I don’t make predictions. So what I’m going to say next is NOT a prediction … it’s inevitable.
The Dow Jones Industrial Average will rise to 100,000 over the next decade … if not sooner.
The driver of this growth will be artificial intelligence (AI).
The disruption and innovation AI is going to unleash on the world is unprecedented.
Its impact will be greater on our lives and the lives of our children than electricity was for our great-grandparents.
These kinds of huge moves have happened in the U.S. several times before…
The roaring ‘20s era produced a record number of millionaires during its 10-year stretch.
The telephone, radio, planes and cars … ushered in a period of unprecedented productivity.
And helped to drive the Dow Jones (DIJA) to soar over 497% from 1921 to 1929.
History has shown that there were two other periods when technology transformed the world and accelerated growth in the economy…
- 1995 —1999: During the dot-com boom, the DJIA experienced significant growth. The 5-year compound annual growth rate (CAGR) for the period ending December 31, 1999, was roughly 25.2%.
- 2009 — 2013: Following the 2008 financial crisis, as we moved towards digitization, the DJIA rebounded strongly. The 5-year CAGR for the period ending December 31, 2013, was approximately 18.7%, just shy of the 20% mark.
Right now, we are seeing this play out. And we are only in the first inning.
3 Sectors to Surge from AI
Every industry in the U.S. will benefit from AI.
It will add billions and billions of dollars … on a yearly basis to wealth creation. U.S. GDP for 2023 was more than $27 trillion.
If AI increases GDP by just 5% … that would come to more than $1 trillion!
In that context, my estimate of Dow 100,000 might be too low.
Digging a bit deeper, the economic impact will be felt more deeply in these three industries:
AI Sector No. 1: Health Care ($4.7 Trillion, 18% of GDP)
AI’s impact is already being seen in new drug discovery, personalized medicine, medical imaging analysis and remote patient monitoring.
HCA Healthcare (NYSE: HCA) is the largest hospital chain in the U.S. It is in our Alpha Investor portfolio and we are up more than 250%.
HCA recently partnered with Google Cloud to utilize AI, by improving workflows for time-consuming tasks like clinical documentation. This will allow physicians and nurses to focus more on patient care.
The partnership has developed a system to automatically produce handoff reports between nurses.
The amount of time and dollars this will save will be huge. And those savings will fall to the company’s bottom line.
AI Sector No. 2: Retail ($1.5 Trillion, 6% of GDP)
AI is already powering the retail sector with personalized recommendations, targeted advertising, demand forecasting, and cashier-less stores.
A great example is Walmart (NYSE: WMT).
Walmart is using AI to improve customer service.
The company uses a fine-tuned model, along with OpenAI, that allows customers to place voice orders from their smartphones and receive prompts.
In the store, you can even “Ask Sam” — Walmart’s AI voice assistant to find out which aisle the orange juice is in. This will result in a better customer experience, higher sales and more money falling to the bottom line.
AI Sector No. 3: Manufacturing ($2.9 Trillion, 11% of GDP)
AI enables predictive maintenance, optimized production processes, quality control and the development of new materials.
A great example here is General Electric Company (NYSE: GE).
It’s using AI in many areas of its business…
How to Invest Before Dow Jones (DIJA) 100K
Generative AI alone is going to add:
- $150 — $260 billion to health care every year.
- $240 — $390 billion to retail every year.
- $170 — $290 billion to manufacturing every year.
For a total of between half a trillion to one trillion dollars per year!
And keep in mind … this is from just three industries.
So you can see why Dow 100,000 might be too low an estimate over the next decade.
And I’m not saying to just go out and buy into the Dow Jones (DIJA). The big gains will be made from the companies leading the AI disruption.
In fact, a mysterious project from two of Silicon Valley’s most secretive billionaires could easily soar 2,500% in value in the coming years.
Then 5,000% over the next decade.
But long term, this AI pioneer could become “The Next Microsoft.”
For the details, just check out the new video I made about it here.
Regards,
Charles Mizrahi
Founder, Alpha Investor
