Investing: Learning from Past Mistakes in the AI Revolution
“Generals always prepare to fight the last war, especially if they won it.”
French Prime Minister Georges Clemenceau reportedly stated this during World War I. This sentiment about learning from past victories applies equally to investing; investors often look back at what previously succeeded and assume the same will persist.
The Dot-Com Bubble and Its Lessons
Consider the late 1990s dot-com bubble. Many investors invested heavily in any company with “.com” in its name, leading to disastrous outcomes when numerous businesses subsequently failed. In the early 2000s, investors poured money into well-established brick-and-mortar retailers like Sears and JCPenney, neglecting the rapid rise of e-commerce exemplified by Amazon.com Inc. (AMZN).
Now, as we enter the AI Revolution, which many regard as the most significant technological shift of our era, some investors are still clinging to legacy tech stocks like Intel Corp. (INTC). Once a titan of American industry, Intel’s stock has plummeted approximately 63% over the last five years, as illustrated in the chart below.
Intel’s Struggles Amidst AI Growth
This steep decline is particularly striking given that it occurred during a period where the AI Revolution was gaining momentum. While Intel struggled, competitors such as NVIDIA Corp. (NVDA) emerged as pioneers, fundamentally changing the semiconductor landscape and establishing themselves as leaders in the AI sector.
By focusing on graphic processing units (GPUs) that outperformed traditional central processing units (CPUs) for AI applications, NVIDIA capitalized on the demand for advanced chips. This shift ignited a rush for NVIDIA’s technology in what has become an AI arms race.
Indeed, few companies have benefited from this monumental transition as much as NVIDIA, which is noted for its monopolistic position in the market. My experience in this field leads me to declare NVIDIA the “Stock of the Decade” due to its unparalleled pace of innovation.
Looking Ahead: Quantum Computing
However, one might question how long NVIDIA’s dominance can continue. By the decade’s end, the transistors in NVIDIA’s chips may approach atomic levels, posing significant physical limitations to further enhancement in speed.
You might wonder: Is NVIDIA stuck fighting the “last war”? I don’t believe so. I foresee NVIDIA leveraging quantum computing to secure its position in the next phase of the AI Revolution.
Expect more discussions around quantum computing soon, especially with NVIDIA’s upcoming “Quantum Day” at their annual AI conference on March 20. This event promises to gather experts to explore the future of quantum computing over the coming decades.
I anticipate this will be a pivotal announcement, advantageous not only for NVIDIA but also for select “pure play” quantum computing firms collaborating with the company. The greatest opportunities for gains may lie in these smaller firms, which could potentially evolve into the next NVIDIA.
Mark your calendars for Thursday, March 13, at 1 p.m. Eastern. I will share essential insights about Q Day during a special summit, including my top pick— a small-cap Stock closely linked to NVIDIA, fortified by 102 patents.
Reserve your spot by clicking here.
Once you’ve saved your place, I encourage you to send your questions regarding quantum computing to [email protected]. Please include “Quantum computing questions” in the subject line so that I can review your inquiries efficiently.
In the meantime, I will provide insights into quantum computing, detailing NVIDIA’s involvement and explaining its mechanics. Understanding this technology is crucial, and I will also share two strategies for potentially profiting from it.
What Is Quantum Computing?
To grasp quantum computing better, imagine navigating a maze. Traditional computers approach a problem by selecting paths and restarting whenever they hit a dead end, repeating this trial-and-error process. If a computer could reason like a human, it could find a more efficient route by eliminating obvious pitfalls, as proposed by British mathematician Alan Turing when laying the foundations for artificial intelligence.
Now consider the potential of testing all paths of the maze simultaneously. This capability means arriving at solutions in a fraction of the time. That’s the promise of quantum computing.
In essence, quantum computing aims to tackle complex problems at a speed unattainable by traditional computers by leveraging the unique ability of quantum states to produce multiple solutions concurrently.
Quantum Computing: The Next Frontier for Investment and Innovation
Traditional computing relies on bits that are either 1 or 0, but quantum computers use qubits. Qubits can exist in both states simultaneously due to a property known as superposition.
It is important to note that many existing technologies already leverage quantum mechanics. Devices such as atomic clocks, MRI machines, lasers, and even LED light bulbs depend on these principles. We are not discussing purely theoretical applications.
What’s different now is that we are approaching a point where quantum states can be effectively utilized for computing tasks. Just as electricity underwent a transformative “transistor moment” in the 1950s—from powering bulky motors to enabling advanced semiconductor functions—quantum computing is now on the verge of a similar leap.
We’re witnessing tangible advancements in this domain.
Quantum Computing Enters the Mainstream
Historically, quantum computing was confined to government agencies and academic labs due to its hardware’s size, cost, and instability. However, recent advancements are changing this landscape.
Major technology companies like Alphabet Inc. (GOOG), Microsoft Corporation (MSFT), and Amazon.com, Inc. (AMZN) are creating bespoke quantum chips capable of performing computations in seconds—tasks that would ordinarily take traditional supercomputers thousands of years. (We will delve deeper into this topic in our upcoming “Q Week” essay tomorrow.)
Other developments in quantum computing are also promising, paving the way for broader market applications that previously existed only in researchers’ imaginations.
I will refrain from delving into more technical jargon. The key takeaway is that recent breakthroughs are making it increasingly feasible to integrate quantum computing into profit-driven corporate environments.
Governments, technology firms, and institutional investors are making substantial investments in quantum computing.
The implications of these advancements are immense:
- Biopharmaceutical companies could rapidly discover life-saving drugs.
- Automakers may successfully create functional autonomous vehicle systems.
- Chemical firms could develop revolutionary materials beyond our current understanding.
This is merely the beginning. Quantum computing will enable us to tackle challenges we have yet to identify.
This brings us to the investment prospects.
Seeking the Next NVIDIA
I anticipate that NVIDIA will soon pivot toward quantum computing.
In fact, I predict a significant turning point on Thursday, March 20.
On that day, NVIDIA will host its inaugural Quantum Day.
This is an important event.
I foresee that NVIDIA will innovate a way to integrate AI with quantum computing, possibly leading to a breakthrough that could influence industries valued at a collective $46 trillion.
This suggests that NVIDIA remains a strong “Buy” for long-term investors and represents my first Profit Idea.
For those seeking substantial gains, it’s essential to begin considering “pure play” quantum companies that are collaborating with NVIDIA and other tech giants. This is my second Profit Idea.
To explore this investment strategy further, I invite you to participate in my special Next 50X NVIDIA Call. This event takes place on Thursday, March 13, at 1 p.m. Eastern. (You can Click here to reserve your spot now.)
My objective for this briefing is to position you ahead of the crowd and news outlets.
By the time the mainstream media reports on this shift, it may be too late to capitalize.
Go here to reserve your spot NOW.
This is the initial segment of my “Q Week” series. In my next article, I will examine how other major technology companies are preparing for this emerging competitive landscape and the implications for investors. Be on the lookout for this crucial information in your inbox—you won’t want to miss it.
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)
