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Don’t make this mistake when investing in the AI Revolution
Can you guess which technology this quote from The Washington Post refers to?
“The discovery and perfection of XXX is so important, so revolutionizing and so far-reaching in its effects that we need the perspective of time fully to realize the scientific situation.”
That is a quote from the January 1, 1880, issue referring to the electric light bulb.
One can only imagine how strange it all seemed. People had experienced light from candles, fires, and kerosene lamps. Some even had seen arc lights. But no one had ever experienced anything quite like what Thomas Edison was promising – light from a tiny bulb with no smoke, flame, wick, or gas.
Below is an image of Edison’s light bulb from 1879.
Credit: ZU_09
People could look at a light bulb for the first time and easily visualize it in their homes. But it’s what they couldn’t imagine that would go on to make the most difference in their lives.
The Beginning Happening Now
In a world of new discoveries, people often misjudge the significance. They underestimate what a breakthrough technology will eventually become.
As marvelous as the light bulb was, it wasn’t the end of Edison’s revolution.
It was the beginning.
Once electricity began flowing into American homes and factories, it changed everything. Soon, innovations that would have seemed unimaginable just months/years before were sprouting up everywhere.
Electric motors transformed factories. Electric refrigerators replaced iceboxes. Washing machines made household life easier. Eventually, radios and televisions transformed entertainment and communication.
Air conditioning helped reshape where Americans lived and worked. Computers and the Internet changed everything about … well, everything.
Eventually, that same electrical infrastructure would power data centers and nearly every piece of technology we depend on today.
Of course, none of that was obvious to the people witnessing Edison’s light bulb in 1879.
They could see a light bulb.
They couldn’t see what electricity and a nationwide infrastructure would make possible.
Looking Beyond the Light Bulb
Right now, when people think of AI, they think about ChatGPT, Google’s Gemini or Anthropic’s Claude.
What if those tools are AI’s light bulb? These applications are just a glimpse of a technology that will eventually become embedded in every part of our lives.
AI’s future is going to be built on AI agents at homes and offices, robotics, autonomous vehicles, personalized healthcare, disease prediction, and workforce automation at a wide scale.
Building that future will require an enormous amount of infrastructure.
So, who is selling the technology to help build out this AI future?
That’s the question investing legend Louis Navellier has been asking. As hyperscalers race to build these data centers, which partners can truly deliver at the required scale?
That line of thinking put Seagate Technology Holdings (STX) on Louis’ radar.
One of the vital components of the AI revolution and the data center boom is data storage, and Seagate is a leader. This is from Louis’ original analysis of the stock in Growth Investor.
The biggest hyperscale and cloud data centers around the world store about 90% of their AI data on hard drives. Simply put, hard drives are six times more efficient than solid-state drives (SSDs) and use four times less operating power per terabyte than SSDs. Hard drives are also nine times more efficient than NAND.
As a result, hard drives have become the backbone of AI data storage – and there is one company that develops AI-capable hard drives better than any other company: Seagate Technology Holdings plc (STX).
The stock has risen more than 250% since Louis’ recommendation and is still trading below his buy limit price.
Those are the kinds of opportunities that emerge when you stop thinking about what AI is doing today and focus more on what is coming.
Louis believes the opportunity is about to get a lot bigger. He calls it the AI Reset.
The light bulb impressed people in 1879, but it only gave them a glimpse of what electricity wired across the country could accomplish. Just like then, any AI applications that impress you today only represent a small part of what is going to come.
That next phase will require a huge amount of energy, computing power, data storage, networking and other specialized infrastructure. And that will create a new group of stock market winners.
Louis has been digging through the market looking for the companies he believes are best positioned for this next phase of the AI buildout.
He’s laid out his complete thesis in a special presentation, including what he believes is about to change, why it could happen much sooner than most investors realize, and the companies he believes could benefit most.
You can watch Louis’ presentation right here.
The first people to see Edison’s light bulb weren’t wrong to be amazed. They simply couldn’t see far enough ahead.
Nearly 150 years later, investors may be making the same mistake with AI. The breakthroughs we’ve witnessed so far have already been extraordinary.
But if Louis is right about what’s coming next, the most important part of the AI revolution may be the part we haven’t seen yet.
Enjoy your weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
