all buying the same stock? Discover a new law that “promises money” to companies like this one. [Click here.]( -- Fastest-Growing App in History By now, you’re likely aware of ChatGPT. It’s a form of generative AI. ChatGPT is the AI chatbot from OpenAI that has read the internet and can answer just about any question you ask it – just like a human would. It’s a massive triumph. Researchers have been tinkering with AI for more than 70 years. One of the earliest AIs was a program that learned how to play checkers back in 1952. Since then, AIs have translated languages… learned to drive cars and navigate roads… become the world’s best chess player… discovered new drug candidates… and guided unmanned probes to Mars. But those were all one-off use cases. Each AI existed to solve a specific problem. Today’s AI systems are different – and that difference will create a new wave of wealth for investors… as well as for society. The Race Is on to Adopt AI We can now train AI systems on giant datasets and have them perform a variety of roles. ChatGPT, for instance, can compose songs, answer exam questions, and write computer code. Specialized versions of it can be used as customer service agents… write marketing material… even provide live analysis on stocks and bonds. This flexibility means AI is accessible to nearly every business in the world. And just like in 1999 and 2007, they’re going to adopt it at scale. The CEO of IBM, Arvind Krishna, told Bloomberg AI will replace 30% of office jobs over the next five years. In IBM’s case, I calculated this would yield about $780 million in yearly savings. That would have boosted IBM’s 2022 profits of $1.6 billion by 48%. That’s the kind of margin expansion most CEOs only dream of. And when margins expand, profits go up. Share prices go up. And investors get richer. And it’s not just IBM. There’s a strong financial incentive to adopt AI across the board to boost profits. It’s why I’m looking beyond just a few big tech stocks to play the AI boom. Thousands of non-tech companies will soon start racing to adopt AI and make their businesses more profitable as a result. That spells opportunity for us as investors… Recommended Link [He Declined to Go on CNBC – Now He’s Finally Revealing His “Millionaire Secret”]( [image]( During the 2008 financial crisis, millionaire trader Jeff Clark stunned the world when he managed to double his readers’ money 26 TIMES… CNBC caught wind of this and asked Jeff to come on live TV to explain his secret. Jeff politely said no. And now, years later, Jeff is back to finally bring this secret into the light. …Revealing how anyone can collect returns of huge gains in just 8 days… in bullish AND bearish markets! And why you need to IGNORE 99.9% of the market, instead focusing on only ONE stock. [(ticker revealed here)]( Jeff says: “I am tired of watching as investors lose their shirts buying risky assets… even my OWN SON lost -60% in crypto & tech stocks… now I’m going to give him a [“Financial Intervention”]( to help him win his account back in 2023!” [Click Here to Watch Jeff Demonstrate This ONE Stock Secret.]( -- Follow the 7% Consulting firm PwC calculates that AI will add $15 trillion to the world’s GDP by 2030. That’s 16% of last year’s global GDP of $95 trillion. Most of the value added will come from increased efficiency. Work that AIs automate will be completed faster, cheaper, and more accurately than work humans alone can do. Already, investors are rewarding companies for just saying they’re adopting AI. Consulting firm Accenture found that when management mentioned AI on an earnings call, the chance that its share price would rise went up 40%. But Accenture also found that only 7% of companies were actually using AI to make more money. For those that were, the results were impressive. Companies in that group were able to grow their revenue 50% more than their peers, on average. For instance, a major solar panel installer uses AI on satellite images to automate planning. That shaves about 25% off its installation costs. And Procter & Gamble is using AI to cut its time and costs to develop new products. The company is asking an in-house AI to create a new soap formula that will save costs without sacrificing its cleaning efficiency. It can offer potential solutions that have a good chance of working. That cuts down on a usually lengthy and expensive experimentation process. Long story short, the 7% of companies using AI to build a better business are going to outcompete the 93% that aren’t. And that 7% isn’t as obvious as it looks. Look Beyond the Obvious Names The biggest winner so far in the AI boom is U.S. chipmaker Nvidia. It’s the world’s biggest supplier of the advanced semiconductors that make AI systems like ChatGPT able to process so much data so quickly. And Nvidia shares have more than tripled in value this year. That’s the power of being an obvious name at the start of this trend. But here’s what may surprise you. I do not recommend buying shares of Nvidia. With a market value now north of $1 trillion, it takes a lot to move this stock. The company must add $10 billion in market value to move the stock 1% higher. By contrast, if a stock is worth $10 billion, it only has to add $100 million in market value to have the same effect. Another problem is that Nvidia is priced for perfection. Its shares trade for a price-to-sales ratio of 34. That means you pay $34 as a shareholder for every dollar of sales the company has. That’s 4x higher than its nearest rival, Advanced Micro Devices (AMD). And when a stock is priced for perfection, even a small slip-up can lead to shares cascading lower. As a company, Nvidia has a bright future. But as an investment, its days of explosive growth potential are over. Recommended Link [Watch SHOCKING Footage of AI Facility with Ties to Elon Musk]( [image]( I recently traveled more than 3,000 miles and [shot this video outside what could end up being Elon Musk’s biggest secret.]( Most people don’t know about this facility, but it could be the most important AI project in the world. What’s happening inside these walls is so important that our government has declared it a matter of national security. [Click here to see the details because this will definitely impact you and your family.]( -- Back the Nvidia Effect Instead Fortunately, we don’t have to invest in Nvidia to benefit from its dominance. It all comes down to something I call the “Nvidia Effect.” When a company becomes as large and as powerful as Nvidia, every move it makes has an impact on the small companies supporting its business. And right now, there are three small-cap stocks primed to shoot higher as the effect takes hold. These stocks are only a small fraction of the size of Nvidia. So, the gains on offer are multiples more than what’s on offer with the chipmaking giant. I’d like to give you more details on this Nvidia Effect as well as the three small-cap AI stocks I’m recommending right now. To learn more, I invite you to join me tonight at 8 p.m. ET. I’ll lay it all on the line in a [one-off investing summit]( And I’ll share my favorite way to profit from the AI megatrend. You can reserve your spot with one [click right here](. I look forward to seeing you there… and showing you how you can profit. Regards, Colin Tedards Editor, The Bleeding Edge --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). MAILBAG Readers continue to respond to [last Thursday’s essay]( on the growing trend of U.S. law enforcement investing millions of dollars in AI that can track and predict crime… This reader has mixed feelings about it… I think it depends on how the technology is used: 1) If people are arrested and tried for something they might do, that would be a problem, but… 2) If this is used to help identify who might have committed a crime to help detectives find the bad actor, or if this is used to identify people who need help and get that help before they feel like they have to do something criminal, that would be a positive. I see several different things here: 1) You said that the age-old axiom, "If you’ve got nothing to hide, you’ve got nothing to fear," is used, but the real issue is privacy. If people are concerned about privacy, why do they put their lives out on the internet for everybody to see? They put all their information on the internet and then complain when somebody looks at it. I may not be very smart, but if people want privacy, they shouldn’t put their information where anybody can see it. 2) In a world where so many people feel overwhelmed and like nobody is listening or paying attention to them, what is wrong with looking at their cries for help and then trying to help them in positive ways rather than waiting until things boil over before dealing with the issue? 3) What is new with using this tool for developing a list of potential bad actors? Law enforcement has collected the names of people who are potential bad actors for many, many years – lists of people in gangs, lists of people in organized crime, lists of sex offenders, etc. Isn’t this just another list that can be used to find the bad actors? 4) Haven’t people asked for this type of predictability? How many times has there been a school shooting or other such thing where it was asked if there were signs or indications that this person was going to do something like this? For example, if a guy was talking about thoughts of sexual assault and he was helped before harming your daughter, wouldn’t you think it was a good thing? Anyway, I can see it being used for a lot of good. On the other hand, as you point out, it can be used in a negative way too. But isn’t this true for most, if not all, forms of new inventions? – Greg L. What are your feelings on new AI technology that helps track and predict crime? Are there any past events where this type of technology would have been useful? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). IN CASE YOU MISSED IT… [New Cash Law Will Be Disaster for Savers]( New law has expert warning seniors and retirees to beware. There’s a darker truth behind this political event… [Read The Full Story Here.]( [image]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Rogue Economics welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-681-1765, Mon–Fri, 9am–7pm ET, or email us [here](mailto:memberservices@rogueeconomics.com). © 2023 Rogue Economics. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Rogue Economics. [Privacy Policy]( | [Terms of Use](