Add Louis Navellier to the list of InvestorPlace analysts who see big gains for tech … the next advancement coming our way … different ways to invest
It’s a warm summer afternoon. Your guests are arriving in an hour for your cookout.
With a million things to do before they show up, you head into your backyard to fire up the grill and prep your food.
That’s when it hits you …
You’re out of the sauce that’s the secret to your world-famous BBQ.
With no time to run to the store, what do you do?
Rather than panic, you simply open your Amazon app, find the bottle of sauce, and order it via “Prime Air.”
About 20 minutes later, you spot an Amazon drone hovering over your backyard.
It delivers your sauce, and your reputation as the neighborhood’s best griller remains intact.
This is real technology that’s headed your way.
Source: USA Today
***Yesterday’s Digest began with a question — are we watching the beginning of a tech meltdown?
The answer we arrived at with the help of Eric Fry was a definitive “no.”
The outlook for the technology stocks we follow here remains as bright as ever.
Regardless of shorter-term volatility, for longer-term investors, any weakness should be viewed differently …
As a buying opportunity for elite tech stocks.
Matt McCall spoke to this longer-term perspective, which we quoted in last Thursday’s Digest:
If you want to get rich, you have to focus on what will happen, not what is happening right now.
***Today, it’s famed investor, Louis Navellier’s turn to weigh in on coming market gains from tech advancements
From Louis’ Saturday update to subscribers:
Well, folks, every day there seems to be a new tech development that gets us closer to living in an episode of the futuristic show, “The Jetsons”!
In this case, that tech development comes courtesy of Amazon (AMZN).
The company recently received Part 135 air carrier approval from the Federal Aviation Administration (FAA) to deliver packages with drones.
Known as “Prime Air,” this fleet of drones should help the company deliver packages in less than 30 minutes.
Amazon has yet to give a rollout date for when we will actually see the drones in action, but it has been testing drones for years, and this approval is a critical step in the process.
In these days of working and schooling from home, delivery to your front door (or backyard, as we’ll see in a moment) has become more important than ever.
Louis notes that beyond the 30-minute-convenience for customers, drone delivery has additional benefits: they are battery-powered, which makes them more energy efficient and environmentally-friendly … they don’t create traffic … and they’re likely to reduce not only delivery time, but delivery-errors.
***All of these benefits are why Walmart is in the game too, looking to beat Amazon in the drone-rollout race
Back to Louis:
Walmart has teamed up with air delivery startup Flytrex to begin testing delivery drones.
Flytrex quadcopters are controlled through a cloud-based dashboard to deliver packages.
On this point, we learned last week that Walmart has launched an on-demand drone delivery pilot program in Fayetteville, North Carolina.
From Tom Ward, Walmart’s Senior Vice President of Customer Products:
The drones, which are controlled over the cloud using a smart and easy control dashboard, will help us gain valuable insight into the customer and associate experience — from picking and packing to takeoff and delivery.
Source: USA Today
Louis notes that the test program will include free deliveries up to 6.6 pounds. The drones will use tethers to drop off the items directly in backyards from 80 feet in the air.
Even though this is exciting, the reality is that we’re still a ways-off from this being a widespread delivery option.
There is a catch, though. Currently, drones require humans to operate. This includes not only a certified drone pilot who controls the device but also someone who monitors the drone to make sure it flies safely.
So, we are still a pretty long way from a fully automated artificial intelligence (AI)-powered drone, but this is certainly a step forward.
Even though we won’t be using drones tomorrow, the writing is on the wall. So, how might an investor take advantage of this technology today to be ahead of the curve?
***How your portfolio can benefit from drone advancements
The obvious investment is through the retailers that are implementing the technology.
In his update, Louis noted that beyond Amazon and Walmart, Alphabet and UPS are working on drone delivery technology.
But you could also take a picks ‘n shovels approach.
If you’re less familiar with the term, it dates back to the 1850s gold rush.
Though thousands of would-be millionaires set out to find gold in California, very few hit it big. Meanwhile, a few smart folks took an easier route to riches — selling basic goods to the miners.
It turns out, the first millionaire of the California Gold Rush was an entrepreneur named Sam Brannan who sold pots, pans, and — you guessed it — picks and shovels to the gold speculators.
The basic idea is why try to pick which retailer will win the race to drone-delivery?
Instead, why not pick a company that’s heavily involved in the nuts-and-bolts of the drone manufacturing process itself? A company that will benefit regardless of which big retailer wins the battle for drone supremacy?
If we zero in on drone component makers, there are lots of options.
For example, you have chip companies. We’re talking about technology that enables the drones to understand and react to the world around them.
One example is Ambarella (AMBA) — it produces video-processing chips for drones.
There are also the infrared cameras and sensors. These are literally the eyes of the drone, capturing the data for analysis by the chips.
One such manufacturer is Teledyne Technologies (TDY).
Then, there’s the drone battery pack. One such drone battery manufacturer is the Chinese company, DJI. Right now, it’s a private company, but there have been talks about an IPO.
An investor would need to be especially careful with DJI, however, as it was embroiled in a $150 million fraud scandal.
Let’s return to Louis for how he’s positioning his subscribers:
… as investors, there’s significant opportunity here. While individual tech companies like Alphabet or Amazon have their positives …
I would rather invest in the one company that all of Big Tech needs.
I call it The A.I. Master Key.
Specifically, it’s a hardware company that makes the “brain” all artificial intelligence software needs to function, spot patterns and interpret data. And its technology is already powering some drones.
Louis goes on to note that the stock is a “strong buy” despite today’s market volatility. And it pays a dividend, which is nice in today’s zero-interest-rate environment.
Regardless of how you choose to invest, drones will be transforming the purchase-to-home experience for consumers in the coming years. It’s just another reason why cutting-edge technology will continue to drive mass societal change this decade, and by extension, mass wealth-creation for investors who align themselves accordingly.
Have a good evening,