When it comes to making great investments, few stocks can match the power of “inevitables.”
“Inevitables” is a concept popularized by legendary investor Warren Buffett.
It’s his term for big companies that dominate their industries. The companies have such well-entrenched and well-defended spots in the marketplace that their continued success and customer loyalty is virtually inevitable. This makes “inevitables” excellent long-term investments that allow you to make big money while still sleeping well at night.
In 1996, Buffett specifically pointed out the extremely strong position the Coca-Cola Co. (KO) held in the beverage industry… and how it would enable the company to prosper for generations.
As you can imagine, Buffett loves to own inevitables. He’s been a big shareholder in Coca-Cola for decades… and made billions of dollars doing it.
I like to take Buffett’s concept a little further. I love to invest in massive business trends that are so entrenched… have such bright futures… and such guaranteed future demand that strong growth is inevitable… virtually guaranteed.
That’s why I believe investing in the AI Revolution is one of the best financial decisions you can make right now.
In this report, I’ll show you why strong long-term growth in artificial intelligence is inevitable… how the next wave of the AI Revolution is about to rewrite the rules of business, creating a new set of winners and losers…
And I’ll detail my five favorite stocks to own as a way to profit from it.
AI’s Major Turning Point
For years, AI has mostly been a behind-the-scenes tool, powering search engines, chatbots and recommendation algorithms.
For example, ChatGPT reports that it has approximately 300 million active users worldwide on a weekly basis. The United States accounts for about 14% of this user base, or roughly 42 million users, as of December 2024.
But here’s where things get interesting. Check out this breakdown of ChatGPT’s users in terms of demographics, as of April 2025, from Similarweb.
This data indicates that more than half of ChatGPT’s American users are between 18 and 34 years old.
It also shows that the overwhelming majority of Americans over 35 have never interacted with ChatGPT.
Now, chances are these “older folks” are regularly interacting with AI in some form. They just didn’t know it.
But that’s all changing. In the not-too-distant future, I predict more people will regularly use AI than ever before. They will do so on a daily basis – and at a level that will become almost instinctive.
Eventually, we won’t even think twice about it… just as we don’t think twice about using the internet today.
That’s because AI is breaking out of the digital world and stepping into the real one – running self-driving cars and equipment, automating factories, training robotic workers… even building “digital twins” of entire cities.
This shift is massive. And investors who see where it’s headed right now stand to benefit the most.
Explosive gains in speed and processing power are colliding with breakthroughs in data deployment – unlocking capabilities that, just months ago, felt like pure science fiction. But now, they’re becoming reality.
According to NVIDIA Corporation (NVDA) CEO Jensen Huang, this shift could amount to a $100 trillion opportunity.
And that checks out – because if history has taught us anything, it’s that the biggest booms don’t happen when a technology is first invented…
They come when that tech moves from concept to real-world adoption. Just look at past moments when technology moved from early development to mass adoption – turning smart investors into millionaires along the way.
The Internet Revolution
The internet started as a niche government project, but once companies like Amazon.com, Inc. (AMZN) and Alphabet Inc. (GOOG) figured out how to monetize it, the boom took off. Early investors in these companies saw astronomical returns. Case in point: Amazon is up 176,000% since its IPO, in May 1997.
The Smartphone Explosion
When Apple Inc. (AAPL) launched the iPhone in 2007, it was a groundbreaking product – but the real boom came when the app economy exploded.
For example, there are nearly two million apps on the Apple Store alone. And they generate over $1 trillion in total billings annually.
This shift minted fortunes for early backers of Meta Platforms, Inc. (META), Uber Technologies, Inc. (UBER), and countless others.
Right now, AI is hitting that same critical tipping point.
We’re at AI’s “iPhone moment” – when real-world applications are starting to take off like rockets.
Robots, self-driving cars and drones aren’t the future anymore – they’re here, and they’re scaling fast. They are becoming the backbone of modern infrastructure. They are revolutionizing logistics, streamlining supply chains and changing the way we move through cities.
For example, Walmart Inc. (WMT), the largest private employer in the U.S., is rolling out fully automated distribution centers using a combination of AI and robots. No people (or at least far fewer people).
It’s not that autonomous vehicles (AVs) or robotics are brand-new ideas, but that, for the first time, they can actually be deployed at scale in ways that were impossible just a few years ago.
Prepare for a Massive Disruption
Soon, the AI Revolution will move far beyond chatbots and content generation. It will reshape industries at an extraordinary pace.
As this new era of AI takes hold, we will see a clear divide between winners and losers.
On one side will be the companies leveraging AI to unlock efficiency and boost profitability. Some companies will use AI to cement their market leadership, while others will use it to supplant the current king of the hill.
On the other side of the divide will be companies that fail to adapt. They will stagnate – or even collapse – under the weight of increased competition.
This stark divide is going to lead to a market rupture – and create a vast chasm between the haves and have-nots.
And that leads me to how you can protect your portfolio – and position it to profit…
That’s where Stock Grader comes in.
I’ve perfected Stock Grader over the past four decades to help me identify market-beating picks year after year. Now, there are a lot of mechanics behind the scenes, but here’s what you need to know…
We look for high marks in eight fundamental metrics and in one quantitative buying metric. This gives us our Fundamental Grade and our Quantitative Grade.
Then, we blend these grades, giving the stock a Total Grade of A through F:
- A = Strong Buy
- B = Buy
- C = Hold
- D = Sell
- F = Strong Sell
Stock Grader is available to all my paid-up subscribers. Learn more about me and my premium services – and how to subscribe and gain access to Stock Grader – here.
In fact, Stock Grader has identified five top picks that are set to soar from this next wave of AI.
Every one of these picks earns a “Buy” rating. And each is positioned to capture a piece of the most lucrative phase of the AI Revolution.
By the time Wall Street fully catches on, the biggest gains may have already been made. That’s why it’s critical to act now.
Let’s dive in…
5 Picks for the Next Wave of AI
Next Wave of AI Pick No. 1: The Transmission King of the World
The first company I want to highlight was founded back in 1915 by James A. Allison, a trailblazer in the American auto business. (He also helped to construct the Indianapolis Motor Speedway.)
It was the first manufacturer of heavy-duty automatic transmissions. Today, the company is considered the gold standard for transmissions in heavy-duty trucks. It’s also the largest manufacturer of medium- and heavy-duty fully automatic transmissions in the world, as well as a leader in electrified propulsion systems.
I’m talking about Allison Transmission Holdings, Inc. (ALSN).
What sets transmissions built by Allison apart is that they typically need less routine maintenance, use less fuel and last longer than their competitors.
You’ll find Allison transmissions in heavy-duty pickup trucks, construction vehicles, trash collection trucks, fire and emergency trucks, buses, motorhomes and recreational vehicles. You’ll even find them in equipment used for oil and gas drilling and mining as well as tactical/military vehicles.
The Indianapolis-based company operates in more than 150 countries worldwide and has more than 1,600 distributor and dealership locations globally.
Allison Transmission hasn’t been content to rest on its legacy, either. The company has been using AI in simulation labs at the Allison Performance Innovation Center to test products in physical and virtual environments.
It also has made investments in early-stage AI startups through its venture capital arm, Allison Ventures. For example, in October 2024, the company announced a strategic investment in Agtonomy, an AI automation software company that integrates its software into tractors and other agricultural equipment.
Its fundamentals are strong, too. For fiscal year 2024, Allison Transmission reported total sales of $3.23 billion and earnings of $731 million, or $8.31 per share. That represented 6.3% annual sales growth and 8.6% annual earnings growth. Both also beat analysts’ estimates for earnings of $8.22 per share and sales of $3.22 billion.
Looking forward to fiscal year 2025, Allison expects total sales between $3.2 billion and $3.3 billion and earnings between $735 million and $785 million. Analysts currently project $8.82 per share in earnings on $3.28 billion in sales.
Next Wave of AI Pick No. 2: The Leader in Technology Infrastructure
My next pick is a leader in technology infrastructure. Practically all internet traffic utilizes a form of its technology, with more than 99% of internet traffic crossing through its solutions.
The company’s technology is also vital to smartphones, service providers, data centers, the cloud, broadband connectivity, factory automation and more.
So, as AI gets deployed in more electronic devices, I think it’s safe to say Broadcom, Inc. (AVGO) will have a hand in it.
So, what exactly does Broadcomdo? The Silicon Valley company provides:
- Storage and systems (adapters, switches, blades, hard disk drives, software, etc.)
- Wireless products (amplifiers, filters and RF components)
- Wired connectivity (ethernet network adapters and switching software, processors, etc.)
- Optical products (LED displays, fiber optics, encoders, switches, etc.)
- Software (Broadcom, mainframe and enterprise) and cybersecurity.
Broadcom also has its hand in AI. In early 2025, the company introduced Jericho3-AI, which will enable the highest-performance fabric for AI networks. The company also provides an environment where its custom AI chips can network and communicate with one another, offering Network Interface Cards (NIC), ethernet switches optimized for AI traffic, silicon photonics modules and ethernet serializers/deserializers.
Broadcom also has begun to dip its toes into quantum computing. Partnering with Caltech, the company will establish the Broadcom Quantum Laboratory on the school’s campus. This will be a physical collaboration space to bring together experts in the fields of quantum computing, quantum sensing, quantum measurement and quantum engineering. And Broadcom’s investment in this partnership supports joint programming and research to accelerate discovery.
Looking at the financials, analysts expect full-year 2025 earnings of $6.64 per share, up 36.3% from earnings of $4.87 per share a year prior, on revenue of $62.53 billion, up from revenue of $51.57 billion a year ago by 21.3%.
Next Wave of AI Pick No. 3: The AI Travel Agent
While travel agencies still garner their fair share of business, most of us book our travel – airfare, hotels, car rentals, etc. – online. According to Statista, 72% of folks prefer to book their trips online, which is great news for my next pick.
This company got its start in April 2000 as an online travel booking site in India to give travelers the power and ease to plan their own trips. The ease of booking flights and hotels, as well as holiday packages, in one place with the simple click of a mouse helped the company grow in popularity and expand its business beyond India.
Today, MakeMyTrip Ltd. (MMYT) offers booking ease to travelers in Colombia, India, Indonesia, Malaysia, Peru, Singapore, Thailand, the United Arab Emirates, the U.S. and Vietnam. The company offers instant and easy travel bookings through its three main brands: MakeMyTrip, Goibibo and Redbus. MakeMyTrip boasts of more than 68 million monthly active users and says its app has been downloaded more than 420 million times.
Plus, MakeMyTrip is one of the very first Indian firms to use generative AI in its products. In May 2023, the company started rolling out a voice chat service powered by AI. At the time, it was only the second major Indian company – following Air India – to start taking advantage of the AI Revolution.
MakeMyTrip is using Azure Open AI tech from Microsoft Corp. (MSFT) for its chatbot. The voice assistant, designed to help customers book flights and other travel needs, is also being deployed on the firm’s mobile app and website.
As far as its numbers are concerned, analysts are calling for earnings of $1.33 per share and revenue of $993.82 million for the current fiscal year. That represents a 9.01% rise in earnings from $1.22 per share and a 21.6% increase from revenue of $817.42 million in the last fiscal year.
Next Wave of AI Pick No. 4: Helping the Average Investor
This next pick is likely a familiar name to many of you, as it rose in popularity among investors during the pandemic.
The reality is that five years ago, most folks were on lockdown at home, and they had a lot of extra time on their hands. Many decided to use this time to dabble in the stock market, and this company offered an accessible platform to trade stocks.
Of course, I’m talking about Robinhood Markets, Inc. (HOOD), which says it aims to “empower a new generation of investors,” giving even the most novice of investors the opportunity to participate in the financial markets. The company offers plenty of educational resources to help new investors get started, including simplified investment terminology, “how to get started” guides and investment analysis pointers.
Robinhood notes that it was founded to help the average investor trade stocks without paying big commissions for every trade. Today, Robinhood is a registered broker-dealer enabling users to trade stocks, ETFs, ADRs, options, gold and even cryptocurrencies.
The latter is particularly interesting – and a big opportunity for the Silicon Valley company.
In the cryptocurrency space, Robinhood offers investors exposure to popular digital assets like Bitcoin, Ethereum and many more by enabling them to easily trade crypto without the complexities of blockchain transactions. Today, cryptocurrency accounts for a significant portion of Robinhood’s trading revenue and will likely be an important part of its growth moving forward.
Robinhood is also looking to AI to further its growth in July 2024 by acquiring Pluto, an AI-driven research platform. This partnership will provide Robinhood’s investors with custom trading strategies along with AI insights. The acquisition aims to enhance the user experience while fueling Robinhood’s mission to “democratize finance for all.”
Looking ahead, Robinhood’s exposure to AI-driven crypto trading and expanding financial services will set the stage for explosive gains. As one of the leading crypto-powered stocks, HOOD is a winning investment that will keep on winning.
For 2025, analysts are expecting Robinhood to post $3.7 billion in revenue, up 25% from $2.95 billion in the previous year. Earnings are expected to take a dip, to $1.53 per share compared to $1.85 in the previous year. However, I should note that analysts have doubled first-quarter earnings estimates in the past three months, as of this writing.
Next Wave of AI Pick No. 5: Changing How People Listen to Music
Back in 2008, this company introduced a music streaming platform that changed the way the world listened to music. But the company doesn’t just offer music through its platform; it also provides podcasts and audiobooks.
Today, it gives listeners access to more than 100 million tracks of music, 5 million podcasts and 350,000 audiobooks.
Considering the plethora of choices, it’s not surprising that my last pick, Spotify Technology S.A. (SPOT), is the most popular audio streaming service in the world. The company boasts that it has more than 574 million users, which includes 226 million subscribers. Those listeners hail from more than 180 markets.
In an attempt to anticipate its users’ listening preferences, Spotify started adopting artificial intelligence more than 10 years ago. The Swedish company employs AI in its recommendation algorithms, and Spotify aims to better understand its users’ listening patterns by expanding its partnership with Alphabet Inc. (GOOG). Spotify will now use Google Cloud’s large language models, or LLMs, to determine which podcasts and audiobooks a listener may be interested in based on previous interactions.
This expanded partnership is part of Spotify’s efforts to boost earnings and revenue streams in its podcast and audiobook offerings.
Currently, the company offers Premium and Ad-Supported memberships. Premium gives users unlimited online and offline access to music and podcasts, without ad interruptions. And Ad-Supported also provides unlimited access to its library but with advertising breaks.
This should all lead to higher sales and earnings, which is why for fiscal year 2025, analysts expect earnings of $10.52 per share and total revenue of $18.13 billion. That would amount to nearly double the $5.50 per share in earnings from the previous year, as well as a revenue boost of 15.7%.
Wrapping Up
I’m convinced that the AI Revolution is one of the biggest “inevitables” in the history of the market.
But in order to profit, you’ll need to own fundamentally superior stocks that are poised to benefit.
The five stocks we discussed today fit this description to a “T” and are great bets for your money. But you should know that there’s plenty more where that came from…
In the meantime, I hope you found this special report useful. Before we go, let me remind you that you’re now also a member of my free Market 360 newsletter.
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Sincerely,
Editor, Market 360
