My ski boots are worth a small fortune.
And no, I’m not talking about a vintage item that will make a killing on eBay Inc. (Nasdaq:EBAY).
It’s all about Mellissa…
Let me explain. See, I’m a passionate skier who would really like to be able to tackle the entire mountain – from steep slopes to deep powder to intense forests – like an expert.
As part of my program to improve, I turned to Mellissa for help. That’s the nickname I gave the artificial intelligence (AI) “coach” I recently demoed inside my Tecnica Mach 1 high-performance boots.
The feedback she gave me led me not only to an important personal breakthrough, but the process underscored why I tell tech investors that AI is set to play a major role in all of our lives.
From your mobile phone, tablet and desktop computer to your smart TV and speakers to your car and chat bot, AI is an unstoppable tech force that will be worth at least $190.6 billion by 2025.
And today, I’m going to reveal a beaten down AI leader that is set for a solid market-beating rebound…
Teaching to “Carve”
I first learned of the Carve AI system for skiers from my wife. I had been complaining about the high cost of ski lessons, which run about $450 for a roughly 3-hour session.
The idea behind the $279 Carve system is to harness the power of AI for what the company calls an “adaptive” coaching engine. That means you have an onboard digital coach assessing the quality of your turns, balance and more in real time.
After using Carve for just a half day, I made an important discovery. Mellissa scored my turns to the left as more consistently successful than to the right, but making equidistant turns is essential if you want to ski the entire mountain with confidence.
I’m sharing all this with you today so you know that when I say AI is set to change many aspects of our lives, I speak from personal experience.
Of course, another massively impactful technology is about to make waves this year – one that’s capable of completely changing life as we know it.
In fact, I wouldn’t be surprised if it created the world’s first trillionaire. And the technology that’s making this all possible is already starting to pop up in cities across the country, tucked away in what I’m calling “M-Boxes.”
The actual boxes are different sizes and shape. No matter. It’s what’s inside – and the massive profit potential it represents – that could change your financial way of life in ways that most people only dream of.
A $190 Billion Market
I’m not the only one who sees big money in this field. MarketsandMarkets says just cloud-delivery of AI systems will be worth $190 billion in six years. But I believe that’s on the low end.
Fact is, companies all over the world are building AI into their products and services, as well as into backend platforms that improve productivity and profit margins. Accenture says that by 2035, AI can double economic growth in the 12 most advanced economies that now have a total value of $61 trillion.
And I have uncovered a fallen tech star that is grossly oversold but offers huge upside, in no small measure because of its cutting-edge, AI-centric devices.
A Brilliant AI Future
I’m talking about Nvidia Corp. (Nasdaq:NVDA).
This chip maker is better known for its gaming offerings in graphic processors (GPUs). But it also makes sophisticated devices that are tailor made for AI.
And the range of industries looking to build in more AI smarts is pretty staggering. Healthcare, life sciences, energy, financial services, higher education, defense, manufacturing, and entertainment are all looking to AI to help drive innovation.
Nvidia’s bold moves here didn’t come cheap. The firm spent $2 billion in research funds to develop its current line of AI chips. It’s an investment that should generate massive returns in the years ahead.
Nvidia’s Tesla P100 chip, for example, uses15 billion transistors, or twice as many as the firm’s previous industry-leading chip, the Maxwell.
To show off its muscle, Nvidia packed eight of these chips and state-of-the-art AI software into a $129,000 computing beast called the DGX-1. It’s basically a sleek AI computer server optimized for deep learning and analytics accessible through cloud tie up with Nvidia.
The system comes with built-in software, and onboard tools that are designed to enhance collaboration. Nvidia says it set six records in AI performance, including object detection and image classification.
Firing On All Engines
Of course, there’s more going on here than AI since Nvidia builds a wide range of souped-up GPUs. It offers us plays on data centers, machine learning, and healthcare, to name a few.
But just to give a sense of the upside ahead, let’s take a look at the company’s foray into one of its biggest markets – self-driving cars – and the coming auto standard that will affect nearly all of us.
Analysts say that by 2025, nearly every one of the more than 80 million cars made each year will be supercomputers on wheels. Nvidia’s powerful GPUs have been tweaked to deliver robust performance, and now underpin a platform known as advanced driver’s assistance systems (ADAS).
These systems help make humans much better drivers, with such features as heads-up displays in the dash or infotainment centers, lane-return assistance, collision avoidance, voice-guided navigation and adaptive cruise control that keeps the car in pace with those around it.
It’s a great market for Nvidia. Grandview Research says this segment is growing at 19% a year, and will be worth $67.4 billion by 2025.
Nvidia is working with such automakers as Audi, Mercedes Benz, Tesla, Toyota and Volvo… The list of auto suppliers would run several pages. Nvidia also has partnered with several makers of heavy-duty trucks to get them ready for driverless deliveries.
Poised for a Rebound
In other words, this is at least a great twofer…
But let’s be clear. All great growth firms hit speed bumps on their road to massively higher sales. And Nividia surely fits the bill. The firm had around $2.2 billion in sales in the fourth quarter, which was well below estimates.
Shares fell more than 10% on the news, and now trade for just half of their of their 52-week high. As a long time Nvidia watcher, I see this as a great opportunity.
See, Nvidia still managed to grow a hefty 40% in 2018, which is even faster that 2017 growth rates. And while Wall Street now thinks that sales growth will slow to 20% in 2019, know that Nvidia has ended up growing at a far faster pace than what Wall Street had forecast at the beginning of the year.
And I firmly believe the current year will be no exception.
In fact, I’ll boldly predict that Nvidia will have nearly $5 billion in adjusted earnings this year, up from $2.4 billion in 2017.
Fact is, all of the elements are in place for a sharp rebound. If shares just moved back the recent five-year high, we’re looking at a double from here.
That’s the kind of upside we’re always on the hunt for here at Strategic Tech Investor where we have proven time and again that the road to wealth is paved with tech.
Cheers and good investing,
Michael A. Robinson