Editor’s Note: Luke Lango, a colleague at InvestorPlace, has provided critical insights on the AI Boom over the past few years. His readers have benefitted immensely by getting ahead of the trends, such as his early recommendations of AI Applier stocks like Axon Enterprise Inc. (AXON) and AppLovin Corp. (APP), both of which have surged more than 350%.

This success prompted my collaboration with Luke and my fellow InvestorPlace analyst Louis Navellier to create a portfolio featuring the best AI Applier stocks. We discussed this exciting venture on a recent broadcast. (You can listen to our discussion here.)

As the AI Boom intensifies, it’s essential to recognize that while AI won’t take control, businesses leveraging AI will. Today, Luke joins us to explore the overarching themes of the AI Boom and highlight the opportunities within AI Builder stocks as we move into this new phase.

Let’s dive in…

Historically, in 1990, Tim Berners-Lee created the World Wide Web, yet its watershed moment came in 1995 when Amazon.com Inc. (AMZN) completed its first online sale, cementing the internet’s significance. Similarly, although the first Blackberry Ltd. (BB) smartphone launched in 1999, the real breakthrough occurred in 2007 when Steve Jobs unveiled the iPhone, heralding the smartphone era. Now, as we approach 2025, an influential change is set to reshape society dramatically. We refer to this transformative moment as “AI Day One.“

Our research identifies two distinct waves of the AI Boom.

Initially, the focus was on the buildout phase, or the AI Builder Boom, where companies invested billions to construct data centers, acquire AI chips, and establish new facilities. This phase involved intense efforts to create the necessary components for developing innovative AI products and services. During this time, AI Builder stocks—like Nvidia Corp. (NVDA) and Super Micro Computer Inc. (SMCI)—emerged as major players in the market.

The second phase is the application stage, or the AI Applier Boom, where companies begin deploying new AI applications using this robust infrastructure. Stocks like Axon and AppLovin have reaped the rewards in this phase.

The transition between these two phases highlights the anticipation of a “killer app” that may soon propel new wave AI stocks to remarkable heights. However, let’s first examine the factors driving the dynamics of the AI Boom…

Taking a Unique Perspective on the AI Boom

During the first 18 months of the AI Boom, we saw what we call “phase one,” with AI Builder stocks like Nvidia Corp. (NVDA) and Super Micro Computer Inc. (SMCI) leading the charge, significantly outperforming their AI Applier counterparts from late 2022 to summer 2024.

Recently, we entered “phase two,” or the AI Applier Boom. Since July 2024, we’ve witnessed a decline in top AI Builder stocks like Nvidia, while AI Applier stocks such as Axon (AXON) and AppLovin (APP) have experienced impressive growth.

This pattern mirrors the shift within the AI market, as stocks like Nvidia initially thrived, only to be succeeded by the ascent of AI Applier stocks such as Axon and AppLovin.

In essence, AI Appliers have taken over from AI Builders.

Our readers have greatly benefitted from recognizing this transition, having identified the AI Applier Boom early. We considered stocks like AXON and APP for our model portfolio before their significant gains.

In fact, we recently realized profits on our AXON position, which is up over 350%, and APP stock has similarly increased by more than 350% since our recommendations.

Clearly, we’re pleased with the recent shift towards the AI Applier Boom.

Nevertheless, AI Builder stocks remain in our sights.

We believe these stocks are poised for a substantial rebound.

Recent declines in AI Builder stocks raised concerns about a slowdown in AI infrastructure spending, but we find these concerns exaggerated.

For instance, just this week, Masayoshi Son of SoftBank Group Corp. (SFTBY) pledged to invest $100 billion in the U.S. over the next four years, primarily focusing on new AI infrastructure.

Similarly, Amazon announced an additional $10 billion investment to expand its data center operations in Ohio.

AI Infrastructure Boom: Meta and Musk Lead the Charge

Meta Constructs Historic AI Datacenter

Just recently, Meta Platforms Inc. (META) made headlines with their announcement of a groundbreaking $10 billion AI datacenter in Louisiana. This facility marks their largest investment in AI infrastructure to date.

Musk’s xAI Project Sparks Competition

In Tennessee, Elon Musk and his xAI startup are also on a mission, developing a multi-billion-dollar supercomputer project. This competition signifies a larger trend in the current AI landscape.

AI Builders Show Promise Despite Recent Struggles

The AI infrastructure sector in the United States continues to gain momentum. Recent analysis shows a significant opportunity to invest in AI Builder stocks that have faced challenges recently. These stocks are likely to experience a rebound as market sentiment improves.

For instance, Micron Technology Inc. (MU), despite a 30% dip over the past six months, has increased nearly 30% in 2024. Qualcomm Inc. (QCOM) also reflects this trend, up 9% this year yet down about 30% in the last six months.

Arm Holdings plc (ARM) experienced an impressive 90% growth this year but has dipped roughly 20% recently. Notable players like Nvidia and Texas Instruments Inc. (TXN) share similar patterns and indicate potential for growth.

These stocks could be pivotal for an AI Builder rebound anticipated in the first half of 2025.

The Onset of AI’s Transformational Era

Alongside the revival of AI Builder stocks, the growth of AI Applier stocks continues. Experts suggest we are less than 1,000 days away from a transformative shift in the global economy that may eclipse the internet boom.

This transformation has been labeled “AI Day One.” It represents not just a technological trend, but a profound change that could lead to remarkable wealth creation for those who prepare for it.

Being able to identify which companies will excel in the AI landscape before they gain mainstream attention could present a significant advantage.

We have pinpointed a select group of “new wave” AI stocks, which are not your conventional tech giants, but rather the promising contenders for success in our AI-driven future.

Take Action Before It’s Too Late

Don’t miss the chance to participate in what may be the most significant wealth transfer of our time. Learn about the AI stocks that could pave your way to prosperity in 2025 and beyond.

Sincerely,

Luke Lango