Even the CEO of IBM Got It Wrong

Editor's note: Artificial intelligence ("AI") is disrupting one industry after another – and it's not finished changing the world. As Joe Austin of our corporate affiliate Chaikin Analytics explains, we've seen this pattern before. In this issue, which we last published in DailyWealth in June 2025, Joe looks to a past tech wave for insight on where AI could still go from here.

Also, the markets and our offices will be closed tomorrow in observance of Juneteenth. Your next issue of DailyWealth will publish on Monday, after the Weekend Edition. We look forward to rejoining you soon.

One day, our grandchildren will reflect on what's happening in real time right now...

That's because AI is a generational opportunity. This disruptive technology will boost almost every part of the economy.

It's a lot like when Apple (AAPL) released the iPhone in June 2007...

That was less than two decades ago. And yet, almost everyone walks around with a smartphone in their pocket these days. It's tough to imagine a world without it.

The iPhone isn't the only tech to disrupt our daily lives, of course...

Major tech waves like these often follow a specific adoption pattern. And right now, AI mirrors the PC in 1985...

Back then, a lot of people believed in the potential of PCs. But the machines simply weren't practical yet.

I worked as a technology analyst at the time. I vividly remember PCs sitting idle on many senior managers' desks. In some cases, they remained unused for years.

Heck, even IBM's (IBM) CEO at the time, John Akers, looked at an early model of the PC as just a toy. He didn't believe it could ever become a critical part of our everyday lives.

In hindsight... Akers was wrong.

It Pays to Catch Tech Cycles at the Right Time

The PC changed our lives long before we all carried smartphones in our pockets. It made things easier across all sorts of industries. And it combined with another disruptive force...

In the early 1990s, companies started shifting their focus to the Internet. They saw the technology's potential, so they invested time and money into it.

Like the PC, the Internet wasn't practical at first. So the payoff didn't happen right away.

But here's the thing...

Investors who catch tech cycles at the right time can make massive returns.

After all, innovation always marches on. And the dot-com boom is proof. For example, look at what happened with Internet-related stocks – both over the short and long term...

According to FactSet data, the S&P Composite 1500 Internet Services & Infrastructure Subindustry Index produced a cumulative return of nearly 4,000% from 1995 to 2000. That performance crushed the benchmark S&P 500 Index over that span.

When we zoom out, the outperformance is even more impressive...

Even with the dot-com bust from 2000 to 2002, the S&P Composite 1500 Internet Services & Infrastructure Subindustry Index had produced a cumulative return of around 16,000% since 1995 as of the end of 2024. That was more than 4 times the S&P 500's cumulative return over that period...

As you can see, buying into the broad-market indexes isn't always the right move. If that's all you do, you'll often miss the biggest gains.

Sure, in a broad-market index, you'll get some exposure to the winners. But you'll also get exposure to companies that the innovation displaces... or businesses that decline for other reasons.

Not every Internet-related stock became a big winner. We've all heard of dot-com busts like Pets.com, eToys.com, and Webvan.

Here's the hard part, though...

The trick to successfully investing in disruptive technology is twofold. You need to find the big winners and avoid the big losers.

My colleague and Chaikin Analytics founder Marc Chaikin is about to unveil his stock market "Time Machine" that's designed to do just that.

This upgrade to his Power Gauge system uses the power of AI to go "back in time" on the market's biggest winners... so you can unlock the massive gains in today's market.

On June 24, he'll reveal all the details online – including the name and ticker of one stock that could soar higher than any of today's AI darlings over the next couple years.

Good investing,

Joe Austin

Editor's note: Do you wish you could go back and buy AI's biggest winners, before they soared? On June 24, you'll get your chance at redemption. That's when Marc Chaikin will unveil his one-of-a-kind AI-powered "Time Machine." It's built to match today's unknown stocks with yesterday's biggest winners... And, best of all, you can unlock a free, limited-time beta version of this new AI breakthrough.