Hello, Reader.
This week started not with a bang, but with an outage.
On Monday, Amazon Web Services (AWS), the cloud arm of Amazon.com Inc. (AMZN), suffered a worldwide outage, affecting more than 1,000 companies and millions of online users.
On top of Amazon’s own services getting hit, websites and apps like Canvas, Facebook, ClassPass, and Fortnite were impacted. Mobile payment services, like Venmo, and airlines, including Delta and United, also reported issues. The list goes on.
As for the financial impact, CNN estimates it will be in the billions.
This mishap tells us one thing for sure: Much of today’s digital economy runs on AWS, and that dependence makes them vulnerable
Likewise, investors overly concentrated in AI face the same kind of vulnerability.
The tech and AI sphere is only expanding, and there are, of course, still innovative, promising AI leaders out there.
But the safest way to navigate these kind of black-out moments in your portfolio is by staying diversified and investing in “AI Survivor” companies – or “outage-proof” stocks, some of which are even powering the AI Revolution itself.
So, in today’s Smart Money, I’ll explain why the recent AWS outage – and its ripple effects across countless companies – should be a wake-up call to investors.
Then, I’ll show how you can stay profitable, even if Big Tech’s power goes out.
Let’s dive in…
Familiar Volatility
The cause of Monday’s outage was officially described as a domain name system (DNS) error. Basically, DNS translates website URLs into numeric addresses, making it possible for websites and apps to load on devices connected to the internet.
This apparently common technical glitch, which occurred at one Northern Virginia facility, disrupted the days of millions of people.
This outage recalls the CrowdStrike Holdings Inc. (CRWD) outage from July 2024 – the largest IT failure in history. When millions of Windows systems went down, CrowdStrike’s stock plunged that day, opening 14% lower and closing down about 11%.
Amazon didn’t suffer the same fate. In fact, it ended this week in the green.
But this resilience may be temporary.
Major cloud outages like AWS’s will likely become more common, especially with the increasing complexity of cloud infrastructure and the massive expansion of AI services.
What’s more , Business Insider reported just last week that internal AWS documents reveal a “fundamental” shift in how startups are allocating their cloud budgets. Many are delaying traditional AWS adoption and “diverting spending toward AI models, inference, and AI developer tools.”
This shift is hurting AWS. The company was forced to raise prices on Nvidia Corp.’s (NVDA) Blackwell chips, which has frustrated customers.
In short, Amazon is showing some cracks, even beyond its power outage.
Surely, AI and tech aren’t going anywhere – but investors might find bigger opportunities beyond the familiar Big Tech names…
Stable Stocks
One of the best ways for investors to minimize their exposure to volatility in the unpredictable AI sphere is to focus on AI Survivor companies – stocks that feel little to no disruption from the digital world.
Last week, I told you to shift your attention toward utilities and miners instead of sticking to tech giants. The AWS outage only reinforces my thesis…
In the end, the market may reward not those who build the virtual world, but those who power it.
The AI Revolution will depend on the miners and power producers who turn electricity and metal into the blood and bones of artificial intelligence.
One of the biggest sources of power is aluminum. And demand is accelerating.
Every high-voltage line that feeds an AI data hub consumes one to two tons of aluminum per megawatt delivered. Each new stretch of long-distance transmission deepens the world’s appetite for this versatile metal. From 104 million tons of demand in 2024 to an estimated 120 million by 2030, global aluminum consumption is set to grow almost as relentlessly as copper’s.
The aluminum market appears to have caught the scent of this rising demand. Prices have climbed roughly 10% year to date, reaching a new three-year high – welcome news for a particular aluminum holding at Fry’s Investment Report. In fact, my aluminum play saw a 13% jump following the company’s third-quarter earnings report this week.
Beyond aluminum, even precious metals like silver and platinum feel the tailwind of AI-driven demand. Many hyperscalers power their facilities with solar installations, and so the solar industry’s demand for silver is soaring.
According to the Silver Institute, the solar industry’s annual silver demand soared more than 65% during the last two years and now consumes 197.6 million ounces – or about 24% of the annual mined silver supply.
Looking ahead, photovoltaic silver demand could jump another 35% over the next five years, putting another one of our portfolio holdings – already up 24% – in an even stronger position.
There’s more to investing in AI than just putting your money into software and GPUs – it also takes real resources: energy, infrastructure, and metals.
No one knows for certain how this AI race will play out, or what companies will face outages along the way. That’s why my Fry’s Investment Report portfolio includes select non-tech companies positioned to thrive no matter what unfolds.
Click here to learn more about the AI Survivors that will deliver steady, lasting returns
Regards,
Eric Fry
P.S. Next Tuesday, October 28, InvestorPlace’s Louis Navellier is teaming up with two bright young analysts to reveal a new data-driven system that could pinpoint hundreds of potential doubles. They’re even giving away two “buy” picks and one “sell” recommendation to everyone who attends. Claim your spot here now.
