Editor's note: Don't fight the AI hype...

Despite the rapid emergence of AI driving growth in technology stocks, many investors remain skeptical about this revolutionary technology. But according to Keith Kaplan – CEO of our corporate affiliate TradeSmith – the AI trend can help you leverage the volatility we've experienced throughout 2025.

And he recently revealed a way to use AI in your trading that will put the odds on your side on dozens – if not hundreds – of trades throughout the year.

In today's Masters Series, originally from the June 28 issue of the free TradeSmith Daily e-letter, Keith explains why embracing this innovation can help you avoid leaving gains on the table moving forward...

Invest Alongside AI, Not Against It

By Keith Kaplan, CEO, TradeSmith

It started with a challenge...

As CEO of TradeSmith, I have a team of top data scientists, programmers, and quant investors.

We pride ourselves as being on the cutting edge.

And this year, we've launched a few new strategies designed to help you trade what's become an increasingly chaotic market environment.

These include a seasonality screener, a tool that identifies snapback rallies, and more.

They've all been huge successes in delivering outsized returns for our members.

But I wanted to go one step further.

So, I asked: Can we harness the same type of artificial intelligence ("AI") technology Wall Street uses – and make it available to everyday investors?

After tens of millions of dollars and hundreds of thousands of man-hours, the answer is a resounding "Yes!"

As I revealed during a live demo last week, an AI project we've been quietly building is now finally ready for action.

We call it TradeSmithGPT.

Like the most popular AI, ChatGPT, it works 24 hours a day, seven days a week, 365 days a year – analyzing opportunities across nearly 2,000 stocks in any sector you can imagine – and learning along the way.

Unlike ChatGPT, this AI is not a large language model that "guesses the next word" for its text.

This is a large number model aimed at "guessing the next number" for its projection.

That's way better suited for trading ideas. It crunches the numbers much more efficiently, without going back and forth from numbers to words to numbers... And in our backtests, it's given opportunities to collect four, eight, and even nine years of average stock market gains in a matter of weeks.

Today, I'll show you how this works, how it could completely change the way you build wealth in 2025 and beyond, and how it could help you outperform even the pros...

First, it's important for you to know how critical it is for us as self-directed investors to put AI on our side.

As you'll see, TradeSmithGPT isn't just about boosting our returns. It's about making sure we don't get left behind in a world-changing "arms race."

You won't hear much about it in the press. It's too busy reporting on the food fight on Capitol Hill and the latest social media scandal.

But there's a frantic "arms race" on Wall Street right now.

The world's wealthiest and most sophisticated investors are racing to build ever more advanced AI systems – squeezing bigger profits from the market... often at your expense.

This really caught my attention back in 2022 when Ken Griffin's storied Citadel hedge fund hauled $16 billion out of the markets in 12 months mostly by automated trading.

That's $9.8 million for every hour the stock market was open – more than most folks make in a lifetime.

But the AI arms race has accelerated at a pace even I didn't see coming.

Here's just a small sample of recent developments...

• Steven Cohen's Point72 Asset Management's new AI-focused fund posted a 14% gain just three months after launching last October. That's more than twice the 6.2% gain for the tech-heavy Nasdaq over the same time.

• Paul Marshall and Ian Wace's AI-powered Trade Optimized Portfolio System ("TOPS") synthesizes thousands of trade ideas – as well as data from social media – to find winners. This strategy netted 22.7% last year and a further 7.1% in 2025.

• Melvin Capital delivered a staggering 44% return in 2019 and 30% annualized return from 2014 to 2020 by blending human insight with proprietary AI systems.

It's not just hedge funds that are turning to AI. Last month, the Wall Street Journal reported that automated portfolios – many driven by algorithmic and AI-based strategies – now manage nearly $8 trillion. And more than 8 in 10 fee-based advisers now use these portfolios for at least some client money.

AI isn't hype. It's reshaping how money gets managed on a gargantuan scale. And as individual investors, we can't sit pat. And we can't be complacent.

Griffin, Cohen, and the other "masters of the universe" on Wall Street aren't flocking to AI for no reason. They know it's better than human traders at spotting profitable market setups. And they're practically tripping over their Gucci loafers to get a leg up on the competition.

And this shift toward AI by deep-pocketed money managers is happening right when the gains from buy-and-hold investing are becoming more difficult to find.

I probably don't need to tell you, but April was the craziest month for markets since the pandemic crash of 2020.

The S&P 500 plunged 11% over just two trading days.

That wiped out $6.6 trillion in stock market value.

A couple days later, we got a one-day rally of 9%.

And Wall Street's "fear gauge," the VIX, exploded to rare heights...

On April 8, the VIX closed above 50. We've only seen this level or higher in 2008, 2009, and 2020.

This isn't your grandfather's stock market... or your father's. When markets can move that much – often on as little as a social media post – you're dealing with a new kind of market entirely.

And with geopolitical conflict rising around the world... the pace of technological progress upending entire industries... and intense political battles playing out across America, we can expect more intense volatility ahead.

Add in the widespread adoption of AI on Wall Street, and the rules of investing and trading are about to be rewritten.

But there's hope.

Thanks to the breakthrough my team and I have made, these powerful trading tools are no longer locked away inside billion-dollar quant funds.

According to a report from the U.S. Securities and Exchange Commission ("SEC"), hedge funds deploying AI-driven trading strategies outperformed their peers by an average of 12%.

TradeSmithGPT can do better.

In our backtesting, it identified setups with potential gains as high as 776%.

Of course, that's just one example.

In backtesting, it also flagged...

• A 153% win on Spotify Technology (SPOT)...

• A 172% win on Eli Lilly (LLY)...

• And a 339% gain on Taiwan Semiconductor Manufacturing (TSM).

All in a matter of days.

Now, not every trade will be a winner. So, you should never invest more money than you can afford to lose.

But if you want to invest alongside AI like the top players on Wall Street, this new software is something you'll want to have on your radar.

All the best,

Keith Kaplan

Editor's note: TradeSmithGPT is designed to help you profit from trades sooner – with the ability to cut down years' worth of stock market gains to a matter of weeks or less.

That's why Keith recently went on camera to reveal exactly what this new breakthrough AI software is, how it works, and why it will be critical to your success in the markets throughout 2025.

If you missed the event, don't worry. You can view the replay here.