For as long as I can remember, I’ve had a passion for math, computer code, logic, and quantitative analysis…
All the building blocks that make artificial intelligence (AI) possible today.
I’ve told you how, at IBM, my dad pioneered a computer algorithm that lies at the heart of AI today. He even wrote a book about it.
And when I was maybe eight or nine years old, Dad taught me how to code computers.
I don’t know if it was nature’s plan or Dad’s influence.
But I graduated college early at 19 years old with a math degree. In my final semester, I got a job at IBM as a programmer.
And soon after, when Wall Street got wind of my programming skills, they hired me.
I wrote a software program at Chase Manhattan Bank that revolutionized the way they traded options.
I later joined Bear Stearns, where I ran one of the first teams to specialize in quantitative analysis across multiple products and security types.
We were among the first “quants” – before “quant” was even a thing.
This was in the late 1980s and early ’90s.
Computers were rapidly developing, and so were cell phones and email. Technology was leading the way – much like it is today.
And I was at the cutting edge of all that change for finance and technology… for programming, analytics, and everything else.
But I don’t say all this to brag.
I’m telling you this because right now, we’re at another inflection point – just like the one I witnessed on Wall Street three decades ago.
Except this time, AI is at the center of it.
As I’ll show you today, there’s a huge opportunity for the companies at the forefront of this digital transformation.
And that means huge profit potential for you.
Three Predictable Phases
In technology, there’s a predictable pattern that plays out again and again. We can trace it back over 100 years…
The first car was invented in 1886. But the technology didn’t take off until Henry Ford’s Model T took over streets 25 years later.
We saw it in computers. PCs popped up in the 1970s but weren’t common in households until the ‘90s – two decades later.
And we saw it with smartphones.
Apple’s first portable “smart device,” the Newton, came out in 1993. But it wasn’t until the iPhone launched 14 years later that everyone wanted one.
My point is, new and disruptive ideas don’t catch on overnight.
They follow the same path of interest and acceptance, which is known as the “adoption” curve. It looks like this…
If you invest too late in the adoption curve, you’ll miss all the biggest gains. That’s the “saturation” phase, when everyone knows about it.
If you invest too early – in the “innovation” phase, when the technology is being developed – you’ll have to wait years, perhaps decades, to see returns, if any.
Investing in the innovation phase would be like investing in the internet in 1983. That’s when, for the first time, computers were all able to “talk” to each other.
But it took until the 1990s for businesses to start going online.
In other words, for over a decade, the internet was sitting there… waiting for someone to do something with it.
Then, in 1994, Microsoft got a website. McDonald’s, The New York Times, and Apple launched their websites in 1996.
From there, more businesses realized that having a website was not an option. It was a requirement for doing business in the 21st century.
That was when the internet really started to take off.
And if you invested in the right internet companies in the “take-off” phase, you had the chance to get insanely rich.
For example, a $1,000 investment in Amazon could have turned into $62,000. And $1,000 invested in Apple could have turned into an astonishing $157,000.
That “take-off” phase is where we are with AI today.
AI’s “Take-Off” Phase Is Now
How do we know where we are with AI?
First, because we see usage spiking.
AI adoption is up 2.5x over the past five years alone, according to research firm McKinsey & Company. And that’s only going to accelerate.
We can see this through user growth of ChatGPT, the popular AI-enabled chatbot.
ChatGPT was the fastest-growing consumer application in history, according to a study from UBS. It went from zero to 100 million users in only two months!
To put that into perspective, it took TikTok about nine months to reach 100 million users. And it took Instagram two-and-a-half years, according to data from Sensor Tower.
As a result of ChatGPT’s success, AI stocks have exploded this year. Stocks like C3.ai, Super Micro Computer, and Nvidia are up 164%, 204.3%, and 227.2%, respectively.
Second, we follow the smart money.
The market for AI is set to explode to nearly $2 trillion before the end of the decade. That’s up 20x from $95.6 billion in 2021.
The insiders – venture capitalists, billionaires, major corporations – they’re all piling in now. Like Microsoft, who poured $10 billion into OpenAI, the parent company of the ChatGPT program.
Or AI data architecture company Databricks, which raised $1.3 billion from major investors like BlackRock and Fidelity at a $38 billion valuation.
And AI defense startup Anduril, which raised $1.48 billion from venture capital powerhouses including Andreessen Horowitz, Valor Equity Partners, and billionaire Peter Thiel’s Founders Fund.
The Clock Is Ticking
That’s why I’m pounding the table on AI now.
This is the moment. We weren’t there six months ago. And we may be past it in six months. Now is the time to act.
But as I’ve been writing, not every AI investment will be a winner. And if you get into the wrong names, you’re likely to get burned.
So how do you know which companies will become the leaders of AI… and which ones will fail?
Last year, I held an urgent briefing, The AI Ultimatum, where I told you all about my favorite AI company today.
This tiny company is trading for only about $0.33.
But a major announcement could come at any point and send its price soaring.
See, one of the biggest organizations in the world missed the AI frenzy. And now, they’re scrambling to catch up… to the tune of a just-announced $826 billion spending spree.
My urgent briefing, The AI Ultimatum, is available to you.
Click here for all the details.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins