AI Stocks Retreat, Buy Now!

[Zacks | Our Research. Your Success.] WeekendWisdom Tactics that Work in Good Markets and Bad [Andrew Rocco - Editor] AI Stocks Retreat, Buy Now! By: Andrew Rocco May 11, 2024 --------------------------------------------------------------- AI Growth is Still in the Early Innings...According to a new report by Bloomberg Intelligence, "The generative AI market is poised to explode, growing to $1.3 trillion over the next 10 years from a market size of just $40 billion in 2022. Growth could expand at a CAGR (Compound Annual Growth Rate) of 42%, driven by training infrastructure in the near-term and gradually shifting to inference devices for large language models, digital ads, specialized software and services in the medium to long term." AI Requires Data Centers Data centers are integral to the AI buildout because they yield the computational power and storage necessary for training and deploying large language models like OpenAI and Microsoft's "ChatGPT," and Alphabets "Bard" at scale. Running an LLM requires facilities that house numerous servers and specialized hardware optimized for tasks such as deep learning. Unfortunately, these complex systems require a ton of energy due to their intense processing demands and the persistent need for temperature (cooling) regulation. Data Centers = "Hockey Stick" Growth Trajectory Continued . . . [AI Drives the Best Tech Market in Decades]( The Artificial Intelligence (AI) sector is estimated to soar from $40 billion to $1.3 TRILLION in just 10 years. You can be in the first wave of Zacks members to take full advantage of this trend that's about to change the world. [See Zacks' Tech Stocks Now »]( Global Data Center Market Insights Forecasts to 2032 • The Global Data Center Market Size was valued at USD 279.53 Billion in 2022. • The Market is Growing at a CAGR of 7.3% from 2023 to 2032. • The Worldwide Data Center Market Size is expected to reach USD 565.49 Billion by 2032. • Asia-Pacific is expected to Grow the fastest during the forecast period. Cloud and AI Compete Vie for Data Center Dominance While the hype is rightfully focused on the AI revolution, cloud companies require data center bandwidth. In fact, Google's cloud services have exploded in recent years, and the cloud segment posted $9.2 billion in revenue in the fourth quarter of 2023. Meanwhile, few casual observers realize that Amazon's (AMZN) AWS cloud generates more revenue than its e-commerce business! Cloud infrastructure saw record revenue in Q4. During a Gold Rush, Sell the Shovels With so much competition in a high-growth market, it can muddle the picture for investors. For example, thousands of companies went bankrupt during the internet craze, while only a few became dominant. How can investors parse through the noise? "During a gold rush, sell shovels." Samuel Brannan became the first millionaire of the Gold Rush, but not for the reasons you might expect. Brannan capitalized on the frenzy by providing miners with shovels, picks, and pans. When oil fracking exploded a handful of years ago, an unexpected industry took off: RV makers; because fracking took place in remote locations with little housing, companies like Winnebago Industries (WGO) took off as oil companies filled the housing void using RVs. Energy Needs are Set to Soar Data center share of U.S. electricity usage is growing, accelerated by Artificial Intelligence. Electricity consumption is set to explode, tripling by 2030, according to research by Boston Consulting Group. Industry experts anticipate that data center electricity will equate to 7.5% of domestic energy use, and will be the equivalent to the electricity used by one-third of U.S. homes in a year. In my view, the most certain and juiciest risk/reward proposition lies in powering the AI revolution... Alert: Artificial Intelligence to Ignite Tech Earnings (and Stocks) As investing legend Stanley Druckenmiller has observed, "AI could be as transformative as the Internet." Today, I invite you to look inside the portfolio I'm managing, [Zacks Technology Innovators](. We don't nail every pick but have recently closed winners like +121.0%, +118.8% and a plethora of double-digit winners. And the windfall is predicted to grow even more in the months ahead. In fact, I'm about to add a stock to the portfolio that has exceptional upside. You can be among the first to see this fresh pick and get aboard when it's posted Monday morning. Plus, you'll also have the chance to immediately access all of the live picks inside the Technology Innovators portfolio. Bonus Report, Too. When you check out our Technology Innovators portfolio, you may also download our Special Report, The Semiconductor Surge: A Single Stock to Watch. This semiconductor stock is perfectly primed for big gains as demand and revenue for chips continues to boom. Now is the time to look into this special company so you're in position for maximum upside. Don't wait. The total cost to see all Zacks tech stocks (and other recommendations) for 30 days is an astonishing $1. There's not a cent of further obligation. Deadline for this unique opportunity is midnight Sunday, May 12. [Click for $1 Stock Access and Bonus Special Report »]( All the Best, [Andrew Rocco - signature] Andrew Rocco Andrew is Zacks' technology stock strategist. 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