Elon Musk has a new frontier he wants to conquer.
And no, this is not part of his recent rocket launches, nor his bold plans to get humans to Mars.
What I’m talking about is sitting right between your ears.
Let me explain. The famed SpaceX pioneer has just announced plans to implant chips in human brains as early as next year.
The idea is to connect our minds directly to a computer. It’s a field generally known as brain computer interface, known in the field as BCI.
Then again, Musk has been at this for several years now. He officially got started back in 2016, when he unveiled privately held Neuralink Corp.
And while I believe Musk has a good chance of achieving his BCI “moonshot,” he’s years away from having any kind of real sales.
But don’t worry. I have an investment to tell you about that is essential for this technology. And it offers us lots of upside right now, today…
A Good Idea
To be completely candid, I love the idea, and have been a big supporter of this technology for at least a decade.
It can achieve two very powerful objectives:
- Help millions of folks cope with debilitating brain diseases, like Parkinson’s, or deal with traumatic cranial injuries.
- Wire up humans to supercharge our IQs by plugging us into computers and giving us the power of AI on demand.
Musk obviously faces no end of hurdles… like successfully testing prototypes, convincing customers to let someone wire their brains, and also actually making sales.
At this point, however, he isn’t hurting for investors. In a recent story, NBC News said that Musk disclosed in a recent SEC report he has already raised $39 million in venture funding.
In other words, he’s a long way from taking Neuralink public. But savvy tech investors don’t have to wait to see how it plays out with Musk.
Fact is, there’s a well-established field of technology vital for BCI success.
Most investors would immediately think of computer chips. And while they will play a key role in it all, I’m thinking of a field that defines supporting technology.
They are tiny devices used throughout the global tech ecosystem, meaning you’ll find them in everything from connected cars to rocket ships.
I’m talking about micro-controllers, which are tiny little computers. Though they are small, they pack a punch, providing a central processing unit, memory and all the needed codes to help them dictate instructions to larger devices.
And they’re worth a small fortune. Grand View Research says the field is growing at roughly 19% a year. By 2025, the sector will have a value of $35.3 billion.
The first micro-controllers were designed in 1972. A firm at the heart of this industry has been designing and building them since it was founded in 1989.
Arizona-based Microchip Technology Inc. (MCHP) now sells roughly one billion micro-controllers each year. It’s also a clear beneficiary of the increasing use of chips and technology in so many industries.
Credit goes to a steady flow of new kinds of micro-controllers coming to market, the fruit of nearly $826 million spent on R&D in its fiscal 2019.
Two Game Changing Mergers
While micro-controllers will remain a core focus for Microchip Technology, the firm made a bold stroke in January 2016, buying Atmel Inc., for more than $3 billion.
While Atmel had a strong presence in the micro-controller market, it was also a strong player in the field of analog chips – and more important, in brain computer interfaces (BCI).
You see, Atmel has been a thought leader in BCI for quite some time, and provides many of the key chips used in today’s man-machine interface systems.
In fact, those BCI-powered exoskeletons used key tech provided by Atmel. The firm’s ATmega128 MCU powered visual stimuli generator, and a signal processing unit, converts the brain’s key signals into electrical and mechanical actions.
Designing products like this isn’t easy. The human brain sends out a lot of electrical activity – heavy interference as far as these systems are concerned.
Atmel’s engineers had to work hard to tune out the noise, and focus on the specific signals that the brain is sending to a device. That kind of research has put Atmel years ahead of the competition in terms of system design.
And in its search for more growth, Microchip made another big move in May 2018. The firm rounded out its tech offerings when it bought Microsemi Corp. for roughly $8.3 billion.
The pact gives the merged firm better supplies for data centers, communications and defense. Microsemi also makes chips and related products for voice, medical and industrial applications.
A Broad Tech Play
Even as it moves to have more product diversification and geographic reach, you should know that Microchip will still keep a strong focus on micro-controllers.
You may not be familiar with these little devices, but they are all around you.
Today’s engine control systems, for example, use all kinds of them. A simple engine water pump boasts four different kinds.
Those miniaturized implantable medical devices that are saving so many lives today wouldn’t even be possible without these tiny motors.
You’ll find micro-controllers in your living room, operating your TV’s remote control. They’re in the power tools in your garage. They’re even tucked inside your children’s toys.
Frankly, the array of industries that Microchip Technology serves is almost mind-boggling. Its sales team calls on key tech designers in the fields of:
- Aerospace & Defense
- Industrial Machinery
- Communications Equipment Industry
- Computer Hardware Industry
- Consumer Electronics
Add it all up and you can see that Microchip is a tech powerhouse. It’s also no slouch when it comes to sales and earnings.
For its Fiscal 2019 ended March 31, the firm grew its sales by 34.4% to $5.35 billion. Earnings did even better, rising 39.4% to $356 million.
The good news for us is that these numbers are pretty much in line with their three-year averages.
That tells me the firm’s earnings could double in less than two years.
In other words, this is a stock that can really help you build your net worth pretty quickly.
And you don’t have to plug your brain into a computer to figure out how that can put you on the road to financial freedom.
Now when it comes to state-of-the-art technologies like BCI, you should also know about something my Money Morning colleague and renowned pattern trader Tom Gentile has cooked up.
Part super-computer, part artificial intelligence (AI) and part quant-trading algorithm, Tom’s Alpha-9 can carry out an incredible 15.8 billion calculations per second.
This system generates a minimum of 23,400 proprietary Alpha Channels on just a single stock each day the market is open. Tom looks at S&P 500 stocks, so that adds up to 11.7 million Alpha Channels per day. Now, when these channels line up in a specific way, they form a highly accurate trading signal.
The best part? It only takes five minutes per day to take advantage.
Cheers and good investing,
Michael A. Robinson
P.S.: I’ll be speaking at The Money Show – San Francisco this Aug. 16th from 10:45 a.m. to 11:30 a.m. Pacific time. If you’re in the area, I suggest you stop by. I’ll be talking about How to Own Great Tech Stocks For Free. So don’t miss it! You can register by clicking here.