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The Case Against AI Skepticism: Why We Should Pay Attention
It’s refreshing when experts misjudge the future.
While everyone can be wrong occasionally, it’s often the grand predictions that lead to notable mistakes that capture my attention.
Such misjudgments can be particularly satisfying to watch unfold.
If you’re not familiar with the term “schadenfreude,” it’s a German word denoting the joy one feels from another’s misfortunes.
Consider this notable example:
The notion of everyone carrying a wireless personal communicator was labeled as “a pipe dream driven by greed.” This quote is attributed to Intel CEO Andy Grove during the 1992 Mobile Conference. Fast forward, and it’s evident he was mistaken.
According to the Pew Research Center, an impressive 97% of Americans own a cellphone today, and 90% of those are smartphones, a significant increase from just 35% when Pew first surveyed smartphone ownership in 2011.
Globally, the International Telecommunication Union reports over 8.5 billion mobile subscriptions now exist.
That’s a clear sign of a vision disregarded.
Here’s another example:
“The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law’ becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
This statement came from Nobel-winning economist Paul Krugman in 1998, who later acknowledged how wrong he was.
Numerous instances exist where “experts” missed the mark, and currently, many are predicting an impending “AI Bubble.”
Ignore the Skeptics About Artificial Intelligence
It’s become popular to debate the concept of an “AI Bubble.” Headlines in reputable sources push this narrative:
The Los Angeles Times:
And similarly in Reuters:
While it’s true that some valuations of AI stocks have skyrocketed, that doesn’t indicate the AI movement is a bubble nor that a collapse is imminent.
In fact, we are still at the beginning of this transformation.
So far, only a few companies have capitalized on the AI trend, mainly those providing industry infrastructure.
Leading the pack are chip manufacturers like Nvidia (NVDA) and Advanced Micro Devices (AMD).
However, as per insights from prominent investor Louis Navellier, the next phase of AI promise will be broader and potentially more profitable.
Skepticism about AI forecasts is understandable; we’ve all been bombarded with expert predictions before.
But why should we heed Louis’ advice?
His approach to identifying promising stocks is rooted in a systematic, data-driven methodology rather than instinct or hearsay.
Using a rigorous quantitative grading system, Louis has consistently outperformed market averages over decades by selecting fundamentally strong companies.
Similar to school grades, he assesses stocks using a scale from A to F, honing in on small-cap firms that not only make claims but also back them up with strong earnings.
This method’s effectiveness is proven; Louis has recommended 18 stocks that have returned 10,000% or more and 675 that have more than doubled in value.
Recognized by Forbes as the “King of Quants,” and hailed as “an icon among growth stock investors” by The New York Times, Louis has a track record that speaks volumes.
MarketWatch highlights him as the first analyst to recommend Google, a choice that saw returns exceeding 2,000%.
When Louis asserts that specific stocks are set to benefit from AI, it’s worthwhile to pay attention. These companies are not merely discussing AI—they are actively leveraging it to drive sales and grow profits.
Louis communicated this insight through his Breakthrough Stocks newsletter…
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Unlocking the Future: How Generative AI Will Transform the Workforce
Subscribers have been alerted about what is being termed the “Real AI Boom.”
The winners of the Real AI Boom will harness generative AI to build profitable companies and redefine existing jobs. This could trigger a transformational shift happening once every 25 years, reminiscent of the late ’90s.
Before long, a college student who says “I want to go to medical school” may be met with laughter.
This is because many traditional jobs from the 20th century will likely be downsized or vanish entirely, potentially dismantling whole industries.
According to a McKinsey study, up to 800 million workers globally might face job loss by 2030, and as Wired magazine reports, 70% of current occupations may experience pay cuts.
As a result, many defining American jobs will gradually disappear. This could create the largest income disparity ever, with wealth shifting to a new segment of society.
The market for AI is anticipated to expand significantly, growing 20-fold to a staggering $15.7 trillion by 2023—a figure almost equivalent to China’s entire economy.
This growth is driven by next-gen AI companies.
In essence, these are enterprises that leverage AI to reinvent or automate long-standing business models.
Louis is focused on identifying these transformative companies through his Breakthrough Stocks service.
Identifying Future AI Leaders
Louis has a proven history of recommending successful stocks. For instance, he suggested Micron Technology before it surged 2,050%, Lam Research which rose 4,350%, and Intel increasing by 3,228%.
Moreover, his early recommendations for Amazon yielded an 8,151% increase and Netflix an impressive 7,749%.
To achieve such gains, capturing stocks at their early stages is crucial. Louis identified these stocks before they gained widespread recognition or were prominently featured on financial news channels.
Presently, Louis is particularly optimistic about the potential of small-cap stocks, which are less well-known but could emerge as future industry leaders.
What makes this a prime time for small caps? Interest rate reductions.
Louis elaborates on the significant impact of rate cuts for smaller companies.
Smaller-cap stocks often benefit the most from declining interest rates, as these companies frequently carry higher debt levels than larger firms. Lower rates provide them with considerable relief.
The bottom line: The Federal Reserve’s recent interest rate cuts and future forecasts are advantageous for the stock market, especially for smaller-cap stocks. With uncertainty fading ahead of the Fed’s policy decisions, I anticipate stocks will continue to rise in the weeks to come.
Given this favorable environment for small caps, how can investors discern which stocks are best positioned for growth?
Louis shares his strategic approach to uncovering winning stocks.
I exclusively recommend stocks that demonstrate strong financial health, steering clear of companies experiencing declines in sales or earnings. Each small- to mid-cap stock I endorse must achieve an A rating, with at least 25% sales growth and a minimum of 50% earnings growth.
As small-cap companies effectively integrate AI, they are likely to continue growing, transitioning through Louis’ grading system from C to B and finally to A—signifying their eligibility for his Breakthrough Stocks service.
Recently, Louis hosted an event discussing the Real AI Boom and outlining which stocks his analytics suggest could become significant long-term successes.
For insights from Louis’ discussion on the Real AI Boom, click here.
While AI can be intimidating, and concerns about an AI bubble loom, the message is clear: Investing in AI is essential.
Wishing you a relaxing weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
