Editor’s note: “AI Is Fueling a Colossal Stock Market Shift” was previously published in October 2023. It has since been updated to include the most relevant information available.
Does it feel like something is amiss in financial markets? Like something big is coming, but you don’t know what?
If so, we think your hunch is right.
Something big is coming to Wall Street. And the world’s most powerful people and companies are betting the farm on it.
So, what’s on the horizon? A major market reshuffling.
Elon Musk and Tesla (TSLA) are betting big on this reshuffling. So is Mark Zuckerberg and his whole team at Meta (META). Same with the folks at Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN).
This reshuffling will reshape Wall Street. It will mark the biggest change investors have seen in years.
And it all has to do with the one technology that everyone has been gushing about recently: artificial intelligence.
AI: Reshaping Every Facet of Our World
We think it’s fair to say that AI will change the world profoundly. Self-thinking machines and software algorithms have the potential to improve productivity exponentially. In fact, over the next 20 years, they’ll likely transform the global economy in more profound ways than even the internet has over the past 20 years.
But AI faces one critical problem: too much demand and not enough supply.
Every company out there wants to invest in AI, create new programs, and use artificial intelligence to improve sales, marketing, customer service, product creation, and more.
Six months ago, according to Gartner, less than 20% of companies were using AI in their business operations. Today, nearly 60% of companies are deploying this technology. That’s a 3X increase in six months.
And those companies are going “all-in” on AI.
A recent KMPG survey of U.S. CEOs found that nearly 75% will make AI a “top investment priority” in 2024. About 85% of those CEOs believe they will see a return on those AI investments within five years.
The demand for AI is enormous right now.
But the supply is scant.
Behind The Race to Boost Supply
AI programs like ChatGPT are built on top of advanced chips. And those chips are incredibly complex. They take a lot of time and money to make – so much so that chipmakers are finding it difficult to keep up with demand.
Taiwan Semiconductor (TSM) is one of the leaders in this chip market. And it expects the market to stay significantly supply constrained for at least another 18 months.
So far, these supply constraints have been a good thing for chip makers.
Thanks to limited supply, companies like Nvidia (NVDA) have been able to sell every chip at a premium price point. As a result, Nvidia’s revenues and profit margins have surged higher in 2023. NVDA stock has followed suit, rallying almost 240% from January to August.
But since then, NVDA stock has crashed almost 20%, nearly falling into its own mini bear market.
Once a huge tailwind for NVDA stock, these supply constraints are starting to rear their ugly head.
Previously, Nvidia’s customers were more than willing to pay a premium and wait months on end for their AI chips. But that’s no longer proving true.
And now those same customers are going at it themselves.
They’re making their own chips.
Shifting Toward Custom-Built AI Chips
This is the massive market reshuffling we’re talking about.
Analysts project the AI Revolution will create a $15.7 trillion investment opportunity over the next several years. That means that economically speaking, the AI opportunity will be nearly as big as the entire U.S. economy.
Previously, it looked like all (or at least a bulk) of that $15.7 trillion would flow into Nvidia, TSMC, and other major AI chipmakers.
Now, though, that $15.7 trillion is being reshuffled.
Instead of flowing into Nvidia and other big chipmakers, that cash will be funneled to smaller chipmakers that are better equipped to create specialized, custom AI chips.
That’s why big semiconductor stocks have been breaking down. They’ve completely lost their uptrend and have fallen below their all-important 200-day moving average.
It’s also why the broader market has been suffering. Big chip stocks are important for the stock market. They pulled the market higher in the first half of the year. But over the past few months, they’ve been dragging it down instead.
The bad news is this reshuffling is just getting started. Bigger market shocks are on the way.
But the good news? You can make huge money in this reshuffling.
The Final Word on the AI Market Turning Point
We’re seeing a reshuffling unfold, after all – not an ending. And that means that all the money that was being piled into NVDA and other major chipmaker stocks will go somewhere else.
But where?
That’s the trillion-dollar question we aim to answer in our first-ever emergency broadcast on this market reshuffling.
In this broadcast, I unveil the name, ticker symbol, and key business details for the No. 1 stock to buy to benefit from this $15.7 trillion market reshuffling. And I’ve also compiled a portfolio of the 7 best stocks to buy to play the second wave of the AI Boom in 2024.
But you have to hurry – because my publisher told me they are taking this broadcast offline at midnight tonight.
That means this is your final chance to capitalize on the $15.7 trillion AI Turning Point.
