The 'Boom and Take Off' Stage Is Already Here
Editor's note: Don't let gains pass you by...
With artificial intelligence ("AI") growing at a rapid pace today, many investors are looking for ways to capitalize on the AI trend in its early stages. But according to Digest editor Corey McLaughlin, we could be further along this growth stage than everyone thinks.
In today's Masters Series, adapted from the April 16 Stansberry Digest, Corey details how AI developments have us on the verge of a massive market shift...
The 'Boom and Take Off' Stage Is Already Here
It's the "boom and take off" stage...
That was Crypto Capital editor Eric Wade's opening salvo during a panel discussion about the potential of artificial intelligence ("AI")...
Back in April, attendees sat in a large conference room on Maryland's Eastern Shore for Stansberry Research's quarterly "offsite" meeting.
Dozens of our editors, analysts, and other staffers gathered for the day to pitch investment ideas and discuss some of the biggest stories in the economy and the world in general.
AI is undoubtedly one of these. Excitement over AI has been building for more than a year... ever since ChatGPT took off and chipmaker Nvidia (NVDA) blew past earnings estimates, thanks to demand for its AI-related products.
If you're like me, the prospect of AI becoming an increasing part of our lives is one part overwhelming, another part concerning, and another large part uncertain.
What will a world with AI "all over" look like? What will it do? And what will it not?
They're all valid questions. But regardless, as I'll detail today, the resounding answer is that AI is here to stay. And it will likely transform the economy and world as we know it – particularly one corner of the market...
A few of our editors and business associates addressed the above questions during that meeting...
They touched on topics ranging from which industries might be on the chopping block... to the amount of energy required to run AI globally... to the threats to people and governments from AI... and whether this all mirrors the dot-com bubble at the start of this century.
I'll start with just one big point about AI right now – and, to close today's essay, I'll share a heads-up about an AI-related opportunity.
They both come from Eric, who started our meeting by describing where we might be in the AI "boom."
In short, it's still early. But "the real use cases are further along than most people think." As Eric explained...
In my mind, it's going to get a little bit more tangible and addressable beyond just "AI is the investment." We're going to start sorting out and shaking out the companies that don't use AI, or consumer products that wouldn't have existed without it...
He likened it to the development of the Internet decades ago...
The Internet was out there for 30 years before consumers knew what to do with it. There were a lot of fiefdoms... and at some point, the people who run the Internet thought, "What if we were all programming this the same way and could agree on some standards?" And boom, it took off after that. We're at that stage with AI, the "boom and take off" stage, and that's exciting.
Several editors also spoke about why they believe AI will deliver big productivity gains to the economy... and how this will support higher profit margins and stock prices overall.
Here's one final takeaway: Some companies will win bigger from AI than others – and some of these businesses might not even exist yet.
But we'll also see AI "bubble" losers... much like the infamous example of Cisco Systems (CSCO) from the dot-com bust.
But before we get into more about AI, let's talk about the recent market action...
On Wednesday, payment processor ADP reported the private-sector payroll data for October. It showed the highest number of jobs added since July 2023.
According to ADP, the U.S. added 233,000 private payrolls last month. That's a significant increase from September's (revised) 159,000. And it's well above Wall Street's consensus estimate of 113,000.
This report contradicts the growing pile of "official" evidence that the jobs market is softening. And, perhaps counterintuitively, the market is bullish about it...
What's more, another batch of data released in early October showed activity in the services sector jumped to one-and-a-half-year highs. And the major U.S. indexes have benefited as a result.
Every major asset class is up: stocks, with the tech sector leading... bonds, as yields dipped again... gold, for those who care about inflation... and oil and bitcoin, too. The latter is trading above $71,000, near an all-time high.
In this case, "bad news is good news"...
The services sector growth is, in fact, good news. It was the highest in more than a year and above expectations. And it has clearly lifted the markets.
But the S&P 500 Index and Nasdaq Composite Index were already performing well before that release came out... cheering the low private payrolls.
An apparently unpredictable jobs market might strike you as bad news – and it is, for people who are unsure about what to do with their money amid high inflation.
But the markets are often perverse. That's because investors are always thinking about what's coming next...
This mix is especially confounding with the Federal Reserve's recent decision to cut interest rates by 50 basis points. Folks are hoping that leads to an easier investing environment.
Alternatively, really bad data – like a sudden spike in the unemployment rate – could be sharply bearish for the market in the shorter term.
The central bank would then intervene to "rescue" things again. But we're not in that scenario right now. As I wrote in a June Digest...
Should any or all of these reports indicate a weakening jobs market, I'll be gauging whether bad news for the economy translates into "bad news" for stocks.
Will signs of economic weakness push U.S. stocks lower, given that a weak economy would be worse for businesses than the market had considered? Or will poor economic data be taken more as a sign that the monetary policy environment will indeed "loosen" with lower interest rates – and push stock prices higher on balance?
Investors are more excited about looser monetary policy than worried about the economy slumping.
Throw in some other encouraging economic data at the same time – like a strengthening jobs market and growth in the services sector – and you get a market making new highs.
Now, back to that AI idea...
In July, Eric told his Crypto Capital subscribers about a new opportunity that directly involves the powerful trend of AI.
He recommended a startup seeking to create what he describes as an "AI Internet" that brings together AI innovators, data providers, businesses, and infrastructure providers.
He believes this project could become a leader in the massive AI space. And an early investment in a little-known cryptocurrency "token" tied to it could lead to 7X gains in the near term... with 100X gains possible over the long term.
But that's not all...
Eric also believes a "super convergence" of crypto and AI is happening now.
This is especially important right now. Eric says he's not sure we'll ever see a market opportunity like this again.
A convergence like this creates a window that may only open once in a lifetime. And the gains are already starting...
This year alone, Eric has recommended two AI cryptos that his subscribers could have made 219% from in 35 days... and 403% from in 42 days.
It's happening right now, in real time.
We're on the verge of a technological tipping point. Everyone is grappling with what it could mean. And it's creating tailwinds for cryptos – even against the backdrop of an uncertain economy, and regardless of the Fed's next move.
Good investing,
Corey McLaughlin
Editor's note: If you're worried about how to profit in this market, make sure you hear what Eric has to say. The crypto rally is just getting started... And what comes next could be the biggest crypto bull market we've seen yet.
To learn more – including how to build a portfolio of cryptos – click here to get the full details...