Editor’s Note: My InvestorPlace colleague Luke Lango has been covering the two waves of the AI Revolution – the AI Builders and the AI Appliers – for the past few years. And readers of his research benefited tremendously after he spotted the AI Applier wave before it actually arrived. For example, Luke recommended top AI Applier stocks like AxonEnterprise Inc. (AXON) and AppLovin Corp. (APP) — now both up 350%-plus — before the crowd caught on.
It’s why my other InvestorPlace colleague Eric Fry and I were so excited to team up with Luke recently to build a portfolio of the best of the AI Applier stocks. We recently took to the “airwaves” to tell folks about it. (You can catch up on our broadcast together here.)
I’ve invited Luke here today to give us the big picture on the AI Revolution and what it means for the companies building new businesses with AI. He’ll also explain how the Phase 2 of the AI Boom is creating a compelling opportunity in select “first wave” AI Builder stocks ahead of the new wave of AI. You can check it out below.
In 1990, Tim Berners Lee invented the World Wide Web, but the internet’s true “Day One” arrived five years later when Amazon.com Inc. (AMZN) made its first online sale, catapulting the disruptive technology into global consciousness.
Likewise, while the first BlackBerry Ltd. (BB) smartphone was released in 1999, that technology’s Day One came eight years later with Steve Jobs’s iconic iPhone announcement, ushering in a new era.
Now, as we approach 2025, another singular event is on the horizon that will ignite the most significant and rapid societal transformation in human history.
We’re calling it “AI Day One.“
I’ve long seen the AI Revolution playing out in two waves.
First, the buildout phase – or the AI Builder boom – wherein AI-focused companies spend billions upon billions of dollars to create new data centers, buy AI chips, build new fabs, and more.
In this stage, everyone is rushing to create the infrastructure necessary to develop new AI products, services, and applications. The AI Builder stocks – the companies building those data centers, making those chips, running those fabs, etc. – have been the big winners.
Second, you have the application phase – or the AI Applier boom– wherein companies spend billions upon billions of dollars to actually develop and deploy new AI applications on top of all this infrastructure. The AI Applier stocks – the companies making and using those new AI applications – will be the big winners.
It’s only a matter of time before a “killer app” stuns the world and sends these “new wave” AI Applier stocks soaring.
Later in this letter, I’ll dig into what that “killer app” might look like… and at how you can get in on it now.
But first, let’s try to understand the dynamics at play in the AI Revolution…
The Contrarian Approach to the AI Boom
The AI Builder boom unfolded during the first 18 months or so of the AI Revolution, following Chat-GPT’s debut in late 2022.
AI Builder stocks – like Nvidia Corp. (NVDA) and SuperMicro Computer Inc. (SMCI) – were the big winners. They significantly outperformed AI Applier stocks from late 2022 to summer 2024.
But a few months ago, we shifted into this revolution’s “second wave.” Since July 2024, top AI Builder stocks like Nvidia have struggled, while top AI Applier stocks like AxonEnterprise Inc. (AXON) and AppLovin Corp. (APP) have soared.
AI Appliers have taken the baton from AI Builders, if you will.
My paid-up members have benefited tremendously from this phase shift.
We saw the AI Applier boom coming. And we owned top AI Applier stocks like AXON and APP in our model portfolios long before they ever took off.
In fact, in one of my research services, we recently recommended booking partial gains on our AXON recommendation of over 350%. APP stock is also up more than 350% since we recommended it.
But that doesn’t mean we have forgotten about AI Builder stocks.
In fact, we think AI Builders are due for a big comeback.
The slowdown in AI Builder stocks over the past few months has been driven by a concern that spending on new AI infrastructure is slowing down.
Um… no.
Just this week…
The world’s largest tech investor – MasayoshiSon of SoftBank Group Corp. (SFTBY) – pledged to invest $100 billion into the U.S. over the next four years. The bulk of that $100 billion will likely go toward creating new AI infrastructure.
Amazon said it’s investing another $10 billion to expand its data center infrastructure in Ohio.
And Meta Platforms Inc. (META) announced it’s building a $10 billion AI data center – the largest it’s ever built – in Louisiana. (And pretty much right next door, in Tennessee, Elon Musk and his xAIstartup are building their own multibillion-dollar AI-focused supercomputer project.)
The AI infrastructure boom in the United States is not slowing down. It is picking up speed, if anything, and that means there exists a compelling opportunity right now to buy beaten-down AI Builder stocks. They are primed to rebound strongly as the market realizes the AI Builder boom remains alive and well.
We just ran a screener to look for top-notch AI stocks that have struggled recently…
And names like Micron Technology Inc. (MU) came up. Micron is up almost 30% in 2024 but has fallen 30% over the past six months.
Qualcomm Inc. (QCOM) was a hit, too, because it is down about 30% over the past six months.
Same with Arm Holdings plc (ARM). It is up almost 90% this year, but down about 20% over the past six months.
Nvidia and TexasInstruments Inc. (TXN) also are on my radar.
Smart investors should consider those stocks for an AI Builder rebound in the first half of 2025.
However, smart investors won’t stop there.
After all, the AI Applier boom is just getting started…
The “New Wave” of AI Is Here
We have less than 1,000 days before we witness a seismic shift in the global economy that will make the internet boom look like child’s play…
We have dubbed it “AI Day One.”
This isn’t just another tech trend. It’s a fundamental reshaping of our world that will create unprecedented wealth for those who see it coming – and leave everyone else in the dust.
Imagine being able to predict which companies will dominate the AI landscape before Wall Street catches on. Now you can.
That’s because my InvestorPlace colleagues and I have identified a select group of “new wave” AI Applier stocks poised for explosive growth in the coming months. These aren’t your typical tech giants – they’re the hidden gems of our AI-powered future.
And we recently sat down for a special free broadcast in order to explain what “AI Day One” is… and to tell you how and why we picked this group of “new wave” AI Applier stocks for our newest portfolio.
Don’t be left behind in the greatest wealth transfer of our lifetime.
