Hello, Reader.
Big Tech names, like Amazon.com Inc. (AMZN), are the stable but unremarkable giants of the technology industry.
Companies like Amazon seem like Hall-of-Fame baseball players in the twilights of their careers; no one can deny their heroic achievements from the past, but almost no one is expecting similar achievements in the future.
However, AI is flipping that naive assumption on its head. AI is building an entirely new foundation for explosive growth of such incalculable proportions that it could add trillions of dollars to the trillion-dollar market value Amazon already possesses…
And perfectly positioning the tech giant to come out as a winner in the current the AI Wars.
For one thing, it’s been quietly investing billions of dollars in AI during the last several years…
Alexa, What Time Is It?
AI is already intimately intertwined with Amazon’s DNA.
In a Netflix special, the comedian Ronny Chieng joked about the need to upgrade Amazon’s “Prime Now” to “Prime Before.” He said…
Send me what I want before I want it… Use artificial intelligence to substitute my own intelligence so I can live my life. Send me everything I want, before I want it… in as many boxes as possible.
Chieng’s “Prime Before” gag got a lot of laughs. But today, it is eerily close to becoming reality. As a recent story in the Observer remarked…
With 25 years of data at its disposal, Amazon knows what we want, when we want it, and it’s likely already sent the next thing you’re going to order to a fulfillment center near you.
Amazon’s “Alexa” home assistant is another example of the company’s AI capabilities. But Amazon’s AWS web services division may be its single greatest AI asset.
AWS offers the industry’s most comprehensive set of AI and machine-learning services, infrastructure, and implementation resources.
More than 100,000 customers use AWS for their AI/ML workloads. And since AWS is the world’s largest cloud service provider, it is not hard to imagine that the nascent AI boom will produce an echo boom of profit growth at AWS. Already, Amazon’s “Intelligent Cloud” division is the company’s largest source of revenue and profit.
Machine-learning processes require incredibly large and fast processing power… and deep pockets. Big tech has both… as well as vast repositories of proprietary data that many AI applications require.
In effect, the Big Tech companies are AI. They have the money and the muscle to create valuable AI solutions and then apply those solutions to spectacular commercial effect – i.e., make boatloads of money.
Importantly, the AI money that will be flowing into the coffers of companies, like Amazon and Alphabet Inc. (GOOGL) will almost certainly be high-margin money. At least that’s my expectation.
That means rising profit margins and probably a decade of double-digit profit growth at these Big Tech companies.
But many investors may be doubting, or overlooking, that possibility. For them, these Big Tech companies are simply old dogs that are trying a new trick.
That perspective reminds me of a “Far Side” cartoon I saw a while back. It pictured a dog named “Rex” doing a tightrope act. Rex was riding a unicycle, twirling a hula-hoop around his waist, and juggling balls, while also balancing a vase on his head and carrying a cat in his mouth. The caption read…
High above the hushed crowd, Rex tried to remain focused. Still, he couldn’t shake one nagging thought: He was an old dog, and this was a new trick.
Tech giants like Amazon, Alphabet, and even Microsoft Corp. (MSFT) may be old dogs, but they’ve spent several years learning the new AI tricks that will produce their future growth.
How to Invest in the Right AI Companies
These AI tricks will also heavily arm the Big Tech companies as they battle it out in the current AI Wars.
This war focuses on developing advanced AI capabilities to achieve technological superiority, and I believe those who harness its power will lead the world for the foreseeable future.
I also believe the AI Wars of 2024 are about to intensify…
And as a result, we will see some AI stocks soar in 2024 – while others crash and burn.
So, now is the time to prepare. There will be winners and losers in the 2024 AI Wars; but if you follow my battle blueprint, you won’t only have the chance to be a winner…
But have the opportunity to double your money at least 10 different times in the coming months.
To learn how to prepare yourself for the AI Wars, click here for more details.
Regards,
Eric
