Love it or hate it, the power of AI is undeniable.
It’s a massive trend that’s only gaining momentum. It’s making headlines almost daily as it propels strikes in the entertainment industry and continues to disrupt major industries.
But here’s a question…
How should we look at this technology: as a leveraging tool to help make us more money, or as a pure investment?
So we asked a few of our Banyan Edge experts.
(Hint: Either way, you have a HUGE opportunity to make money.)
3 Hot Takes on AI:
To me, it definitely looks like there are ripe opportunities in both.
Companies are figuring out how to leverage AI to cut costs, optimize operations … and ultimately that leads to fatter profit margins on the bottom line.
That said, I think there will be just as many “zeros” as there will be “heroes” in the AI space.
It may end up looking like the venture capital scene, where most companies go under, but the few that survive and thrive can generate truly massive returns.
And then in terms of AI as an investment tool … we’re definitely already there!
AI can process data so incredibly fast. It can determine, in real time, which investment factors are leading to market-beating returns, and which ones are simply “noise.”
My extensive research on this subject led me to incorporate AI as a tool into my trading systems.
Having access to AI isn’t like having some magical crystal ball, and it never will be.
But it’s most certainly a data-driven, odds-enhancing tool, with power unlike anything we’ve seen in several decades.
— Adam O’Dell
I get some great questions from readers about AI and its impact.
The truth is, AI is both: a great tool, and a great investing opportunity.
The way I now think of AI reminds me of my favorite childhood movie…
In Star Wars, R2-D2 is an affable droid that rides in the back of Luke Skywalker’s X-Wing fighter. With R2’s help, Luke is able to fend off the TIE fighters and destroy the Death Star.
This is a great metaphor for the initial impact of artificial intelligence.
AI is a general purpose technology that will eventually impact every industry, not just tech. It’s already affecting health care, entertainment and media, to finance.
We are in the period now where it can augment human intelligence in the same way that R2-D2 helps Luke fix his ship and battle the evil empire.
And it’ll help the U.S. economy too…
Because this coming wave of AI software will likely boost productivity growth by 1.5% annually.
Now, that number might seem small. But that’s enough to raise global GDP by $7 trillion per year.
That could put us toward a $150 trillion global economy in the next decade.
The big winners of the AI race will be the early innovators, as well as the companies that are helping to develop and implement this new technology. And that to me is a huge AI investing opportunity.
— Ian King
I agree with Adam and Ian! AI is an amazing technology, both as a tool and a mega trend.
As you know, I like to dive deep in the research. And here’s what I found for you…
First off, a new report from Bloomberg Intelligence is bullish on AI.
The report states: “The adoption of generative artificial intelligence (AI) and large language models (LLM) will ripple through every segment of the technology sector. Incumbents and new providers will reimagine existing end markets to potentially generate $1.3 trillion in revenue by 2032.”
You might’ve heard about generative AI, machine learning and other facets of this rapidly advancing technology. Let’s focus on the first one.
Generative AI uses algorithms (like ChatGPT) to create content. This includes audio, images, text and even videos.
While LLM consists of deep learning algorithms that can recognize, translate, predict and generate content using huge data sets.
Per Bloomberg, the $1.3 trillion that generative AI will potentially produce over the next decade will account for 10% to 12% of total technology spending, in industries like:
Along with generative AI and LLM, “training AI” is also presenting a massive investment opportunity — via the use of machine learning and neural network algorithms.
The training AI market is projected to reach $474 billion in sales by 2032. Servers and storage units at data centers will greatly benefit from this trend as well.
These promising projections also dovetail with the “Tech’s Turning Point” Bloomberg summit that I attended virtually this summer.
The conference featured fireside chats with the heads of some of the biggest names in the technology and AI boom, like:
- Adam Selipsky, CEO of Amazon Web Services (AWS).
- Brian Chesky, Co-Founder & CEO of Airbnb.
- Sam Altman, Co-Founder & CEO of OpenAI (includes ChatGPT).
The one thing all of these CEOs agreed on?
AI is a massive investing opportunity. And it’s a trend we can’t afford to ignore.
So here are two key things I took away from this summit:
- It’s still very early in the AI boom.
According to AWS’ Adam Selipsky, generative AI is an incredibly explosive and transformative technology.
He noted that the massive amount of compute required for generative AI will happen predominantly in the cloud, which will create the next big increase in workloads and jobs. This is a great opportunity, as only 10% of IT tech has moved to the cloud.
He concluded: “We can’t put the genie back in the bottle. Generative AI is going to happen.”
- “AI will be imbedded in everything we do.” — Brian Chesky
As Chesky shared (and I’m paraphrasing):
He’s lived through the internet going global, mobile and cloud. AI feels like the global expansion of the Internet and the 2000 cycle combined.
It’s the biggest tech wave since the industrial revolution. It’s a massive acceleration. A “platform shift of all platform shifts.”
Most notably, he said, AI will create a lot more jobs than it will destroy. It’ll also produce millions more entrepreneurs, and many more people will be able to produce more software and build new companies thanks to AI.
That’s why I believe this isn’t just a tech trend. It’s a one-of-a-kind investing experience.
The AI revolution we’re seeing today is just the tip of the iceberg.
— Amber Lancaster
AI Takeaway: 3 Ways to Invest Today
AI is going to be a game-changer and we’re just in the early innings. And in Banyan Edge, we’re going to keep you informed and share every opportunity our team is watching.
Here are three for today…
- Amber: Gain Some AI Exposure.Consider buying shares in the Global X Funds Global X Artificial Intelligence & Technology ETF (Nasdaq: AIQ).This exchange-traded fund tracks the performance of the Indxx Artificial Intelligence and Big Data Index.
And this index tracks companies in markets that will likely benefit from utilizing AI technology in their products and services, as well as companies that produce hardware used in AI (and used to analyze Big Data).
- Ian: Buy AI Stocks.I put together a special report for readers called The American AI Revolution. In that report, I recommend three companies that are leading the AI charge.And on Wednesday, October 4, I’m releasing a new trade alert to my subscribers.
- Adam: Use AI as an Investing Tool.I’ve incorporated AI into my trading strategies.One I’m using is an AI software that analyzes, and even predicts 30 days of market moves to pinpoint winning trades.
We hope you enjoyed these “AI takes” from our financial experts!
Before we go, we want to know: What’s your take? And if you have any AI questions for Adam, Ian or Amber, just let them know at BanyanEdge@BanyanHill.com.