“A billion dollars isn’t what it used to be.”
I always get a kick out of that quote. Bunker Hunt said it after he lost most of his fortune in a silver trade gone bad.
Mr. Hunt was ahead of his time. Today, when the largest tech firms’ market capitalizations measure in the trillions, a billion dollars really isn’t what it used to be.
I thought of this when I saw a recent prediction by Cathie Wood, the manager of the ARK Innovation ETF (NYSE: ARKK), among other funds. Wood believes that one new technology will create $80 trillion in market value over the next 10 years.
Just for grins, let’s consider what $80 trillion could buy you:
- All goods and services produced in the United States … for four years! (U.S. GDP is approximately $20 trillion per year).
- Fifty companies the size of Amazon.
- Twenty-nine companies the size of Apple.
- Fourteen thousand football teams valued at the price of the Dallas Cowboys. (As if Jerry Jones would ever sell!)
We’re talking about an almost unfathomable amount of value being created.
Now, these are just Wood’s estimates. But they don’t sound out of line to me. Not by a stretch.
Even if the value created ended up being half of Wood’s prediction ($40 trillion)… even just 10% ($8 trillion) … it would still be one of the biggest money-making opportunities of our lifetimes.
So, what’s this $80 trillion opportunity?
We’re talking about artificial intelligence (AI).
Artificial Intelligence Isn’t Science Fiction Anymore
AI has been the domain of science fiction for years. It often involves computers turning on their human masters like in Terminator!
But the reality is that AI has already been around for a long time.
Artificial intelligence is the ability of a machine to “think” and perform tasks associated with humans such as reasoning, generalizing, making associations and learning from past experiences.
If you use Apple’s Siri or Amazon’s Alexa, you’re using a real-world application of AI. From “talking” with you, these assistants recognize your voice and learn to understand what you want.
Buy anything on Amazon lately? Amazon’s algorithms observe your past purchases and recommend additional purchases based on your history and perceived need. We’ve all had a knowledgeable salesman steer us away from a bad purchase and toward something that would serve our intent better. Amazon’s AI does the same thing now.
It Can Solve a Multitude of Problems
Let’s look at the ongoing labor shortage. This, along with the gummed-up supply chain, is something we’ve covered at length in Green Zone Fortunes and Money & Markets. Well, AI provides a real path out of this mess.
Here’s a few practical examples of artificial intelligence in the labor force and otherwise:
- Advanced Farm Technologies has a strawberry-picking robot that can sense when the fruit is ripe. It will then, with laser precision, pick it without bruising it. It’s not a big jump to go from this to fully-automated farming. It would cut down on the need for human labor.
- The iRobot Roomba vacuum cleaner is a robotic AI that learns how to clean your house more effectively. It will scan a room, move around obstacles and optimize the amount of work it does based on the size of the room. It won’t fold your laundry or scrub your toilet, but it knocks one time-consuming task off your chore list.
- And of course, there’s the real promise of autonomous driving by Tesla and other automakers…
- The chat bots that help you resolve basic customer service issues…
- The automated assistants you now see at most airline check-in stations…
This is real. It’s happening now. And we’re only at the tip of the iceberg.
How to Follow the AI Mega Trend
The amount of investment capital flowing into AI will dwarf the 1990s internet gold rush and the social media boom of the 2010s.
You can follow the broader AI trend using an exchange-traded fund (ETF) like ARKK (which holds some top AI stocks) or the more specific ROBO Global Robotics & Automation Index ETF (NYSE: ROBO). Both of these funds are struggling amid the tech sell-off right now.
If you are looking for a single company to invest in the future of AI, you need to check out this month’s issue of my premium stock research newsletter Green Zone Fortunes.
I recommend one of the leaders in AI technology. It’s a company with the size and clout to dominate this space, and it’s already wildly profitable. It also rates in the top 10% on my Green Zone Ratings system.
If you want to be one of the first to find out about my newest high-conviction stock recommendation, click here to see more about Green Zone Fortunes. The January issue will land in subscribers’ inboxes soon, so you can get in early. Based on my research I predict this stock will take off in 2022.
Follow this link to find out more about Green Zone Fortunes and my No. 1 stock mega trend for the next decade: genomics (DNA science). AI, like genomics, is shaping up to be another mega trend you can’t miss out on!
To good profits,
Adam O’Dell
Chief Investment Strategist