Welcome to the latest episode of the Digitization-X (DX) podcast, where host Alex Kagin gives you a front row seat to the newest and most exciting companies and themes in tech investing.
Two industry giants wanted to hog the headlines this week as Amazon shelled out $1.2 billion for autonomous vehicle startup Zook, and Microsoft announced immediate closures of all its consumer stores.
I want to return to a conversation we had almost a year ago to the day.
See, back on May 24, 2019, I warned you to stay clear of Wall Street’s hype machine regarding a major tech merger.
At the time, I suggested you stay clear of investing in Hewlett Packard Enterprise Co. (HPE) even though it was joining forces with a storied supercomputing firm, Cray Inc.
Don’t get me wrong. I thought the buyout made a lot of sense for HPE since Cray is a computing legend with a long history of historic breakthroughs.
But I didn’t see a lot of upside ahead for the stock even though Cray had just nailed a $500 million U.S. government contract.
So, I’m happy to report that the “hidden” play on the merger that I suggested instead has become one of the top performers in the Covid-19 panic.
A recent advance that largely flew under Wall Street’s radar says a lot about why artificial intelligence (AI) is set to have a $15.7 trillion impact on the global economy.
Known as “neuromorphic computing,” the cutting-edge method gets closer to simulating the way human brains work.
The system could redefine high-performance computing because it operates at lightning speeds and barely sips energy.
Right now, fast and robust graphics processors are the main power behind AI.
That’s set to change because the new chips work especially well for AI-powered neural networks used in speech and pattern recognition, and computer vision.
In fact, Gartner says neuromorphic chips upon which the platform is based, are set to have a huge impact. They could become the predominant computing for AI by 2025.
When we spoke last Tuesday, I gave you what I consider to be a never-sell tech investment.
Indeed, Fidelity Nasdaq Composite Index Tracking Stock (ONEQ) is a vehicle you can reliably count on to build wealth over the long haul.
After all, this exchange-traded fund (ETF) gives you access to what I conservatively forecast is $39 trillion in wealth, covering everything from artificial intelligence to the Internet of Things.
That’s the power of owning nearly 1,900 stocks all in one well-managed basket.
But I know from several recent talks with investors that you are looking for solid tactical tools for managing your way through the choppy markets.
I can see why. In just the last four months, the S&P 500 has had two big rallies and two sharp declines.
My daughter Jordan and her boyfriend just returned from a weekend on the California coast.
They stopped at one of our favorite locations, the Santa Cruz beach boardwalk. We’ve gone there many times to take in the beautiful scenery, sample “cuisine” (like deep-fried Twinkies), and enjoy the rides.
And that means hitting the roller coaster.
I bring that up today because many investors feel that’s exactly where the market is taking them right now.
For many, looking at a chart of the S&P 500 of late gives them a very topsy-turvy feeling – to say the least.
This explains why I get the same question a lot these days. It goes like this: if there was one tech stock you’d never sell, what would it be?
For me, the answer is easy.
The one I have in mind is a great long-term play as well as a terrific place to park your cash – should you get stopped out of one of your favorite stocks amidst the volatility.
These days just about every sane American is in love with Wall Street.
In fact, I haven’t seen the Street get so much positive publicity in many years.
And it’s easy to see why. All three major indexes posted massive gains for the first half of the year, tying decades-old records on the strength of June’s rally.
Consider that the S&P 500 had its best June since 1955 as the Dow logged its best performance since 1938. The tech-centric Nasdaq had its best June since 2000.
So, you might be tempted to think all you had to do was throw a dart at the stock tables to find a winner.
Truth be told, you can do far better – if you have a savvy tech expert carefully hand selecting stocks for you.
Just ask the readers of my Nova-X Report. They had four stocks that gained 100% each through the end of June.
Today, I’m going to show you how we did it, and how you can get in on the sizzling action here…
Tension in the Middle East and the South China Sea… a political mess at home… sky-high stock prices.
And here’s something else to worry about…
On Nov. 1, a Wall Street Journal headline warned about the “Consumer Confidence Conundrum.”
Here’s the worry: According to WSJ writer Chris Dieterich and the folks he talked, because consumer confidence is at its highest level since December 2000, it’s time to “add this to the list of reasons investors ought to be getting nervous.”
The reason: It may signal the bull market is coming to an end.
The treatment that makes up 90% of the pharmaceutical market – good, old-fashioned small molecules created in the laboratory – isn’t going anywhere.
Yes, incredibly innovative treatments like T-cell therapy, microbiome therapies, and CRISPR gene editing are all having a huge impact on healthcare.
But we use small, synthetic molecules to create everything from aspirin and corticosteroids to sofosbuvir (Sovaldi) and ivacaftor (Kalydeco) – and we’ll keep doing so for a long time to come.
The small molecule technique dates back to the 1890s, but that doesn’t mean innovation cannot happen within that field. Scientists are hard at work in the labs, creating cutting-edge drugs, often tailored to treat a very specific disease or subset of patients.
Meanwhile, I’ve turned up a small British company that’s using its artificial intelligence platform to discover promising small molecule treatments faster – and cheaper – than ever before.
I call it biointelligence.
It’s a perfect illustration of the “Convergence Economy” we talk so much about here. By combining two or more fields of tech – in this case biotech and AI – it’s like a formula in which 1 + 1 = 3… and often a lot more that.
Today, we’re going to learn all about this tiny company and its brand-new biointelligence technology.
This company is privately held – so if you ask, Wall Street will say you can’t invest in it.
But I’ve a way you can.
In fact, I’ve found two ways.
Both of them will lead you to outsized returns – and hefty dividends.
Donald Trump promises to create 25 million new jobs over the next decade with his economic plan.
And as we’ve been discussing over the past few weeks, I think that plan is a good one – and will be very good for tech companies and their investors.
However, there’s also this…
Robotics and artificial intelligence – “automation,” in a word – will eliminate tens of millions of jobs over that same stretch.
It makes many of us planning our retirement – trying to put together enough money and investments to guarantee that our “golden years” are prosperous – wonder how we’ll do it. Moreover, it makes us worry about our children’s and grandchildren’s futures.
How can anyone save or invest if they’re looking at a “jobless future”?
One way to do it – to not just survive but to thrive in this unknowable future – is to profit from the very automation technologies that are threatening humanity’s livelihood.
And to do that, you have to “pick” the best stocks in this sector.
I’ve just spotted such a company – one whose technology could to displace millions of “back office” workers in the coming years. You know, the folks doing data entry and handling the customer service lines.
Its technology is known as robotic process automation (RPA).
We’ve been talking a lot about artificial intelligence (AI) over the past few weeks.
About how the big brains at Google’s DeepMind AI system say they may have developed a memory system they’re calling a “differentiable neural computer” (DNC) and possibly unlocked the path to truly intelligent deep learning.
About how many of FacebookMessenger’s 1 billion users are using AI-enhanced “chatbots” for their customer-service needs – chatbots that may soon be handling bill paying, shopping, delivery, and a range of other tasks.
It makes many of us planning our retirement – trying to put together enough money and investments to guarantee that our “golden years” are prosperous – wonder how we’ll do it. Moreover, it makes us worry about our children’s and grandchildren’s futures.