The Real Deal About Artificial Intelligence, Google Fined, Nikola & Dimed
Artificial Intelligence, No Artificial Flavors
Great Ones, I know times are hard right now. The stock market is crazy. Investing is like walking through a minefield. And I’m probably not helping soothe the savage beast right now.
Heck, I probably scared the utter bejesus out of you yesterday with that whole “Going Down Swinging” spiel.
But at least I eventually told you how to make money amid all this madness. Eventually…
Today, we’re taking a lighter tack.
Oh, thank God!
Today, we’re talking about opportunities.
We’re talking about future-proofing your portfolio.
We are not talking about short-term investments or get-rich-quick schemes … or whatever else WallStreetBets is hyper-focused on right now.
Seriously, guys … the ADHD meds work. Take some.
No, today, we’re talking about a massive, long-term investing trend in a market that could … could … hit $17 trillion … if activist tech investor Cathie Wood is to be believed.
What’s more, that figure is obviously a lot higher now. Wood made her prediction back in 2017 … and, you know, with inflation, that makes this market worth nearly $20 trillion in 2022 dollars. Just saying…
Anywho, I don’t like beating around the bush too much … unless it’s to bring you movie quotes or song lyrics. The market we’re talking about is artificial intelligence (AI).
Obviously, Mr. Bad Stuff. I can read that in the headline.
Pfft. I’ve been called much, much worse. Get a thesaurus or something…
So I’ve ranted and raved about AI for a long time in Great Stuff. In other words, I hope I don’t have to rehash the “why” of investing in AI.
This technology is the end-all-be-all of future investments. AI is about to run everything from self-driving cars to theme park rides to high-frequency trading to your grandpa’s pacemaker.
It’s literally going to be everywhere.
I believe in the AI market so much that there are at least four Great Stuff Picks portfolio holdings with varying degrees of exposure to the AI market: Advanced Micro Devices (Nasdaq: AMD), Nvidia (Nasdaq: NVDA), Boeing (NYSE: BA) and Walt Disney (NYSE: DIS).
What? You don’t think Boeing and Disney are developing their own AI for self-flying planes or personalized animatronic theme park rides? That’s cute.
Some might even think about Intel (Nasdaq: INTC), especially in light of the company’s acquisition of Mobileye — which is testing self-driving, AI-powered Nio (NYSE: NIO) sedans in Detroit, right under the “Big Three’s” noses.
The problem is that stocks like AMZN, GOOG, MSFT and INTC don’t offer the kind of long-term gains many of us are looking for. These giga-cap stocks might be easier on the risk tolerance, but they’re right shite when it comes to retirement-busting returns.
For instance, I’d personally rather invest in Mobileye itself than Intel. It’s just a purer AI play than Intel. And I was invested in Mobileye … before Intel bought it.
The problem is … how do you find these smaller-cap AI tech companies? And how do you make sure they’re not going to go bust like so many small-cap tech companies are wont to do?
Well, you can keep reading Great Stuff, of course! You know I’ll keep you up to date on all the AI tech companies I can find.
But I get it. Maybe you want a little bit more focus? More investment recommendations? More gains? And certainly, you want someone with the same devil-may-care, movie-referencing, pop culture fanatic attitude when it comes to telling you all about it!
I mean, y’all are Great Ones, after all.
Well, I’ve got a treat for you today. Check this out:
It all started with Superman III.
That was the first time I saw my comic book superhero on the big screen.
Instead of squaring off with villains like Lex Luthor, the Man of Steel meets his match in the form of … a supercomputer.
I was only eight years old back then. And I remember watching awestruck as a giant computer became “alive.”
The movie’s human villains created the machine for financial gain, hoping to corner world energy markets.
But once it was self-aware, the computer decided to conquer the world.
Even Superman barely stopped it.
For millions of Americans (and me!), this was our introduction to artificial intelligence (AI).
It was only fantasy at the time.
But now, it’s part of our everyday lives.
That pizza you ordered last week?
The system used AI to make sure your pie arrived piping hot.
Those ads you see while browsing the web?
They were picked by AI.
You might even watch Superman III on Netflix or Hulu — because their AI recommended it to you.
Computer-powered trading makes up 60% to 75% of daily volume in the largest equity markets.
By 2024, the global algorithmic trading market will be worth $18.8 billion.
There’s an average of 66.7 billion electronic trades every day.
That’s over three-quarters of a million trades every second!
And just like in the movie, this technology is transcending finance.
Only instead of taking over the world, it’s now positioned to save millions of lives.
The Times of London has called this breakthrough “a once-in-a-generation advance.”
Mark Cuban believes this trend could mint “the world’s first trillionaire.”
One Wall Street hedge fund even believes the opportunity is “more compelling than an early-stage Tesla.”
That, Great Ones, is just a snippet of my colleague Ian King’s latest throwdown on AI. I mean, Superman III? Even I forgot about that one … maybe on purpose, maybe not. It was bad in a good kinda way. I feel ashamed I didn’t think of it first…
But Ian King has you covered … and with more than just cult-classic ‘80s movies, that’s for sure.
In this pop culture-fueled AI breakdown, Ian discusses the who, the what and the why of AI investing. Not only is it filled with easy references and layman’s terms, it also has all the numbers. Like all the numbers. Ian is good with those, naturally.
Now, I’m not going to spoil the ending of Ian’s dissertation, so click here to read the whole thing.
You won’t be disappointed, I promise.
But maybe you’re one of those impatient investors that simply must get started right. Freaking. Now! Well, I’ve got you covered there too:
While the rest of the market freaks out about … well, basically everything … set yourself up for the next generation of tech … the AI generation of tech.
As Ian King puts it:
Because soon enough, the big money will follow, and that’s when the biggest profits will be made. Everything could unfold next week … or years down the road. The important thing is to be ready.
Because AI is ready for you… Alright, that’s a bit too creepy now.
Remember a couple weeks ago when we talked about Seagate’s (Nasdaq: STX) distant early warning of trouble in the hard drive space? And how things must be real nasty-looking for Seagate to drop its current-quarter revenue expectations … again?
Welp, buckle up, STX investors: Just when you thought you were safe-ish … Seagate’s actually more pessimistic than it originally let on.
How? Just … how?
CEO Dave Mosley spoke at a tech conference today and noted that he still sees hard drive demand “continue to erode” due to “more cautious buying behavior” and “more trepidation.” Gee, Dave, got any more worrying buzzwords you can drop on investors?
Really? After yesterday’s Great Stuff? Pot meet kettle.
Now, there’s just one teensy-weensy little problem that Seagate isn’t addressing in any of these announcements. OK, I lied, it’s actually a colossal problem: the arrival of solid-state drives (SSDs) that will exponentially dominate the sales of Seagate’s hard disk drives (HDDs).
For you and me as consumers? SSDs are a godsend. Fast boot times, ultra-compact storage with no spinning drives. Them’s the goods. That’s also exactly what makes them dangerous for traditional HDD makers like Seagate, who don’t have as much exposure to SSD sales.
People are making due with what they’ve got since you know … inflation. If they aren’t buying new laptops or PCs, neither HDDs nor SDDs are selling right now.
Big-budget cloud companies will still need HDDs as the more practical solution for high-density storage … but that doesn’t mean they’ll keep buying as much as they used to. And neither scenario bodes well for Seagate.
Alright, Great Ones: The votes are finally in!
What, that Nacho Doritos are superior to Ranch Doritos?
Wait, where the heck was the vote for that? Did I miss it again? Sigh. Mark me as: Nacho.
Anyway, Twitter (NYSE: TWTR) shareholders ended up voting for the Musk buyout to go through after all. And who would’ve expected otherwise?
Twitter investors, having been jerked around and paraded all quarter long — now there’s an image for you — are watching their shares ping-pong around every time Elon Musk opens his mouth, like a methed-up monkey playing tetherball.
Ooh, where can I get one of those?
Now, the only thing that remains is … you know … the actual court case as to whether or not Elon can pull an Elon and back out of the deal last minute. Seeing as how the stock barely budged on the news of the vote … I’m going to guess that investors aren’t too optimistic about the Twitter vs. Musk trial.
Umm. Don’t get your hopes up…
Have you ever seen Google get slapped on the virtual wrist before? No? Well, you’re in for a frustrating, frustrating treat. It goes a lil’ something like this.
Everyone knows that Google has, as the European Commission put it: “abused its dominant position in the mobile operating system and search markets” by pushing the Chrome browser on Android. Well, everyone that’s ever used an Android phone knows, that is.
Apple did the same thing with its Safari browser, but that’s a story for another stock…
Meanwhile, the financial media proceed to go mad and shout about Google’s “Record €4.1 Billion Fine!” And woohoo, everybody celebrates the fact that Google isn’t above antitrust penalties … that all is good and fair in the corporate world … or something like that.
But then you realize, hey, wait a minute. This is Google we’re talking about here. What’s a €4.1 billion drop in Google’s bucket going to accomplish?
Nothing. Nothing at all. That’s like a tenth of what Alphabet makes in a single quarter. And this case has been dragging investors’ hopes for ages for some sense of antitrust regulation.
That is … unless you’ve witnessed literally every other time Google is “punished” with “record fines” that sound substantial to you or me, but are quite inconsequential to a monolith like Google.
Nothing to see here for investors. More of the same for everyone else.
And now, our spot of shame. The ol’ fat stinker. The dregs of the market doldrums: Nikola (Nasdaq: NKLA).
For any of you still seeking your schadenfreude fix for the week — it is the best kinda freude after all — look no further than the trial of Nikola Founder Trevor Milton. You know … the one time that EV short sellers like Hindenburg Research weren’t just talking out of their exhaust pipes.
I don’t think EVs need exhaust pipes, but OK, Great Stuff.
Trevor Milton faces two counts of securities fraud and two counts of wire fraud, all related to statements the founder made while chairman and CEO of Nikola. And let’s talk about those statements the company’s C-suite cheerleader made during his tenure…
As Assistant U.S. Attorney Nicolas Roos put it:
He lied to dupe innocent investors into buying his company’s stock. On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight.
It’s rather blunt, but I’ll allow it (and actually appreciate it in this context). I mean, this is Trevor “Rollin, Rollin’, Rollin’ Trucks Downhill” Milton we’re talking about here.
Elsewhere ‘round the electric vehicle market, BTIG Analyst Gregory Lewis just went and upgraded … hold up … Nikola?! For its battery tech, of all things?
Nikola doesn’t even have a hydrogen-fuel vehicle. It doesn’t even have a prototype of a hydrogen-fuel vehicle. Why in the world would get you onboard with a company that’s not only late to the game, but literally changed sports in the middle of playing?
Too many sports references!
Anyone in the EV battery market is going to avoid Nikola’s name like the plague, which is a shame really, because now both halves of Nikola Tesla’s name are sullied by ego and EV market overconfidence.
What do you think, Great Ones? Got any thoughts on today’s Great Stuff? Head on over to our inbox to share your side of the conversation: GreatStuffToday@BanyanHill.com.
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Editor, Great Stuff