The No. 1 Way to Play the Coming Copper Supply Crunch

Artificial intelligence ("AI") keeps making waves in the investing world.

Regular Daily Insight readers know that I've kept a close eye on everything going on in this trend. I'm sure many of you have even tried out chatbot ChatGPT by now.

I have big hopes for the future of this technology. And I'm not the only one...

Last week, a big investment firm predicted what's ahead for the next big thing in tech.

Headline No. 1:

Piper Sandler (PIPR) named "generative AI" the next tech revolution.

McCall's Call: On a recent episode of Making Money With Matt McCall, I broke down the meaning of generative AI – the technology behind chatbots like ChatGPT – and explained why I thought it would be a big trend in the future.

And it has only been gaining steam ever since...

Now, Piper Sandler believes that generative AI will be the next major $100 billion-plus tech revolution.

AI-enabled search and advertising revenues are projected to be around $2 billion this year. But by the end of the decade, the investment firm expects that figure will explode to $50 billion.

That's a massive 25X leap in less than seven years.

And it gives you an idea of how quickly this industry is evolving.

To play this trend, Piper Sandler laid out some of its top picks in the space – including Microsoft (MSFT), Snowflake (SNOW), Alphabet (GOOGL), Nvidia (NVDA), and Duolingo (DUOL).

Microsoft was one of the early leaders in this trend, backing OpenAI – the firm behind ChatGPT – all the way back in 2019. And Piper Sandler pointed out that semiconductor giant Nvidia will also be a big winner in this trend thanks to its strong position in the chip market.

Here's what the firm had to say...

In our view, Nvidia is the clear early leader in the generative AI space as we estimate that 80% of all AI workloads are currently run on NVDA chips.

Nvidia is at the cross section of many trends... Its graphics processing units are used in gaming, cryptocurrency mining, robotics, and many more industries. And as Piper Sandler noted, it already has a strong foothold in AI.

In general, I agree that the AI industry is set for huge growth over the next few years. It's one of the "inevitable trends" I talk about often. This technology is advancing rapidly, so it's difficult to predict exactly what it will be capable of years from now. But there's no question that it will be able to do a lot more than it can today.

Piper Sandler acknowledging this massive upside is important because it shows that this trend is going mainstream. As more people talk about it... more money will flow in.

And by the time the masses realize what's happening, the investors who got in position early will have already reaped the greatest rewards.

I'm hopeful that will be us. The innovations that come from generative AI will create countless investment opportunities down the road. And you can be sure my subscribers are ready to take advantage of them.

Headline No. 2:

Copper supply just hit its lowest level in 18 years.

McCall's Call: Copper supplies at the London Metal Exchange ("LME") are sitting at levels we haven't seen in almost two decades...

It has about 50,000 metric tons of copper in its inventory right now – which leaves only about one week's worth of consumption.

Copper isn't a metal we talk about often here at Daily Insight. But this shrinking stockpile is important because copper is often considered an economic bellwether.

When the global economy is booming, copper prices head higher as increased consumption fuels demand. On the other hand, copper prices tend to fall during global recessions as demand stalls because companies and consumers cut back on consumption.

But copper is far more than just a bet on the state of the global economy...

Copper has the second-highest electrical conductivity of all metals – behind only silver. But silver costs more than 90 times as much! Therefore, copper is the metal of choice for a wide range of objects that need electricity.

That's especially true for clean-energy projects and electric vehicles ("EVs").

According to the Copper Development Association, EVs need about 180 pounds of copper to deliver power throughout the vehicle. Meanwhile, the trade group says that traditional cars use up to just 50 pounds of the metal. That means EVs need three times as much copper.

And the Copper Alliance – which represents copper interests around the world – estimates that renewable-energy systems such as solar and wind farms will require six times as much copper as traditional-energy systems.

That puts copper at the core of the clean-energy and EV megatrends.

These are two industries that I'm expecting serious growth out of throughout the Roaring 2020s. But that can't happen without copper. We need a lot more of the metal to fuel the kind of growth that's ahead. And right now, there simply isn't enough supply.

That makes copper an attractive investment to go alongside clean energy and EVs.

In the most recent issue of MegaTrend Investor – which was just released this afternoon – I dive into the incredible tailwinds fueling the coming copper boom that make it almost a certainty that prices will be higher in the future.

And I reveal my No. 1 way to play it...

The company I recommend today is a low-cost producer of copper with operations in a wide range of locations. It's trading dirt-cheap compared with its peers. And it's in the best position possible to profit from the surge in copper demand over the next few years.

Don't wait to claim a trial membership to MegaTrend Investor. Click here to learn more.

Here's to the future,

Matt McCall
Editor, Daily Insight
April 19, 2023

Did You Miss My Latest Podcast?

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The S&P 500 Index is easily beating the return of the iShares Select Dividend Fund (DVY) so far this year. But I still believe there's opportunity in income-producing investments. I tell you about four dividend-paying stocks that come from four very distinct industries. And if you're interested in learning more about the power of income, these are stocks you'll definitely want to add to your watch list.