Today’s issue in preview:

• How to get paid again and again by owning the world’s best businesses

• How to trade AI stocks from here

• This bull market in energy is generating huge winners. Here are four good ways to invest.

• Learn our Top Themes to buy now

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How to trade AI stocks from here

Credit: KanawatTH

The giant AI infrastructure boom has its believers and its doubters. And they can disagree on many things.

But they can all agree that no matter if this trend is going to move higher or lower from here, it’s going to do so quickly… and with plenty of volatility.

Case in point: After ripping higher in September, most of this megatrend’s key stocks and ETFs have suffered steep declines over the past week. This rapid series of up-and-down moves has left the larger trend back to trading in a directionless, sideways market… or “becalmed,” like a sailboat on a windless sea.

In other words, the “world’s most important trend” is back in a holding pattern. Here’s what it means for your portfolio…

Over the past three months, we’ve published a special series of research notes analyzing the AI infrastructure trend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, large tech firms such as Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $3 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech insiders who know the true state of bleeding-edge AI development and have real-time stats on AI investment ROI, such as Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon), perhaps maybe… just might… know far more about AI and their businesses than outsiders know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact. However, the Agent Supernova is coming.

Regular readers know I care a lot more about what the market thinks of any stock, trend or theme than what any one person thinks of it, including me. You can be bullish or bearish on a trend all you like, but if that trend is moving strongly against you, then your idea isn’t worth much in my book.

One of the best ways to gauge what the market thinks of AI infrastructure is analyzing the VanEck Semiconductor ETF (SMH).

This fund is full of key semiconductor firms whose fortunes rise and fall with AI infrastructure spending trends. Major holdings include Nvidia (NVDA), Taiwan Semiconductor (TSM), AMD (AMD), Texas Instruments (TXN), ASML Holdings (ASML) and Micron (MU).

As you can see in the two-year chart below, SMH enjoyed a gigantic run from June 2025 to June 2026. The fund gained 176%. Since June 2026, however, the fund has corrected and moved in a volatile, sideways pattern. The fund attempted a breakout in late Sept/early Oct, but huge selling pressure over the past week has sent it back into its sideways base. Back to a trendless state.

I’ll keep you updated on the world’s most important trend. It won’t be long before we get meaningful price action that provides more direction for trading the semis and AI as a megatrend.

How to get paid again and again by owning the world’s best businesses

Credit: Liudmila Chernetska

This week, the stock market sent us a subtle but important message…

It says that if you don’t want to deal with the complexity and volatility of investing in rapidly evolving technologies like AI, consider focusing on the simplicity of just getting paid.

Focus on the strategy employed by investment funds like the Invesco Dividend Achievers ETF (PFM).

PFM is a unique fund that invests exclusively in high-quality dividend-paying stocks. A dividend is a payment a company makes to its shareholders, typically distributed from its profits. Dividends are typically paid by companies on the larger, more stable side of the stock market spectrum.

In the world of dividend payers, there is an elite class of firms that have raised their dividends for 10 consecutive years. These elite, high-quality firms are called Dividend Achievers. Only the strongest, most durable companies can qualify for membership in this club.

Some legendarily great businesses that are members of the exclusive Dividend Achievers club include Johnson & Johnson (JNJ), PepsiCo (PEP), 3M (MMM), Wal-Mart (WMT), Visa (V), Procter & Gamble (PG), Coca-Cola (KO), Chevron (CVX), and ExxonMobil (XOM).

Some of these firms have increased their dividends not for “just” 10 years in a row, but 30, 40, and even 50+ years in a row (and are called “Dividend Aristocrats”).

These businesses have paid and increased their dividends through recessions, bear markets, and a global pandemic. In terms of consistency, these firms rank just behind the rising sun. PFM is a fund designed specifically to own such firms.

Over the past week, many high-profile technology stocks, such as Lumentum (LITE), Dell Technologies (DELL), and Applied Materials (AMAT), have suffered large short-term sell-offs. Each firm is down more than 15% over the past five trading sessions.

Meanwhile, PFM has climbed by 2% over the same period. It’s something of a “port in the storm.” As you can see in the one-year chart below, the fund is enjoying a strong uptrend and is near its all-time high.

We are wildly bullish on the power of technology to create greater prosperity, longer lifespans, and large investment returns. However, we understand that “going big” into technology investments isn’t for everyone. And of course, it’s smart to have a diversified portfolio.

If you’re of the same mind, it’s good to know that investing in stable compounders and insisting on “getting paid” is still working well.

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This bull market in energy is generating huge winners. Here are four good ways to invest.

Credit: Stock87

This morning, the stock prices of Canadian oil giants Suncor Energy (SU) and Canadian Natural Resources (CNQ) reached new all-time highs. Shares of Norwegian oil and gas giant Equinor (EQNR) did the same.

This price action tells us that it’s still a bull market in “non-Middle Eastern” oil supplies… and that our September 2025 recommendation to get long oil stocks was very well timed.

Last September, I made the case for going long the emerging uptrend in oil and gas stocks: As the global economy grows, oil demand will remain solid. However, importantly, U.S. shale oil production growth appears to be peaking.

Flatlining supply from this region would remove a critical and reliable source of production growth that has been in place for more than a decade. Plus, oil was very cheap relative to gold and other assets, indicating good value.

With all that in mind, we’ve written frequently and bullishly about owning Suncor, ExxonMobil (XOM), the diversified State Street Energy Select Sector SPDR Fund (XLE), and oilfield service stocks like those in the SPDR S&P Oil & Gas Equipment & Services ETF (XES). The oil sector has been one of the true market leaders over the past year. Both XOM and XLE recently reached new all-time highs.

When I recommended oil and started trading it from the long side, I did not factor in the potential bullish driver of the Iran War. That’s been a “bonus” driver of gains in oil stocks. Sometimes, the dice rolls in your favor.

Although positive news related to the Iran War could emerge at any time and trigger a short-term correction in oil and oil stocks, the long-term picture remains bullish. I see three reasons why this is the case.

One: Critical oil infrastructure in the Middle East has been damaged. Oil flows will not return to pre-war levels for possibly over a year. This supports oil prices north of $80 per barrel, which in turn supports strong cash flows for oil and gas firms.

Two: Most countries maintain substantial above-ground “buffer” supplies of oil and refined petroleum products in the event of market disruptions such as the Iran War. Over the past six months, much of these buffer supplies have been depleted to compensate for the loss of Middle Eastern flows. They must be replenished.

The coming restocking of buffer supplies will support oil prices north of $80 per barrel… which, again, supports large cash flows for oil and gas firms.

Three: Although oil stocks have enjoyed a large run since our September call, they aren’t up much over the past ten years. Adjusted for dollar debasement over the past decade, key oil and gas ETFs are down significantly. This is not an aging bull market that has attracted too many fans and too much capital. It is the opposite of that.

I’ve been especially bullish on companies with all or most of their assets in safe, reliable “not Middle Eastern” asset bases such as Canada, Brazil, and Norway (where Equinor is a major player).

As I’ve covered over the past five months, for many countries and businesses, the Iran War is a powerful reminder: If your survival or smooth operation depends on uninterrupted resource flows from the Middle East, you are in a dangerous, vulnerable position.

No politician, CEO, or major shareholder wants their business to be in that position. No citizen wants their country to be in that position. Many powerful and influential people are realizing this is a big risk that must be mitigated if humanly possible. Executives and politicians will get fired for not addressing it effectively.

This means building and buying as many forms of “not Middle Eastern” and “non-Russian” resource supply chains as possible economically… like those from safe, resource-rich Canada, Norway, and Brazil. With today’s new highs for Suncor, Canadian Natural Resources, and Equinor in mind, I repeat my big picture takeaway: It’s a bull market in safe, reliable oil supplies… so stay long Canada and Norway.

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Market Notes

• Our recommendation to own healthcare stocks continues to pay off. The Health Care Select Sector Fund (XLV) reached a new one-year high today.

• Software leaders Atlassian (TEAM), Veeva Systems (VEEV), DocuSign (DOCU), Freshworks (FRSH) and Paylocity (PCTY) hit new one-year highs today.

• Our January 28th recommendation to own the AI application layer is paying off. Zeta Global Holdings (ZETA) just hit a new yearly high. It is up 88% since our initial recommendation.

• Payment giants Visa (V) and Mastercard (MA) hit new one-year highs today. These are positive economic signals.

• E-commerce giant eBay (EBAY) hit a new one-year high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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The post How to trade AI stocks from here appeared first on MarketWise.

Today’s issue in preview:

• A new kind of AI trade is emerging. Here are the stocks to play it.

• Why Apple could be one of the biggest winners of the AI agent boom

• A new development for the world’s most important trend… and what it means for your portfolio

• Learn our Top Themes to buy now

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A new kind of AI trade is emerging. Here are the stocks to play it.

Credit: valentinrussanov

After we’ve invested more than a trillion dollars in AI infrastructure, new, leading AI models such as OpenAI’s ChatGPT-6 Astra and Anthropic’s Claude Fable 5.1 have become far more than just great search engines compared to the models of 18 months ago.

These models have extraordinary capabilities. They can analyze complex information, solve difficult problems, make decisions, and automate a wide range of tasks and business functions. They can generate useful “agents” that do lots of work for us.

So how in the heck do we leverage this new, awesome power inside our business?

That’s the question thousands of executives, corporate boards, and entrepreneurs are asking themselves today. It’s one of the hottest topics in the business world… one that will create huge opportunities for you as an investor.

After all, a company that successfully uses AI to increase efficiency, reduce costs, and generate more revenue could gain an enormous advantage over its competitors.

And a company that fails to embrace and master AI could find itself falling hopelessly behind.

That’s why many business leaders – especially those in knowledge industries such as law, software, consulting, research, marketing, and media – justifiably view mastering AI as one of their defining challenges of 2026 and beyond. Failure to do so poses an existential risk.

And when something is an existential risk that could result in a business leader getting fired, losing a big executive salary, and seeing her stock grants lose 75% of their value, that business leader is going to go to great lengths to prevent that potential risk from becoming real.

This means spending lots of money on enterprise software and data analytics firms that help companies integrate and leverage AI.

Enterprise software refers to applications and technology platforms that help businesses manage operations, organize and analyze data, automate tasks, and improve productivity. These systems support functions such as finance, sales, R&D, human resources, and supply chain management. Increasingly, enterprise software incorporates AI to help companies make better decisions and operate more efficiently.

In fact, to capitalize on the “mad dash” of businesses trying to incorporate AI, a smart enterprise software company will sell itself as an “enterprise AI” company.

Consulting giant Gartner expects AI software spending to rise from approximately $283 billion in 2025 to $453 billion in 2026.

Enterprise software has such strong AI-related growth prospects because taking old, legacy databases and software platforms and transforming them into lean, mean, AI-centric systems is a messy, complicated business.

This cannot be done by purchasing a ChatGPT subscription and having two run-of-the-mill employees work on it. Transitioning a large company’s disparate tech systems into a safe, reliable package of AI-powered systems is a huge task whose bill can run into the many millions of dollars.

This situation is proving to be bullish for enterprise software firms such as Palantir (PLTR), Datadog (DDOG), Dynatrace (DT), Snowflake (SNOW), ServiceNow (NOW), MongoDB (MDB) and UiPath (PATH).

This under-the-radar tech trend is one of the strongest themes in the market right now. Palantir, Datadog, Snowflake, and Dynatrace recently reached new one-year highs. Many such firms are enjoying 15%+ annual revenue growth.

The AI boom is entering a powerful new phase. After spending more than a trillion dollars building AI infrastructure, the business world is now racing to put that technology to work. For large corporations, integrating AI into existing systems is a complex, expensive, and increasingly urgent undertaking.

That creates an enormous opportunity for enterprise software and data analytics companies. As businesses scramble to harness AI’s capabilities, or risk falling behind, the companies helping them make that transition could generate big stock returns.

Why Apple could be one of the biggest winners of the AI agent boom

Credit: valentinrussanov

In yesterday’s issue, we detailed how the “AI Applications Layer” is a business and investment area with extraordinary potential over the next three years.

We expect to see dozens of businesses follow in the footsteps of legendary winners such as Amazon, YouTube, Facebook, and Netflix.

These winners didn’t build the physical network of fiber optic lines, routers, servers, and switches that made up the internet. Instead, they built the wonderful businesses on top of that revolutionary infrastructure.

They were the “applications” layer of the internet.

It’s important to understand the applications layer concept because we’re on the cusp of a historic boom in companies that don’t build critical AI “hard infrastructure” such as data centers and semiconductors…but instead build wonderful businesses on top of that infrastructure… just like Apple, Amazon, and Google did with the internet.

I’m talking about AI-centric businesses that revolutionize how we invest, how we develop medicines, how we educate, how we entertain ourselves, how we manufacture, how we shop, how we transfer money, and much more.

The internet changed every industry and created many new ones. AI will do the same.

Investors who follow the Internet applications layer playbook into big AI applications layer winners stand to make giant returns.

In yesterday’s issue, we highlighted how AI-centric data analytics firm Palantir (PLTR) is a powerful example of this strategy. The business is booming and its stock is up more than 1,100% since Jan. 1, 2024.

Today, the market is sending us a message that Apple (AAPL) is emerging as a winner in this trend.

Apple is the largest smartphone seller in the U.S. It also generates substantial revenue by selling iPads, Mac computers, and Apple Watches.

For more than 145 million Americans and more than 1 billion people globally, Apple devices are the primary gateway to the internet and, increasingly, to AI applications. In other words, Apple owns one of the most powerful and valuable digital product distribution networks in all recorded history.

As AI agents become more powerful and useful, consumers will increasingly spend money on agentic apps and services that perform complex tasks, solve problems, and manage their daily lives.

And for more than a billion people, Apple products will be the primary gateway to this new world. Their iPhones, iPads, and Macs will serve as the interfaces through which they interact with AI agents, issue instructions, and receive results. Apple doesn’t have to develop the world’s smartest AI models to become a big beneficiary of the agentic AI revolution. It already owns one of the world’s most valuable digital distribution networks.

Don’t take our word for it, however. Take the market’s word. This week, Apple reached a new all-time high. The stock has returned 40% over the past 12 months. It looks like, in Apple’s case, AI is going to help the big get bigger, and the rich get richer. And if the company could make Siri “not terrible,” then the sky is the limit!

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A new development for the world’s most important trend… and what it means for your portfolio

Credit: BlackJack3D

Apple’s new high (see above) isn’t good news just for Apple shareholders.

Strength in the stock helped power the Roundhill Magnificent Seven ETF (MAGS) to a new all-time high today.

That’s a great signal for the technology sector in general and the AI infrastructure trade specifically. It tells us the “world’s most important trend” is alive and well… and continuing to confound the very vocal group of AI bears that claim the trend is in a bubble.

MAGS is the largest ETF specifically designed to give investors exposure to the “Magnificent 7,” a group of dominant technology firms comprised of Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Tesla (TSLA), Amazon (AMZN), Apple (AAPL), and Meta (META).

Together, these firms are worth about $25 trillion and make up roughly 31% of the benchmark S&P 500. No group of companies in history has wielded this group’s awesome combination of power, technological expertise, and vast financial resources. This group includes nearly all the “hyperscalers” leading the AI revolution.

And the ETF that tracks this group reached an all-time high today.

This is a huge development for “the world’s most important trend.”

Over the past two months, we’ve published a special series of research notes analyzing the AI infrastructure megatrend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, the firms above have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $4 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech insiders who know the true state of bleeding-edge AI development and have real-time stats on AI investment ROI, such as Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon), could possibly… perhaps maybe… just might… know far more about AI and their businesses than outsiders know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact. Plus, as I’ve recently pointed out, anyone who says AI is a “bubble” should have their brain checked for defects.

Regular readers know I care a lot more about what the market thinks of any stock, trend, or theme than what any one person thinks of it, including me. You can be bullish or bearish on a trend all you like, but if that trend is moving strongly against you, then your idea isn’t worth much in my book.

Over the past few months, we have analyzed price action in critical areas of the AI infrastructure trade – including the VanEck Semiconductor ETF (SMH), computer memory giant Micron (MU), and optical networking stocks – to guide our trading.

Since the Mag 7 plays a central role in AI infrastructure, it is central to our analysis. Several of these firms have been singled out by bears for issuing debt to invest in AI data center construction.

However, right now, the market is saying debt issuance and ROI on AI infrastructure spend aren’t much of a worry… and that things are going quite well for the Mag 7.

As you can see in the two-year chart below, MAGS is in a clear uptrend and just broke out to an all-time high. This is bullish for the AI infrastructure trade, bullish for the tech sector in general, and bullish for America.

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Market Notes

• Payment giants Visa (V) and Mastercard (MA) just hit yearly highs. This is a positive sign for the economy.

• The Iran War and its constriction of oil and refined products continue to benefit U.S. refiners. Refining giants Phillips 66 (PSX) and Marathon Petroleum (MPC) reached new one-year highs today.

• Our September 2025 recommendation to invest in oil and gas stocks continues to pay off. Oil and gas giants Shell (SHEL), BP (BP), Suncor Energy (SU) and Petrobras (PBR) reached new one-year highs today.

• Last October’s recommendation to own the Boomer healthcare trend is paying off. AbbVie (ABBV) just hit new yearly highs. It’s now up 12% over the last month alone. Other healthcare-related names Oscar Health (OSCR), Haemonetics (HAE), and Hinge Health (HNGE) also reached new highs today.

• Space economy leader AST SpaceMobile (ASTS) reached a new one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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The post A new kind of AI trade is emerging. Here are the stocks to play it. appeared first on MarketWise.

Today’s issue in preview:

• A new AI investment strategy that could generate 1,100%+ returns

• This energy trend is producing winners day after day. Are you benefiting?

• Learn our Top Themes to buy now

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This energy trend is producing winners day after day. Are you benefiting?

Credit: sefa ozel

As it turns out, being bullish on oil stocks was a good idea.

Last week, one of our top energy recommendations – Canadian oil giant Suncor Energy (SU) – climbed 3.8% to reach a new all-time high. The stock has returned 73.5% since our original bullish oil call back in September 2025.

Last September, I made the case for going long the emerging uptrend in oil and gas stocks: As the global economy grows, oil demand will remain solid. However, importantly, U.S. shale oil production growth appears to be peaking.

Flatlining supply from this region would remove a critical and reliable source of production growth that has been in place for more than a decade. Plus, oil was very cheap relative to gold and other assets, indicating good value.

With all that in mind, we’ve written frequently and bullishly about owning Suncor, ExxonMobil (XOM), the diversified State Street Energy Select Sector SPDR Fund (XLE), and oilfield service stocks like those in the SPDR S&P Oil & Gas Equipment & Services ETF (XES). The oil sector has been one of the true market leaders over the past year. Both XOM and XLE recently reached new all-time highs.

When I recommended oil and started trading it from the long side, I did not factor in the potential bullish driver of the Iran War. That’s been a “bonus” driver of gains in oil stocks. Sometimes, the dice rolls in your favor.

Although positive news related to the Iran War could emerge at any time and trigger a short-term correction in oil and oil stocks, the long-term picture remains bullish. I see three reasons why this is the case.

One: Critical oil infrastructure in the Middle East has been damaged. Oil flows will not return to pre-war levels for possibly over a year. This supports oil prices north of $80 per barrel, which in turn supports strong cash flows for oil and gas firms.

Two: Most countries maintain substantial above-ground “buffer” supplies of oil and refined petroleum products in the event of market disruptions such as the Iran War. Over the past six months, much of these buffer supplies have been depleted to compensate for the loss of Middle Eastern flows. They must be replenished.

The coming restocking of buffer supplies will support oil prices north of $80 per barrel… which, again, supports large cash flows for oil and gas firms.

Three: Although oil stocks have enjoyed a large run since our September call, they aren’t up much over the past ten years. Adjusted for dollar debasement over the past decade, key oil and gas ETFs are down significantly. This is not an aging bull market that has attracted too many fans and too much capital. It is the opposite of that.

Avid Money & Megatrends readers know that I like to know both the bull and bear cases for any trend… but I care a lot more about what the market thinks of those cases than anything else. You can be bullish on an industry or theme all you like, but if the market is going against you, then your bullish thesis isn’t worth much.

As for the bull case for oil stocks, the market is enthusiastically supporting it… especially for companies with safe, reliable “not Middle Eastern” asset bases like key Canadian oil sand firms Suncor, Canadian Natural Resources (CNQ), Cenovus Energy (CVE), plus Argentine oil firm YPF (YPF). Our guidance remains: Stay long oil stocks.

A new AI investment strategy that could generate 1,100%+ returns

Credit: imaginima

Since Jan. 1, 2024, the market value of AI-centric defense giant Palantir (PLTR) is up 1,117%. Last Friday, the stock reached a new all-time high.

This giant gain makes Palantir one of the top-performing stocks of the 2020s.

It’s also a demonstration of how powerful the strategy of owning “AI Applications Layer” winners can be.

This strategy – which we most recently detailed in our July 15 issue – is so powerful that it can change your life. Like an “add a zero to your net worth” kind of change.

For a refresher of this strategy, think about Apple, Amazon, Google, Facebook, Netflix, and YouTube for a moment.

These are among the largest and most successful businesses in history.

Their early investors made 10X returns and, in some cases, 100X+ returns.

And they all have one thing in common: They didn’t build the physical network of fiber optic lines, routers, servers, and switches that made up the internet.

Instead, they built the wonderful businesses on top of that revolutionary infrastructure.

They were the “applications” layer of the internet.

It’s important to understand the applications layer concept because we’re on the cusp of a historic boom in companies that don’t build critical AI “hard infrastructure” such as data centers and semiconductors…but instead build wonderful businesses on top of that infrastructure… just like Apple, Amazon, and Google did with the internet.

The revolutionary AI program ChatGPT was released to the public in late 2022. Since then, big tech firms have invested over $1 trillion in semiconductors, networking equipment, computer memory, physical data centers, and other components of AI infrastructure.

This infrastructure powers extraordinary AI models that become more capable and faster by the month.

Now that so much infrastructure has been installed, thousands of businesses can be built upon it… much like how Amazon, YouTube, and Netflix were built upon the internet.

I’m talking about AI-centric businesses that revolutionize how we develop medicines, how we educate, how we entertain ourselves, how we manufacture, how we shop, how we transfer and invest money, and much more.

The internet changed every industry and created many new ones. AI will do the same.

Investors who follow the Internet applications layer playbook into big AI applications layer winners stand to make giant returns. In fact, I’d say this theme is one of the best places to find 10X+ winners over the next decade.

Palantir is a very early leader in this field.

Palantir is a leading software company that helps its customers use AI to organize, analyze, and act on huge amounts of complex data.

Palantir’s major products include Gotham, used extensively by defense and intelligence agencies; Foundry, designed for commercial enterprises; and Artificial Intelligence Platform (AIP), which integrates advanced AI models into business workflows.

Palantir’s largest customer is the U.S. government. Palantir provides military and intelligence agencies with advanced software that integrates battlefield intelligence, satellite imagery, sensor data, and operational information. Its AI-powered platforms help commanders identify threats, track adversaries, plan missions, coordinate forces, and make decisions.

If you want to conduct war in an ultra-high-tech fashion, you work with Palantir.

To be clear, Palantir did not build any AI data centers. Nor did it develop one of the leading frontier AI models. Instead, it has built software that harnesses the power of models from companies such as OpenAI and runs on computing infrastructure provided by others.

In effect, Palantir has positioned itself as a critical bridge between the extraordinary capabilities of AI and the organizations that can put those capabilities to work.

Palantir’s early mastery of AI and data analytics has helped it generate extraordinary revenue growth over the past six years. In 2020, annual revenue came in at $1.09 billion. In 2025, revenue came in at $4.48 billion. Palantir expects 2026 revenue to grow by an incredible 82% this year to about $8.15 billion.

Given this blazing growth, it’s no wonder Palantir is up more than 10X since early 2024. This is the AI Applications Layer phenomenon at work.

The AI infrastructure buildout is far from over. But enough advanced models have been developed, and enough infrastructure is in place, to fuel an extraordinary next phase of the AI boom.

Innovative companies in the “AI Applications Layer” can now harness this technology to build great businesses with extraordinary growth potential. Palantir is just the beginning.

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Market Notes

• Our 8th recommendation to own the Boomer healthcare trend is paying off. Biogen (BIIB) and AbbVie (ABBV) just hit new yearly highs.

• Our March 27th recommendation to own cybersecurity stocks is paying off well. Fortinet (FTNT), Okta (OKTA), Qualys (QLYS) and Dynatrace (DT) all hit new highs. OKTA is now up 160% in the last year alone.

• The Iran War and its constriction of oil and refined product supplies continues to work in favor of oil shipping firms. Industry leaders Frontline (FRO), Torm (TRMD) and Hafnia (HAFN) reached new one-year highs this week.

• Small Modular Reactor players Oklo (OKLO) and NuScale Power (SMR) both hit new yearly lows last week.

Regards,

Brian Hunt
Editor, Money & Megatrends

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Elon Musk just dropped another bombshell… He’s going after your cell phone provider. For months, Elon kept these plans under wraps. But late last week, he finally showed his hand. I’ve tracked this story for months, and it’s playing out exactly as I predicted. Next, I believe Elon could launch a new device that kills the iPhone… and hands early investors his biggest payday yet. Potentially 50 times their money. Here’s everything you need to do BEFORE he makes his move. Just act quickly because this story is moving fast.

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The post A new AI investment strategy that could generate 1,100%+ returns appeared first on MarketWise.

Today’s issue in preview:

• Seven stocks that could explode as AI goes mainstream

• AI’s hidden income opportunity: How to earn large income streams from the boom

• Why the U.S. dollar is plummeting in value… and how to protect yourself

• Learn our Top Themes to buy now

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Seven stocks that could explode as AI goes mainstream

Credit: Petrovich9

In June, Nvidia (NVDA) CEO Jensen Huang stood on stage next to Marvell Technology (MRVL) CEO Matt Murphy and predicted Marvell would be the “next trillion-dollar company.”

As a result, MRVL shares jumped 32% in a single day, which was the largest one-day gain in the company’s history. Plus, Marvell became one of the most widely followed companies in the tech world.

Why is Jensen – the “Michael Jordan of AI” – so bullish on Marvell?

Marvell is one of the world’s leading suppliers of optical networking semiconductors, particularly the chips that enable high-speed data transmission inside AI data centers. Market cap is $241 billion.

Jensen believes Marvell could become the next trillion-dollar company because it solves one of AI’s biggest challenges: moving enormous amounts of data between chips.

As AI data centers grow to include hundreds of thousands of processors, connecting those chips quickly and efficiently becomes critical. Marvell specializes in high-speed networking chips, optical connections, and custom processors that enable this.

Jensen sees these technologies becoming increasingly valuable as AI infrastructure spending explodes. Nvidia is so bullish on Marvell’s future that it invested $2 billion in the company and formed a strategic partnership to develop next-generation AI infrastructure.

Over the past two months, we’ve published a special series of research notes analyzing the AI infrastructure trend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, large tech firms such as Alphabet (GOOG), and Microsoft (MSFT) have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $3 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

Recently, we’ve detailed how new highs for Nvidia, AI chip leader Nvidia (NVDA), semiconductor manufacturer Taiwan Semiconductor (TSM) and the Roundhill Magnificent 7 ETF (MAGS) indicate the market is enthusiastically endorsing a continuation of the AI infrastructure megatrend.

This of course, is also bullish for Marvell.

Although bleeding edge semiconductors from the likes of Nvidia get most of the headlines, those chips are only as good as the connections between them.

As AI data centers grow more complex and more powerful, the number of chips connected inside them increases. A modern AI cluster, for example, ties together hundreds of thousands of chips that all must act together. If that data between chips moves too slowly, these expensive processors just sit there idle.

Traditionally, these data connections have been made from copper. But at the speeds required today, copper can’t keep up. It loses signal and burns power too quickly.

The fix is to slowly replace electrical signals traveling over copper with light signals traveling over fiber-optic cables. That’s what optical networking does. And it’s what Marvell is a world leader in.

Recently, Marvell put a huge spotlight on this technology at its investor day, held on October 6.

Until MRVL’s investor day, we knew optical networking gear had at least two years of solid demand ahead. But we never saw forecasts through to 2030 and beyond.

Marvell’s investor day just changed that.

Here’s is big news:

• Management estimates its total market opportunity will expand to approximately $400 billion, growing around 45% annually from 2025.

• Management forecasts annual revenue to climb from $8.2 billion in fiscal year 2026 to $80 billion in fiscal year 2031.

In other words, Marvell has made one of the most aggressive industry forecasts in the technology world… and one of the most aggressive company growth forecasts.

This forecast – plus the word of Jensen Huang – makes optical networking stocks like Marvell and fellow industry players Coherent (COHR), Lumentum (LITE), Ciena (CIEN), Credo Technology (CRDO) and Applied Optoelectronics (AAOI) one of the most compelling technology trends to monitor and consider as an investment candidate.

It is one of the highest leverage ways to invest in the mass adoption of AI.

Like most components of the AI infrastructure trade, Marvell enjoyed a big spring rally this year and a significant summer correction. It has since digested this correction, rallied, and is closing in on an all-time high. A break above that high would be a very bullish signal for the optical networking theme. We will keep you apprised of the situation.

AI’s hidden income opportunity: How to earn large income streams from the boom

Credit: stanley45

In yesterday’s issue, we highlighted how both large tech firms such as Google (GOOG) and the U.S. government are making huge investments in nuclear energy.

As more individuals and businesses leverage the power of “super intelligence,” more demands are placed on AI infrastructure… which means more demands on our national electric power system.

Since that overloaded system is already straining, AI has a “power problem.” We don’t have enough electric power plants. We don’t have enough connections to existing power plants. We don’t have enough high-voltage transmission lines.

A big part of the solution to this problem is nuclear energy. According to a 2026 analysis by energy consulting firm KeyLogic, annual U.S. nuclear power investment could reach $80 billion to $94 billion by 2035 under an ambitious expansion scenario designed to quadruple the nation’s nuclear generating capacity by 2050.

However, nuclear is only part of the solution to AI’s power problem.

Natural gas – and America’s natural gas transportation network – is a huge part of the solution as well.

Although building large amounts of nuclear power generation capacity is a compelling long-term solution to AI’s power problem, it is not a short-term solution.

Getting permits and project financing for a nuclear power plant typically takes years. And with permits in hand and financing secured, the industry expects build times of 7-10 years.

A nuclear plant is a gigantic, extraordinarily complex construction project. It requires huge reactor vessels, steam generators, coolant pumps, heat exchangers, and miles of specialized piping. Many of these components are frequently custom-built or produced in tiny quantities. There is nothing resembling the mass-production supply chain for conventional industrial equipment.

Once these often enormous, often highly specialized components are built, they must be installed in a precise sequence, inspected, tested, and integrated into a single safety-critical system.

Because the safety stakes are so high, nuclear power plant components are subject to rigorous testing. A problem with one component can hold up several downstream construction activities.

You typically cannot throw more workers at a nuclear power plant project to speed it up. You often cannot even throw more money at it to make it go faster. And so, it takes 7-10 years to build a new nuclear plant.

All this has made my recommendation of energy pipelines a big winner… and should keep it winning for years.

In early 2024, I began to see the oil and gas pipeline industry as the best way to generate substantial passive income from the AI boom.

The U.S. has enormous reserves of clean-burning natural gas. Plus, it has over 2,000 natural gas-fired power plants. An additional natural gas power plant can be built in less than a third of the time it takes to build a new nuclear plant.

However, all the natural gas reserves in the world aren’t worth much if you can’t get the gas from the wellhead to the plants.

This is where America’s vast natural gas transportation, processing, and storage industry comes in.

An extensive network of pipes crisscrosses America that allows energy companies to transport natural gas from prolific fields in Texas, Pennsylvania, New Mexico, West Virginia, and Louisiana to the nation’s power plants.

A boom in AI-related electricity demand by default means a boom in demand for natural gas transportation services.

Since 2024, the market has enthusiastically supported our bull case for energy pipelines. Blue chip pipeline operator Enterprise Products (EPD) has returned 67%. Fellow blue chip operators Energy Transfer (ET) and Kinder Morgan (KMI) have returned 92% and 129%, respectively. Each of these firms is enjoying terrific growth in volumes and revenue.

These individual stock gains have powered the energy pipeline-focused Alerian MLP ETF (AMLP) to a 64% total return since 2024. Despite AMLP’s big run and shares being near all-time highs, it still yields around 7.75%.

The typical pipeline operator is not your conventional “high-risk, high-reward” AI play. Instead, it’s a boring, predictable business that generates steady cash flows and shareholder distributions.

But the AI megatrend is giving natural gas a boost that will last for years. Plus, the Iran War and its constriction of Middle Eastern energy flows have made U.S. natural gas exports increasingly more valuable to customers in Europe and Asia. The Russia/Ukraine war is doing the same with its constriction of Russian natural gas exports.

Generating stable cash flows by transporting oil and gas isn’t as exciting as some high-tech industries, but business is booming… and will most likely do so for years. It’s a bull market in pipes!

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Why the U.S. dollar is plummeting in value… and how to protect yourself

Credit: Backyard Production

Every day across America, people complain about high prices.

The price of gasoline is high.

The price of groceries is high.

Young people can’t afford homes because their prices are high.

We all know the prices of many things we buy a lot of are way up over the past seven years.

But do we all know why?

I’ll answer that for you: No.

Most people have a vague, nagging feeling that soaring prices may have something to do with runaway government spending, the U.S. deficit, and inflation. They know something isn’t quite right… But they don’t fully understand what is happening.

Here is what is happening in simple terms anyone can understand…

Over the past 50 years, the U.S. and state governments have made many promises to many people. Social security payments. Medicare. Medicaid. Pensions. Defense contracts. Veterans’ benefits. Government employment contracts. Unemployment benefits. Food stamps. Federal education programs. Plus, you have the day-to-day costs of things like roads, bridges, police, and regulatory enforcement.

And over those same 50 years, a dangerous trend has taken root. More and more people have grown very comfortable voting themselves benefits paid by their fellow taxpayers. This trend has become so strong that our government has promised far too many things to far too many people. They are spending far more on social programs, pensions, and wars than they collect in tax revenues.

The related debts and obligations governments have taken on cannot be paid back with sound money. They can only be paid back with debased, devalued money… much of which is created out of thin air. Every freshly printed unit of currency debases an existing one.

This is driving inflation and significant currency debasement. Prices are going up because the value of our money is going down.

Measured against a basket of widely used raw materials like crude oil, corn, silver, sugar, and soybeans, the U.S. dollar has lost 48% of its value over the past eight years.

Here in mid 2026, the problem is worse than ever. In America, millions of people are net tax recipients – meaning they receive more in benefits than they pay in taxes. Plus, according to the U.S. Bureau of Labor Statistics, about 15% of all jobs in America are government jobs (federal, state, local). These folks aren’t voting for fewer benefits or fewer jobs.

No politician can win a major election by promising reduced spending.

Too many people are now riding the gravy train.

Democrat or Republican, it doesn’t matter.

Campaigning on sensible spending is a sure loser.

So, what stops the insanity?

How can we get spending under control?

Sorry – bad news. Too many voters either work for the government directly or indirectly or are net tax recipients. They will flat-out not vote for someone who promises to cut benefits, handouts, and spending. This crazy spending is a runaway train.

We will only “get religion” after a financial market crisis forces us to get it.

It’s like how most alcoholics won’t make a change until they’ve almost killed themselves in a car crash or something… or how someone that doesn’t exercise and has a horrible diet won’t change their ways unless a health crisis forces them to.

It’s just human nature. We tend not to change unless we get hit with a metaphorical 2×4 to the head.

So, keep all this in mind next time you see high prices or think about inflation. Sure, you can think of it as prices going up. Or, you can think of it as the value of the money is going down.

This phenomenon shapes all kinds of things and distorts many concepts people hold. For example…

*People like to make a big deal about the massive market values of giants like Nvidia (NVDA) and Apple (AAPL). But keep in mind that since the value of the dollar has declined by about 50% over the past eight years, today’s $5 trillion is worth about $2.5 trillion in 2018 dollars.

*People like to point out that oil prices are very high, but today’s $90 barrel of oil is worth about $45 in 2018 dollars.

*People who recently sold a house for a lot more than they paid for it 10 years ago aren’t actually any wealthier. The value of the money plummeted, so the home’s price went way up. They essentially treaded water, minus all the insurance costs, maintenance costs, and taxes. Their “profits” are largely an illusion: The money they pocketed doesn’t buy any more food, gas, or housing than it did 10 years ago.

*If a company generated $1 million in profits in 2018 and generated $2 million in profits in 2025, it didn’t grow in real terms.

*A $250,000 salary in 2018 is worth roughly a salary of $125,000 in 2026.

You get the picture.

It’s easy to get tripped up or mistaken by the great “money illusion”

The government wants you to see rising wages, rising home prices, and rising stock prices and then feel richer and happier.

That would mean you’re more likely to support the status quo and less likely to agitate for change.

But it’s an illusion.

We’re all “earning” more money… and we’re all “making” money in the housing and stock markets…

… But those gains are a mirage.

The money we’ve been making at our jobs, in our homes, and in our stocks aren’t buying us any extra food, fuel, or free time.

We aren’t increasing our level of real wealth because the price of everything is going up.

The value of our money is going down.

You can think of prices for everything in America – homes, cars, gasoline, food, insurance, medical care – as boats on a lake.

And our money supply is the water level in the lake.

As the water level rises and rises, all the boats go up. But your real wealth doesn’t increase a bit. Every vessel on the water goes up with the water level.

And remember…

More water has been pumped into America’s “money supply” lake in the past five years than was pumped over the previous 100 years.

Sure, the price of your home is rising, but the price of everything you buy is rising.

You can think about “cashing in” and banking some profits produced by the rising price of your home, but remember that if you sell your existing house, you must buy a different house at a greatly elevated price!

You can think of the price going up, but you should also know the value of our money is going down.

This is all why it’s more important than ever to be vigilant against inflation and own many of the “inflation defense” assets we’ve covered, such as oil and gas pipelines, gold, timberland, copper mines, gravel pits, and solid, growing businesses.

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Market Notes

• Medical device giant Boston Scientific (BSX) reached a new one-year low this week.

• Casino giant Las Vegas Sands (LVS) reached a new one-year low this week.

• The Iran War and its constriction of oil and refined product supplies continues to work in favor of oil shipping firms. Industry leaders Frontline (FRO), International Seaways (INSW), and Hafina (HAFN) reached new one-year highs this week.

• Software leader Atlassian (TEAM) reached a new one-year high this week.

Regards,

Brian Hunt
Editor, Money & Megatrends

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An urgent message from our colleagues:

Blue Origin… DOOMED

Jeff Bezos should be terrified. He will be down on his knees, begging Elon for mercy. Because Elon is set to: Cut Amazon out of the AI race ENTIRELY…Completely DESTROY Blue Origin…And take control of the potential $25 TRILLION DOLLAR PER YEAR AI INDUSTRY. And in his wake, potentially create 1,806,000 NEW millionaires over the coming years… Starting December 8. And this is your chance to be one of them. Legendary tech investor, James Altucher, shows why a single FCC filing proves it.

Click here to see why.

The post Seven stocks that could explode as AI goes mainstream appeared first on MarketWise.

Today’s issue in preview:

• The massive bull market nobody is talking about

• Are you an AI moron? Take our quiz!

• Learn our Top Themes to buy now

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The massive bull market nobody is talking about

Credit: Martin Philip

The hits keep coming for the Healthcare Diagnostics and Genomics themes.

And the healthcare gold rush continues to generate winner after winner

This week, Adaptive Biotechnologies (ADPT) advanced to a new all-time high. The stock is up 14% over the past month and up 124% over the past year.

Adaptive is a $4.7 billion market cap specialized diagnostics firm whose tests are used to detect and monitor minimal residual disease (MRD) in blood cancers such as multiple myeloma and certain leukemias. Adaptive also performs advanced genetic sequencing analysis to study how the immune system responds to disease and treatments.

Its fellow diagnostics firm, Biodesix (BDSX), recently reached a new high as well. The stock is up 262% over the past year. Biodesix is a $304 million lung-cancer diagnostics firm. It uses blood-based tests that help evaluate suspicious lung nodules and guide treatment.

Two familiar names to Money & Megatrends – genetic testing giants Natera (NTRA) and Illumina (ILMN) – also reached new one-year highs. The stocks are up 152% and 198%, respectively, in 2026.

Adaptive, Biodesix, Natera, and Illumina are unique firms where our Healthcare Diagnostics theme overlaps with our Genomics theme. As we’ve covered many times this year, both themes are high-growth segments of the larger Boomer health care megatrend.

Thanks to huge advances in next-generation genomic sequencing, all kinds of new screens and tests are being developed, moving the healthcare system from “reactive, one-size-fits-all treatment” to much better “preventative and personalized treatment.”

An ounce of prevention is worth a pound of cure. And advanced genetic testing – that analyzes both the patient and the disorder at a fundamental genetic level – is the current ultimate expression of this axiom.

Natera may be the best large-company example of how this technology is translating into sales. The company’s revenue increased 35.9% in 2025 to $2.31 billion, while tests processed increased about 15% to 3.53 million.

Cancer testing giant Guardant Health (GH) provides another strong example. Revenue increased 33% to $982 million in 2025. Oncology test volume increased 34% to approximately 276,000 tests, while oncology revenue rose 26%.

I worry some readers may tire of reading about these booming healthcare trends. We’ve devoted so much attention to them because they’ve been paying off so well for us. This is where the money is. It’s like the stock market version of what the famed bank robber Willie Sutton said. When asked why he robs banks, Sutton said, “Because that’s where the money is.”

We publish a lot on healthcare because that’s where the money has been for the past year. It’s a trend that is paying us. Given the very large and long-term nature of the Boomer healthcare megatrend, we expect it to continue. Stay bullish on Genomics and Healthcare Diagnostics.

Are you an AI moron? Take our quiz!

Credit: da-kuk

Are you an AI moron?

Or, do you understand what stock market bubbles look and feel like?

Today, you can take our test and find out if you are an “AI moron” or not.

Don’t worry. It’s the easiest test you’ll ever take.

It’s just one question. And it’s a yes-or-no answer.

But the answer to this test could help you make a lot of money in stocks.

And if you end up getting the answer wrong and find yourself in the “AI moron” category, don’t worry. We can help you get out of it quickly and easily.

Before you take the test, let’s provide some context…

If you’ve been reading Money & Megatrends for the past few weeks, you know we’ve been running a special research series on what we call “the world’s most important trend,” which is the trend of the enormous AI infrastructure boom.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, large technology firms such as Amazon (AMZN), Meta (META), and Microsoft (MSFT) have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $4 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years.

It has also drawn the skeptical scrutiny of many widely followed investment professionals who claim the trend is a bubble… one that will soon explode, and cause tremendous damage to stock prices and the global economy. (Most of these guys have been saying the same thing for two years and missing massive opportunities.)

You probably know where I sit in this debate. I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech insiders who know the true state of bleeding-edge AI development and have real-time stats on AI investment ROI, such as Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon), could possibly… perhaps maybe… just might… know far more about AI and their businesses than outsiders know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact. Yet, as we’ve detailed in past issues, the Total Addressable Market (TAM) for super intelligence across all industries and countries over the next decade is north of $100 trillion.

The true leader of the AI revolution is Nvidia (NVDA).

Nvidia is the world’s largest company and the most consequential AI company.

Nvidia founder and CEO Jensen Huang saw the AI revolution coming before virtually anyone… and positioned his company to benefit. The company’s annual revenue has climbed from $27 billion in fiscal 2023 to $215 billion in fiscal 2026 (which was almost entirely the 2025 calendar year) and is forecasted to grow to around $410 billion in fiscal 2027 (which is almost entirely the 2026 calendar year) and to roughly $675 billion in fiscal 2028 (which is almost entirely the 2027 calendar year).

Nvidia designs a large portion of the world’s most advanced AI semiconductors. It has also used its enormous cash flows to become a key investor in many AI firms… and to become essentially a “central bank of AI,” capable of financing many very large AI companies and initiatives.

Nvidia is not an 800-pound gorilla of AI… but perhaps an 800,000-pound gorilla of AI. Few companies in history have wielded Nvidia’s awesome combination of power, influence, technological expertise, and vast financial resources. If you wanted to argue that zero companies have, I wouldn’t protest.

AI is Nvidia. Nvidia is AI.

Now, as bright as Nvidia’s future is, the stock trades for only about 24 times this year’s estimated earnings and less than 15 times 2027 expected earnings. That’s a relatively low current P/E and forward P/E for any company that is rapidly growing earnings like Nvidia.

The entire market has looked at the AI boom, evaluated its future prospects, and collectively awarded Nvidia … a multiple often placed on middling fast-food chains. Too many people running large investment funds believe the AI boom will slow down, so they refuse to “pay up” for this leader. Too many people believe Nvidia’s earnings will decline substantially soon.

This brings us to our one question test:

Do you think AI is in a bubble?

Think about it for a few seconds.

Okay, if you answered YES, then you are an AI moron.

Or, you are at least terribly misinformed about what the word “bubble” means when used in an economic or stock market context.

As mentioned above, many high-profile investment professionals proclaim “AI is a bubble” every time they get within five feet of a microphone, keyboard, or video camera.

They see the historic amounts of infrastructure spending, the borrowing by big tech firms to fund some of it, the big AI claims, and the enormous stock returns produced by AI companies and say, “AI is a bubble.”

Hmm.

I’ve lived and traded through a bubble. I’ve studied history. And I can tell you this is not a bubble. It does not feel like one. It does not look like one. It is not one.

A financial bubble occurs when widespread speculative fever grips a large portion of society, and the price of an asset, such as stocks, rises far beyond its economic utility and far beyond feasible growth forecasts.

Bubbles are typically fueled by unbridled optimism and a nearly nationwide speculative fever. In a bubble, virtually every time the bubble asset is featured on TV, newspapers, or magazines, it is highly favorable coverage that asks NOT IF it’s going to go up, only “HOW MUCH” it is going to go up. In a bubble, extraordinary expectations are taken for granted.

One of the “must have” attributes a market must have to be accurately labeled as a bubble is widespread “fever-like” bullishness among people who normally don’t invest or play the stock market.

The legendary Joe Kennedy famously provided the salient example of this. According to Wall Street legend, Kennedy knew speculation had reached dangerous levels before the 1929 crash when his shoeshine boy began giving him stock tips. In modern times, it’s when taxi drivers, Uber drivers, and bartenders give you tips and trade stocks or crypto on their phones as they work. Again, a nationwide fever. Extreme froth.

Sure, there are skeptics of the bubble, but most people talking about it are bullish.

Another “must have” hallmark of a bubble is that speculative fever drives companies in the industry to insane valuations. For example, both Cisco and Qualcomm traded for over 100 times forecasted earnings in 2000. At the height of the Japanese stock bubble of the 1980s, the entire index traded for around 60 times earnings.

Okay. With the defining features of a bubble in mind, I ask you, How in the hell can AI be in a bubble when AI’s “poster child” – the #1 most consequential AI stock – is trading for less than 15 times next year’s expected earnings?

Has the AI bubble crowd read a single financial history book?

Do they have AI Derangement Syndrome?

Did they hit their heads on something and forget what “bubble” means?

Did they mean to say “AI will double” instead of “AI bubble”?

Instead of nationwide fever, unbridled optimism, and absurdly expensive market leaders, we see a lot of the opposite right now.

Right now, we see:

• Massive opposition to AI data centers

• Massive distrust of AI leaders such as Dario Amodei of Anthropic.

• Massive skepticism of AI infrastructure investment ROI.

• Massive worry over “AI will kill us all.”

• Massive worry over AI taking jobs.

• The most consequential, highest profile “poster child” AI stock trading for about 15 times next year’s estimated earnings.

These are not the characteristics of a bubble. So, when you say AI is in a bubble, you sound like a moron. I’m sorry.

The talking head that says AI is a bubble may reply to my assertion by saying the AI infrastructure boom is a bubble, not necessarily the AI stocks. Or they will say there’s a bubble in a handful of overvalued companies, such as OpenAI or the compute provider CoreWeave.

If that’s how you feel, then make that distinction. Because when you make the blanket statement that “AI is in a bubble,” you sound like a moron. You sound like someone who doesn’t know what “bubble” even means when applied to stocks.

You cannot be in a bubble when the most consequential stock in the industry is trading for 15 times next year’s expected earnings. An industry cannot be in a bubble (aka “mania”) when a giant portion of the population is not only avoiding investing in it but openly detests it!

The taxi driver and the bartender are not passing along AI stock tips.

They hate AI!

They think AI is going to kill us all.

To be clear, AI infrastructure stocks do not need to be in a bubble to trade sideways or drop 30%. I’m not saying AI stocks can’t or won’t go down from here. They can. But being vulnerable to a decline is not remotely the same as being in a bubble.

Will the AI trade ever form a bubble?

I hope so. The ride up will be full of opportunity. Plus, bubbles create enormous market distortions, extremes, and opportunities. Plus, they are entertaining. I like to see people do insane things as long as I’m watching from a distance or on a big-screen TV.

However, we are not in bubble territory right now. Sure, there are pockets of high valuation. Sure, there are some aggressive and leveraged companies that will fail. Of course. That happens in every garden-variety boom.

But there is no nationwide speculative fever.

There is no mania driving taxi drivers and shoeshine boys to issue stock tips.

When Nvidia starts trading for 80 times forecasted earnings, give me a call, and we’ll talk bubbles. I will agree with you. But for now, if you’re saying, “AI is a bubble,” stop being a moron.

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Market Notes

• A good sign for the AI infrastructure trade: Semiconductor leader Advanced Micro Devices (AMD) hit an all-time high and is now a $1 trillion company.

• Clothing and footwear giant Nike (NKE) reached a new one-year low today.

• Food and beverage giant Pepsico (PEP) reached a new one-year low today.

• Elevator giant Otis Worldwide (OTIS) reached a new one-year low today.

• Alcoholic beverage giant Constellation Brands (STZ) reached a new one-year low today.

• Grocery store giant Sprouts Farmers Market (SFM) reached a new one-year low today.

• Home improvement and building materials giant Lowes (LOW) reached a new one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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An urgent message from our colleagues:

Wall Street Legend: “I’ve discovered a fatal flaw built into Elon’s AI model”

60-year Wall Street legend Marc Chaikin has discovered a fatal flaw built into Elon’s AI model and every AI frontier model on earth… and says the race to fix it could send one obscure stock soaring. Right now, behind a high-security fence in rural Tennessee, the U.S. government is quickly working to solve it by building a new form of AI – what Marc calls “Sovereign AI.” He believes it could trigger a $248 trillion boom, 56x bigger than today’s AI market.

Click here for the full story and get the name and ticker of Marc’s No. 1 stock to buy now, 100% free.

The post The massive bull market nobody is talking about appeared first on MarketWise.

Today’s issue in preview:

• This new catalyst could send Bitcoin much higher from here

• An important new development for “the world’s most important trend”

• How to invest in AI and robotics… with one great company

• Learn our Top Themes to buy now

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This new catalyst could send Bitcoin much higher from here

Credit: Vertigo3d

We drew a line in the sand for Bitcoin. And it didn’t take long to cross it.

Now, the world’s leading form of “digital gold” is in a bull market by our reckoning.

Back in March, we wrote a bullish research note on how we believed Bitcoin had reached an important bottom.

And earlier this month, we noted that if Bitcoin cleared the $82,500 level and reached a new six-month high, it would signal that Bitcoin is back in a bull market… which could attract billions in new buying and send it north of $100,000 per coin. This would, in turn, help drive adjacent bull markets in blockchain-based stablecoin and tokenization trends.

It didn’t take long for Bitcoin to challenge our key $82,500 level and leave it in the dust. On Monday, Bitcoin rallied past that level to reach $86,000, a new 10-month high. This is a huge change in market climate compared to earlier this year.

After reaching an all-time high of around $125,000 last October, Bitcoin entered a brutal bear market, declining by about 48% to the mid-$60,000 range.

Crypto specialists attributed this decline to the U.S. government withdrawing liquidity from financial markets, as well as to gold and AI trades drawing money flows that could have been directed toward Bitcoin.

Most long-term Bitcoin believers see it as a “store of value” that should maintain its purchasing power like gold and beachfront homes do. It should be a digital form of “hard money.” Sounds great.

However, from October 2025 to February 2026, Bitcoin traded more like a failing technology company than anything you’d call strong and stable.

In March, Bitcoin’s trading behavior changed significantly. It formed a bottom and gained 9.5% in one month, while technology stocks dropped and gold gained just 3.2%.

Importantly, Bitcoin outperformed stocks and gold as Operation Epic Fury created tremendous market volatility and hammered many sectors of the stock market. It was a “port in the storm.”

Importantly, Bitcoin recently rallied above its long-term 200-day moving average. This is a good sign of an improving health trend.

Remember what we say about the 200-day moving average around here: Securities below their 200-day moving average are on the wrong side of the tracks. It’s the ugly part of town. All the really bad things happen below the 200-day moving average. Bitcoin has broken above it.

Bitcoin has not only rallied over the past month but has also done so while the CLARITY Act failed to pass Congress. Many industry specialists believed a “pass” of this bill was bullish and a “fail” was bearish. Well, it failed to pass. And yet, bitcoin kept rising.

So, after a year of disappointing believers, has Bitcoin regained its place as a “store of value”?

Is it ready to be a “port in the storm” and a stabilizing component of serious portfolios?

I believe that is the case.

As you can see in the chart below, Bitcoin recently cleared the $82,5000 level and reached a new 10-month high.

As noted above, I believe this break is a signal to the market that Bitcoin is back in a bull market… which will draw in billions of dollars in new buying and send it north of $100,000 per coin. This will be bullish for the bull markets in blockchain-based stablecoins and tokenization. Let the money flow begin!

An important new development for “the world’s most important trend”

Credit: KanawatTH

In yesterday’s issue, we looked at the fresh all-time highs reached by the Roundhill Magnificent Seven ETF (MAGS) and noted the move was a bullish new development for the AI infrastructure trade, which we’ve labeled “the world’s most important trend.”

MAGS is the largest ETF designed to give investors exposure to the “Magnificent 7,” a group of dominant technology firms comprised of Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Tesla (TSLA), Amazon (AMZN), Apple (AAPL), and Meta (META).

Together, these firms are worth about $25 trillion and make up roughly 31% of the benchmark S&P 500. This group includes nearly all the “hyperscalers” leading the AI revolution. It plays a central role in the AI infrastructure trend. And much to the disappointment of AI bears, the group just reached a new all-time high.

But this move wasn’t the only hugely positive development for AI infrastructure this week. On Monday, the giant of AI memory – Micron (MU) – broke out of a sideways consolidation pattern and reached its highest point since early July. This is a big deal.

Over the past two months, we’ve published a special series of research notes analyzing the AI infrastructure megatrend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, the firms above have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $4 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech insiders who know the true state of bleeding-edge AI development and have real-time stats on AI investment ROI, such as Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon), could possibly… perhaps maybe… just might… know far more about AI and their businesses than outsiders know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact.

Over the past few months, we have analyzed price action in critical areas of the AI infrastructure trade – including the VanEck Semiconductor ETF (SMH) and optical networking stocks such as Lumentum (LITE) – to guide our trading. The trend in computer memory stocks such as Micron is another key aspect of AI infrastructure we must analyze.

Memory chips are a critical part of AI data centers because AI systems constantly require large amounts of data to perform their tasks. Think of memory as the information sitting within easy reach of an AI chip. The faster the memory, the faster powerful AI chips can get the data they need. As AI models get bigger and smarter, they need more and faster memory to keep up.

Micron is America’s largest memory chip maker. Along with South Korea’s Samsung and SK Hynix, it is one of the “big three” global memory chip makers. The state of Micron is essentially the state of the memory business.

The massive AI infrastructure buildout has been a boon to Micron’s business. Micron revenue grew 49% in fiscal 2025, and the stock soared over 950% from June 1, 2025, to June 1, 2026.

Since reaching a high in June, Micron’s stock has moved in line with the semiconductor sector, which we’ve been tracking closely.

As you can see in the one-year chart below, Micron declined from its June high and entered a directionless sideways consolidation. On Monday, the stock surged 2.77% and broke out of this sideways pattern to reach its highest point since June. Importantly, another AI infrastructure giant – Marvell Technology (MRVL) – did the same.

These new short-term highs by themselves are not “all clear, full speed ahead” signals for the world’s most important trend. But when you pair them with new all-time highs for MAGS, you see the weight of the evidence is tilting bullish for the AI infrastructure trade.

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How to invest in AI and robotics… with one great company

Credit: OGULCAN AKSOY

If you look under the hood of the Magnificent 7’s rally to new all-time highs (detailed above), you see a large portion of it is attributable to a large upside move in Meta (META). The stock has gained 22% over the past two weeks, a phenomenal move for a megacap stock.

This move makes our bullish July 31 call on the stock a big winner. In that research note, we detailed how Meta was badly oversold, represented growth at a reasonable price, and would draw large amounts of buying from institutional money managers.

It didn’t take long for this thesis to deliver value. Meta stock is up 39% in less than two months, which is a tremendous 268% annualized pace.

“Great Hunt, but that’s in the past. What’s the next good big tech trade?”

I believe the answer to that question is a stock I’ve called “the best way to invest in AI and robotics at the same time” – Amazon (AMZN).

Avid Money & Megatrends readers know that we believe AI and robotics are two of the biggest business and investment trends of the 21st century. They will revolutionize the way we live as much as electricity or the automobile did…. while creating huge stock market winners along the way.

Tech giant Amazon is uniquely positioned to benefit from both technologies.

Although everyone knows about Amazon, the online retailer, and almost everyone is a customer, most people don’t know about Amazon, the giant employer of robots.

Last June, Amazon announced it had deployed its 1 millionth robot across its business. It describes itself as the world’s largest manufacturer and operator of mobile robotics.

Amazon operates more than 1,000 warehouses in the U.S. It ships millions of packages across millions of miles every month. This blizzard of activity can become more efficient and profitable with AI-enhanced logistics and robots that don’t complain, don’t take coffee breaks, and don’t ask for raises.

In other words, Amazon is uniquely well-suited to benefit from a megatrend in which robots will become cheaper, faster, more dexterous, more durable, and smarter soon.

Amazon is also heavily involved in AI. It owns equity stakes in AI leaders OpenAI and Anthropic. Plus, its huge AWS cloud computing division is benefiting from skyrocketing demand for AI compute. In Q2 2026, AWS generated $42 billion in quarterly revenue and 37% year-over-year growth.

AWS profit growth is also incredible. AWS’s operating income rose 64% YoY to $16.6 billion, with its operating margin reaching 39.4%, versus 32.9% a year earlier. AWS is now running at roughly a $169 billion annualized revenue rate

Add these robotics and AI assets to the world’s largest online retail business, and you get a pretty good bet on the future of technology in one stock.

Plus, a “back of the envelope” valuation analysis says you get all the growth and potential detailed above for a reasonable price.

Our conservative estimate of AWS value is around $1.5 trillion. Bank of America analysts recently estimated its value at roughly $1.9 trillion. From what we can decipher from Goldman Sach’s research, it has a roughly similar estimate of AWS value.

Now here’s where it gets interesting. Let’s break down Amazon’s E-commerce and Amazon’s Digital Ads business separately:

E-Commerce: Amazon’s annual revenue run rate in retail is currently $547 billion. Comparable retail businesses often trade at 1x–1.8x sales, which implies an approximate valuation of around $800 billion.

Digital Advertising: FY26 revenue is north of $80 billion, with operating margins likely above 50%, resulting in an operating income of $40 billion. At a conservative 20x EBIT multiple, we have an $800 billion business there alone.

Between AWS, E-Commerce, and Digital Advertising, you get to $3.1 trillion in value… which is more than Amazon’s current market cap of $2.7 trillion.

Also consider that Amazon’s combined stake in OpenAI and Anthropic is worth around $240 billion right now. Then there’s…

• Amazon Prime Video

• Zoox: Amazon’s autonomous vehicle bet.

• Project Kuiper: Amazon’s satellite internet initiative taking on Starlink.

• One Medical: Amazon’s primary care business

• And then add on the fact that Amazon is “still in the early stages of how we’ll leverage robotics” as per CEO Andy Jassy.

With approximately 800,000 warehouse and delivery employees, even a modest improvement in operating efficiency from automation can produce billions of dollars of extra free cash flow at Amazon’s scale.

In other words, there’s a lot to like about Amazon’s growth prospects. And as we’ve detailed above, the current valuation is not excessive. It leaves plenty of upside should Amazon build on its momentum and execute on its plans. History shows that’s a bet worth making.

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Market Notes

• Our recommendation to invest in the genomics megatrend continues to pay off. Sector leaders Twist Bioscience (TWST), Natera (NTRA), and 10X Genomics (TXG) reached new all-time highs today. Twist is up 415% since our bullish note. 10X is up 578%. Natera is up 123%.

• The tech-focused Nasdaq 100 ETF (QQQ) advanced to a new three-month high today.

• The widely followed and aggressive technology ARK Innovation ETF (ARKK) reached a new 10-month high today.

• Tech supergiant Apple (AAPL) reached a new all-time high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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An urgent message from our colleagues:

Buy this off-the-radar AI stock Sept. 29th

You won’t hear about this from CNBC, Forbes or the Wall Street Journal. But Donald Trump has committed $1 billion in support for an obscure AI stock… A company helping to unleash a whole new category of Artificial Intelligence. Louis Navellier and his team have spent months researching this opportunity. He even traveled to Mar-a-Lago several times, personally. And he anticipates a potential announcement from this company on or before Sept. 29th. That’s why he’s encouraging his readers to buy the stock now – before that date.

Watch his brand-new presentation detailing everything you need to know, including the name and ticker of the company behind the coming revolution.

The post This new catalyst could send Bitcoin much higher from here appeared first on MarketWise.

Update – September 21, 2026: Since this article discussing what’s coming for white-collar workers and investors in America was originally published in April, several major developments have happened with AI that you should be aware of…

• First, the white-collar layoff wave that we detailed here has only grown stronger in recent months. AI was the leading reason given for layoffs for a record five months straight… beginning in April, when we first published this guide, through July. And it remains the leading reason for layoffs so far in 2026. Already this year, more than 100,000 Americans have been laid off thanks to AI.

• The corporate examples keep piling up. Uber (UBER) plans to eliminate more than 3,000 roles… Microsoft (MSFT) laid off nearly 5,000 employees… Oracle (ORCL) has axed more than 20,000… British American Tobacco (BTI) is cutting 9,000 as it tries to become “more digital and AI-focused”… and dozens of other tech companies are shedding double-digit percentages of employees thanks to AI-focused restructuring.

• Nonetheless, investors are still early to this story… The “ripping point” gap that we’ve detailed below is widening. And AI is only getting smarter. The next six months will likely create more wealth than the last 100 years combined. But only for those who are prepared.

• If you haven’t already, you can watch the full Ripping Point documentary by clicking here – including the name and ticker of one stock to sell immediately and one “hidden AI” play to buy right now.

The rest of this guide has been updated to reflect these developments…

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Days ago, Wall Street veteran Whitney Tilson started sounding an alarm.

He calls it America’s “ripping point.” And if you haven’t heard the term yet, you soon will.

Whitney is the man who CNBC once dubbed “The Prophet” for his string of eerily accurate market calls. And now, he says the country is entering a stretch of upheaval unlike anything he has seen during his career.

It’s all due to artificial intelligence (“AI”)… and it’s beginning to tear the economic fabric of the nation apart.

AI will create massive new fortunes for a small group of people, while ripping away the livelihoods and security of millions of others. Already, white-collar workers like lawyers, analysts, consultants, managers, and software engineers are watching AI creep into their jobs… and wondering for how much longer they’ll still have a job.

You’ll see another tech layoff in the headlines soon. And another after that. You’ll see hundreds more as Whitney’s ripping point prediction plays out.

But Whitney’s message is not all bad news.

He insists this turmoil also carries huge opportunity. And he’s coming forward in an exclusive interview with a step-by-step plan to help everyday Americans use AI in their own investing.

Table of Contents

• Three Core Ideas Behind Whitney’s “Ripping Point” Prediction

• The American Ripping Point: A Tale of Two Economies

• The AI Revolution’s Winners and Losers

• Harnessing AI for Investors with the New Engine of Wealth System

• What Is Stansberry Research?

• Who Is Whitney Tilson?

• Frequently Asked Questions

• How an Investor Can Profit from Whitney’s “Ripping Point” Prediction

Three Core Ideas Behind Whitney’s Prediction

I’ve rarely, if ever, heard Whitney this worried.

I’ll leave it in his own words:

I’m concerned that our whole way of life is being swept away in front of our eyes…

Hundreds of thousands of people are losing their jobs. Violent swings are battering the stock market. Entire industries are collapsing around us.

I’m not only worried for older folks like me. I have three beautiful daughters. And it feels like their future gets more unstable with every passing day.

It’s not just because of the extreme political division or violent protests that seem to be a regular part of our lives now. I mean the deeper change that we can all feel.

We’re living through a permanent reset in our economy. It’s making the world – the one our children are going to inherit – deeply unstable.

He wrote that in March… For the next five months in a row, AI led as the reason for job cuts according to outplacement firm Challenger, Gray & Christmas. And so far, they report that more than 100,000 people this year alone have been laid off thanks to AI.

Looking ahead, Whitney’s “ripping point” prediction will affect every American with a 401(k) or retirement account. And it comes down to three core ideas.

First, America has hit a societal and economic breaking point.

One group of Americans is using AI to race toward new wealth – or simply to grow their current wealth. But another group is sliding into financial insecurity. And the gap between them is growing fast.

A key measure of wealth concentration called the Gini coefficient sits at 60-year highs according to a report from U.S. Bank, and terms like the “K-shaped economy” are now commonplace.

As CNBC reported in January:

“This is not a cyclical or temporary phenomena,” said Mark Zandi, chief economist at Moody’s Analytics. “This is a structural, fundamental issue.”

Federal Reserve data shows that the top 1% in America now control nearly one-third of the nation’s wealth. The bottom half of the U.S. population, on the other hand, controls less than 3%.

And white-collar hiring keeps shrinking… Core office sectors have been cutting jobs for three straight years now, according to the Bureau of Labor Statistics.

Social unrest is growing. Debt is ballooning. Political extremism is spreading.

For a wide swath of the population, the American dream is getting harder to even imagine, much less attain.

Second, Whitney believes the AI revolution is the primary force behind this American fracture.

AI adoption is advancing much faster than most people expected.

So, even as traditional white-collar roles and entire business models are getting gutted, new fortunes are also being built at a speed we have never seen before.

For example, the poster child for the AI revolution is chipmaking giant Nvidia (NVDA). Its stock has soared in recent years, and Nvidia was the first-ever public company to cross $4 trillion in market capitalization… and then shortly afterward, it crossed $5 trillion.

But what you might not know is that Stansberry Research, the publishing firm where Whitney hangs his hat, actually initiated coverage of Nvidia back in 2004 at a split-adjusted price of about $0.12 per share, listing it as their No. 1 buy.

Nvidia is up more than 150,000% from that initial coverage. And subscribers had multiple opportunities to buy in along the way, including right before it went on its recent tear.

The opportunities Whitney is spotting today could be just as powerful for your portfolio.

That’s why the final part of Whitney’s prediction is so important.

There is a way forward for everyday Americans, using AI in their investing instead of being afraid of it. He has helped build an AI-powered investing system specifically designed as a financial life raft for those folks willing to grab hold.

It’s called the N.E.W. System… short for “New Engine of Wealth.”

The system uses AI to crunch financial data on thousands of publicly traded companies and identify the stocks most likely to outperform. In back testing, the approach beat the S&P 500 Index, bonds, gold, and even Warren Buffett’s Berkshire Hathaway (BRK.B) over recent years.

We’ll examine each of these three ideas here today. But if you read nothing else, you should at least know Whitney’s core recommendation: Stop fearing AI, and start using it.

The American Ripping Point: A Tale of Two Economies

Whitney believes the United States has split into “Two Americas.” And this divide is reaching a “ripping point.”

By that, he means the gap between those who are thriving and those who are struggling has gotten so wide that it no longer feels like a gap. It feels like a tear.

On one side are people riding booming asset prices, cashing in on new technology, and watching their portfolios grow. On the other side are people dealing with stagnant wages, climbing costs, and a gnawing sense that they are falling behind for good.

Economists have a name for this pattern: The “K-shaped economy.”

Picture the letter K on a chart. One arm shoots upward. That is the segment of the population doing well – rising incomes, growing net worth, and expanding opportunity. The other arm falls downward. Those are the folks losing ground.

In fact, Moody’s Analytics found that the top 10% of the wealthiest Americans now account for roughly half of all consumer spending. And as the Fortune article went on to note, this is a big deal:

Morgan Stanley Wealth Management’s Lisa Shalett has increasingly been sounding the alarm from her perch as chief investment officer. She told Fortune in an October 2025 interview, “The income inequality stuff is really getting like completely wackadoo,” specifically citing Zandi’s research: “That means 90% of the country is only half the consumption, I mean holy cannoli.”

Now, Whitney says the K-shaped economy has started to rip. And one of the clearest signs is white-collar job losses.

We’ve been following the layoffs across white-collar industries for months now. Good jobs are already starting to disappear, and we are only at the very beginning of the layoff cycle. As we noted earlier this year, if you’re one of several million folks employed by a Big Tech company, your job is absolutely at risk.

We went on to add:

Of course, people are clever. We’ll create other interesting, human jobs in new industries. But it’s going to take time.

In [our previous] doom-loop article, we gave the example of the 50-year period during the early Industrial Revolution when GDP growth exploded, but workers’ wages stagnated for half a century. All the gains went to capital owners.

That could absolutely happen again today.

And if it does, it will be devastating for American workers, especially for anyone who currently sits at a desk.

Using data from the Bureau of Labor Statistics, Axios reports that core white-collar employment – sectors like finance, insurance, information, and professional services – has fallen for three straight years.

For context, from 2010 to 2019, these sectors added an average of 569,000 jobs a year. In the last three years, they’ve lost an average of 191,000 jobs a year.

These sectors account for more than 40% of U.S. GDP and 20% of U.S. employment.

When the economy is expanding, these jobs have historically grown in size. These were the “safe” jobs. The desk jobs parents told their kids to get. The ones that were supposed to be recession-proof. Today, they’re disappearing.

And much of the reason has to do with AI. As we wrote last fall, the AI layoffs will continue until morale improves:

Goldman Sachs says that AI can already replace 2.5% of the American workforce – that’s more than 4 million employees. And looking ahead, it expects as much as 14% of the current U.S. workforce could ultimately be at risk within the next five years.

That would be roughly 22 million Americans, suddenly out of work…

Already, social tensions are boiling over in America. What do you think will happen when millions more Americans find themselves jobless, thanks in large part to AI?

In addition, monetary policy is now squeezing the lower arm of the K even harder… Last week, the Federal Reserve raised its benchmark rate for the first time since July 2023. And most analysts expect more rate hikes to come.

Higher rates mean pricier mortgages, car loans, and credit-card balances for households already falling behind, even as asset owners in the upper K keep riding the AI boom.

America is living through a foundational shift. We stand at the beginning of a new era. But for that era to begin, the old era must end. And a huge portion of the population risks being left behind.

Whitney compares this moment to earlier transformative periods, like the advent of railroads or the arrival of electricity. These were times that reshaped society in a generation, exactly as AI is doing today.

The AI Revolution’s Winners and Losers

If Whitney’s ripping-point prediction describes what is happening to America today, then AI explains why it is happening so fast.

Whitney calls AI the most destructive and creative economic force of our lifetimes. And it certainly looks that way.

For some companies, AI has been a disaster.

In his interview, Whitney points to the example of Gartner (IT):

For 45 years, it has been one of the biggest consulting firms in the world and has thousands of staff worldwide. It’s the whitest of white-collar firms.

And yet, it took just months to wipe out HALF of its market value, including a 31% one-day plunge in February.

Companies that were once pillars of finance, analytics, and consulting have all gotten hit as investors realize AI can replicate some or much of what these firms do.

In finance and law, the early signs are already showing up. Junior analysts and attorneys face replacement by AI that drafts reports or contracts in seconds.

For example, Goldman Sachs’ CEO David Solomon noted last year that AI can now draft 95% of an IPO prospectus in minutes. That task once took a six-person team working on it for two weeks. In other words, some 480 hours of highly compensated human effort can now be done in maybe 20 minutes by AI.

Today, Goldman employs some 11,000 engineers, largely to push forward on AI initiatives.

Or take language-learning app Duolingo (DUOL). Whitney continues,

The language-learning app was once a darling of the AI world. In fact, its CEO publicly pushed an “AI-first” strategy.

But now?

It turns out any off-the-shelf AI system can do what Duolingo’s software does.

The stock collapsed 75% in less than a year.

Why pay a premium for a company whose competitive advantage just evaporated?

This goes far beyond a handful of companies.

If a business depends on information brokerage, routine data analysis, content creation, or any repeatable cognitive task, it is in trouble.

And if your job depends on something similar, that, too, is in trouble.

Amazon CEO Andy Jassy warned employees last summer that AI would reduce the corporate workforce “in the coming years.” Sure enough, a few months later, Amazon announced plans to fire some 30,000 white-collar office workers in two waves.

We reported at the time:

Amazon’s corporate layoff is an early sign of what’s coming to other large tech companies. Back in 2022, Amazon was also the first mover – laying off 27,000 over several months. It was quickly followed by dozens of other well-known tech companies, shedding tens of thousands of their own employees. Expect to see plenty more folks purged in the months ahead as tech companies refocus their spending from salaries to AI compute.

AI will ultimately replace millions of jobs. The current layoffs are only the beginning.

And when it starts happening in earnest, it won’t be a gradual change. It will be sudden.

After all, companies have already been cutting jobs despite solid economic growth to increase efficiencies and squeeze more output from fewer workers. The latest AI capabilities are just accelerating a trend already in motion.

Dario Amodei, CEO of AI leader Anthropic, has warned that business leaders may see the cost savings of AI and replace humans almost overnight.

Now flip the coin.

The same wave that is crushing some companies is sending other businesses into orbit.

Semiconductor firms that supply the chips and equipment AI runs on, like Micron Technology (MU) and Lam Research (LRCX), have seen their stocks soar.

And then there is Nvidia. Long before the stock was on most of Wall Street’s radar, Stansberry Research subscribers were tipped off to the role Nvidia would soon play in artificial intelligence.

Our analyst put it this way:

When machines begin learning for themselves, it will be a watershed moment in human history. And these “artificial brains” will bring huge profits to early investors.

And although Nvidia is a well-known tech company, nobody on Wall Street is betting on artificial brains as a business segment.

Sure enough, Nvidia shares have soared in the years since.

It isn’t just the chipmakers. The established tech giants keep leaning on AI to widen their lead. When Alphabet (GOOGL) and Meta Platforms (META) reported earnings this spring, both posted blowout numbers… even as they poured tens of billions more into AI. As Whitney noted:

Management is smart to spend however much it takes to win the AI race. Established companies like Alphabet, Meta, Amazon, and Microsoft (MSFT) can leverage AI to grow their dominant businesses.

What is happening in the market right now is a massive rotation of capital. Money is flowing out of firms threatened by AI, and into firms building or powering AI.

Whitney cites Massachusetts Institute of Technology research, noting that going back over 100 years of data, wealth has never been created at this size and speed. Think about that. Not during the dot-com boom. Not during the post-war industrial expansion. Not during the Roaring ’20s.

Yet most Americans are missing out.

Many investors never owned these stocks. Or they bailed out early when things got volatile. And the workers losing their jobs? They are probably not sharing in the stock market’s gains.

This feeds directly back into the K-shape economy we talked about earlier. The upper arm accelerates because of AI. The lower arm falls faster because of AI.

Same force, opposite outcomes.

Whitney puts it plainly in his interview, which you can watch for free by clicking here:

Imagine the progress of the entire 20th century compressed into a single decade. That’s what insiders say is happening now.

That kind of growth is almost impossible for the human brain to comprehend.

But think about it like this…

The world economy grew 19-fold in the 20th century.

If the economy grew at that pace in the next century, it would create hundreds of trillions of dollars in new wealth every year.

And it’s beginning, right now. You can feel it. The pace of change is picking up. The next six months will define everything.

Anthropic, valued at nearly $1 trillion earlier this year, confidentially filed its IPO prospectus in June and has been widely expected to list as soon as next month. Some investors have discussed a valuation approaching $2 trillion, which would rank it among the most highly valued companies ever to enter public markets.

OpenAI is going the other way. Altman said in a September 12 interview that “right now would be an ill-advised moment to go public,” and the company now targets 2027.

Either way, new fortunes are being built right now… exactly the wealth creation Whitney describes in his latest prediction.

That stark divide sets up Whitney’s third idea. How can regular investors get themselves on the right side and use AI for their own investing?

Harnessing AI for Investors With the New Engine of Wealth System

At the center of Whitney’s plan for regular investors is his firm’s AI-powered investing system: The N.E.W. System, short for “New Engine of Wealth.”

The core question it tries to answer: How can everyday investors come out ahead in an era dominated by AI and rapid disruption?

Here is how it works.

The N.E.W. System is an AI-driven, fully allocated model investment portfolio.

It’s the end product of more than a decade of research and development, involving dozens of coders, developers, and research staff – and costing millions of dollars.

It uses artificial intelligence to analyze financial data on more than 5,000 publicly traded companies. Then it identifies a mix of investments with the highest chance of delivering strong returns, while dodging the big losers.

Think of it as a “best of the best” portfolio assembled with more computing power and analytical rigor than most individual investors could manage alone.

Whitney’s team built it by feeding an AI vast amounts of data and running simulations. Trillions of possible outcomes. Different market conditions. Bull markets, crashes, sideways grinds. The AI searched for patterns and combinations of stocks that held up across all of them.

The result is a model investment portfolio that gets updated quarterly. And Whitney’s team vets every pick before it goes out to subscribers.

That last part matters. This is not a robot on autopilot. Whitney and a committee of human analysts review each recommendation – checking for statistical flukes, real-world factors the algorithm might miss, and anything that does not pass the common-sense test. Investors aren’t blindly following a computer.

Now, what about results?

Whitney shares a few examples of stocks the system flagged early. Nutex Health (NUTX) returned 1,100% in under a year. Robinhood Markets (HOOD) rallied 340%. AppLovin (APP) surged 2,500%.

Of course, nobody can guarantee future returns. But the back-tested track record is striking.

The strategy would have beaten the S&P 500, long-term Treasury bonds, gold, and even Berkshire Hathaway over recent years. And with lower volatility than chasing hot AI stocks on your own.

Today, AI is leveling the playing field for individual investors.

For decades, big Wall Street firms had enormous teams and expensive data tools that gave them a structural edge that regular folks simply couldn’t replicate. Whitney cites Renaissance Technologies’ Medallion Fund, widely considered the most successful hedge fund ever. It generated roughly 66% annual returns over decades. Their secret? Better data and better models than everyone else.

But today, advances in AI make serious analytical firepower accessible to smaller investors. That is the whole idea behind the N.E.W. System – packaging an elite-level analytical engine in a form regular people can use.

Subscribers also get access to a few key tools.

• The Stansberry Score is an AI-driven rating for thousands of stocks, showing how each one ranks against the system’s criteria. You can look up any stock and instantly see where it stands.

• StansberryGPT is a financial chatbot that answers plain-English questions from market data. It is like having a 24/7 analyst at your fingertips, minus the $20,000 Bloomberg terminal bill.

• And a year of access to the N.E.W. System, with Whitney’s latest recommendations of the strongest-rated companies to buy right now for the highest potential gains. Should you choose to invest, all you’ll need to do is type in your portfolio size, and his calculator will spit out exactly how many shares of each company to buy.

Today, you can use the same technology that is shaking everything up to invest smarter, avoid being blindsided by big market declines, and even find the next big winners before everyone else catches on.

Whitney puts it like this:

In short, we’ve taught our AI to find you the unique combination of stocks that is most likely to double or triple your money, with a level of confidence that has never been possible before.

And keep in mind, the N.E.W. System updates its model portfolio roughly four times a year, or as needed, based on market conditions. That means regular updates on what stocks to add, which to trim or sell, and the latest highest-potential new recommendations to add.

This frequency is intentional. It’s not a day-trading system that will bombard you with constant trades, but it’s also not a “set-and-forget for years” approach.

In short, the N.E.W. System offers a radically different, high-tech approach to stock investing – one that tilts the odds in your favor by using vast data and computing power.

Click here to go directly to the N.E.W. System order form to learn more details and get access to a special subscriber discount. (Please note, this link does not go to a long video.)

What Is Stansberry Research?

Stansberry Research is one of the largest and most respected independent financial research firms in the world.

Founded in 1999, the firm made its name by giving individual investors access to the kind of in-depth research and contrarian ideas often reserved for Wall Street insiders. Today, Stansberry Research is a cornerstone of the financial publishing industry.

The firm has subscribers all around the globe. And its publications are read by hundreds of thousands of folks.

A key differentiator is that, unlike big banks or brokers, Stansberry doesn’t manage money or earn commissions on trades. They strictly publish research and investment recommendations. And they are known for sometimes taking bold, unpopular stances that later proved prescient.

For example, Stansberry Research analysts warned about the housing bubble and the impending collapse of Fannie Mae and Freddie Mac before the 2008 crisis, saving attentive subscribers from huge losses. They were early in predicting the rebound of oil and natural gas in the mid-2010s. And they even covered burgeoning trends like bitcoin as far back as 2017.

Over the years, Stansberry’s various services have logged dozens of triple-digit winners and a handful of 1,000%-plus gainers.

Of course, no firm gets every call right. That’s why Stansberry Research analysts also regularly acknowledge their mistakes – including in an annual “Report Card” where the publisher grades each publication, no holds barred. Their mission is to put the kind of research and tools that used to be reserved for Wall Street insiders into the hands of regular investors. The company employs experts on macroeconomics, commodities, biotech, insurance stocks, and much more… and now, an AI system is working for you, too.

Who Is Whitney Tilson?

Whitney Tilson is a familiar name in investing circles… and beyond. His career spans hedge funds, research publishing, philanthropy, and even a run at New York City politics. Understanding his background helps explain why people take his “ripping point” warning seriously.

The short version…

Whitney graduated from Harvard College and Harvard Business School, where he finished in the top 5% of his class and was named a Baker Scholar. In 1999, he co-founded what became Kase Capital Management. He started with $1 million and ran the whole thing from a folding Ikea desk in the corner of his bedroom. Over the next dozen or so years, he grew his fund to more than $200 million in assets and nearly tripled his investors’ money.

That stretch included the dot-com crash, the 2008 financial crisis, and a flat-to-brutal market for long stretches. Steering a fund through all of that and coming out well ahead was no small feat.

He also earned a reputation for calling big turns in the market.

• During the depths of the financial crisis, he went on 60 Minutes and argued it was a once-in-a-lifetime buying opportunity for stocks. At the time, fear was rampant. But he was right – it marked the bottom… And the ensuing bull market became the longest in history.

• In 2015, he again appeared on 60 Minutes to expose fraud at a company named Lumber Liquidators, which was found to be selling toxic Chinese-made laminate flooring. Following that, the stock plummeted 80%, and the CEO resigned. Whitney’s actions potentially saved consumers and investors from a disastrous situation.

• He predicted the exact market bottom in March 2020 during the COVID-19 crash. Anyone who listened would have caught the huge rebound that followed.

These and other calls earned him that “Prophet” nickname from CNBC.

Over his career, Whitney rubbed elbows with some of the greats – even baking cookies for the legendary investor Warren Buffett every Christmas. Whitney also counts hedge-fund legends like Bill Ackman, Joel Greenblatt, David Einhorn, and Seth Klarman among his circle.

After leaving the hedge fund world, Whitney moved into investment research and education and now heads up a team of analysts at Stansberry Research. He brings a rare combination to the table: proven investment skill, connections with legendary investors, and a down-to-earth teaching mentality.

Whitney has published four books, including The Art of Value Investing. He has traveled to Ukraine multiple times during the war to deliver aid. He helped launch the nonprofit Teach For America as a founding member. He even ran for mayor of New York City.

You can probably tell that Whitney isn’t a doom-and-gloom kind of guy. So when he turns urgent, as he has with his “ripping point” warning in his latest documentary, it’s worth paying attention.

Frequently Asked Questions

Question: What does Whitney mean by “ripping point”?

Answer: “Ripping point” is Whitney’s term for when America’s economic and social fabric tears apart under extreme pressure from technology and wealth inequality.

Think of it as a more violent version of a tipping point – a rapid, visible split between those getting richer and those getting left behind. This gap is now showing up in political polarization, consumer debt, career anxiety… You name it. And in Whitney’s view, AI is speeding this up from a slow divergence into something much more abrupt.

Question: Why is Whitney’s ripping-point prediction causing panic among white-collar workers?

Answer: White-collar professionals have historically been largely shielded from automation. A college degree and an office job meant stability, but AI is changing that assumption.

For example, as we wrote about Elon Musk’s “Macrohard” AI system:

Soon, you may have an “always-on” AI at your desk, watching what you do, and learning to do it without you.

That sounds dystopian… or maybe just far-fetched.

But it has happened before with American workers training their offshore replacements in the late 1990s… That trend sped up following the dot-com crash in the early 2000s as companies faced intense pressure to survive by cutting costs. This time, instead of being replaced with a cheaper worker in a foreign country, it’s an AI in the cloud

As AI costs go up and AI gets smarter, human headcounts come down. And if you’re one of the millions of folks employed in a white-collar office setting, your job is likely more at risk than you would have ever expected.

Question: Haven’t we faced disruptions from technology before?

Answer: We absolutely have. Mechanization gutted farming jobs early in the 20th century. Robots changed manufacturing late in the 20th century. Each time, new job categories eventually appeared.

Two things stand out about AI, though:

• First, the scope. AI can hit many industries and many types of cognitive work at once – legal research, marketing copy, financial analysis, and software code. It’s not limited to one sector.

• Second is the speed. AI models improve on a timeline of months, not decades. And the newest tools are accelerating a trend already in motion.

So, whether Whitney’s comparison of compressing 100 years into a single decade holds up perfectly, the pace is genuinely unlike anything in recent memory.

Question: How does the N.E.W. System work?

Answer: The New Engine of Wealth (N.E.W.) System uses machine learning to comb through years of market data – stock prices, financial statements, and economic indicators. It looks for patterns that predict strong performance.

It runs trillions of simulations to find combinations of stocks that hold up well across different conditions. From that analysis, it builds a model portfolio of 10 to 20 stocks, updated quarterly.

Of course, Whitney and his analyst team review every pick before sending it to subscribers. So there is a human check on the algorithm’s output. Subscribers also get access to the Stansberry Score, which rates thousands of stocks on demand, and StansberryGPT, a financial chatbot that answers plain-English questions from market data.

The idea is to give regular investors the kind of analytical firepower that used to live behind locked doors on Wall Street. You can learn more about the N.E.W. System by watching Whitney’s full interview here.

Question: If the system works so well, why share it?

Answer: Fair question. Whitney has addressed it directly. Part of his answer is personal. He has already run a hedge fund and made his money on Wall Street. At this point in his career, he says he is more motivated by teaching and helping individual investors.

In addition, Stansberry Research is in the business of selling research, not managing money. By creating a product like the N.E.W. System, they can attract subscribers willing to pay for high-quality insights. In a sense, scaling it to thousands of subscribers is more lucrative for them than trying to quietly run a small fund with it.

Finally, both Whitney and Stansberry Research have built a reputation on delivering big ideas to readers. This is, in a way, their next big idea to retain and grow that audience.

Question: Is the system all tech stocks?

Answer: Nope. The recommendations look diverse, based on what Whitney has shared publicly. His examples include a health care small-cap. A fintech firm. An ad-tech company. An industrial manufacturer. A biotech. A gold-related firm. A defense-parts maker.

The AI searches across every sector for the best risk-reward opportunities. That could mean a boring industrial stock sitting right next to a high-growth tech name. The system also steers users away from popular-but-overpriced names if the data does not support additional upside.

Question: Can an average investor use Whitney’s N.E.W. System?

Answer: Absolutely. It was designed with everyday investors in mind. The system outputs a model portfolio with ticker symbols and allocation percentages. It even has an online calculator. Enter how much you want to invest, and it computes how many dollars to put in each stock. You would make trades a few times a year to rotate into new picks or adjust your positions. No advanced tech skills required.

If you can read a report and place a trade in your brokerage account, you can follow it. Whitney’s team also provides a Quick Start Guide, monthly updates, and customer support. You can find more details on the order form. (This link does not go to a long video.)

How an Investor Can Profit From Whitney’s Ripping-Point Prediction

We could soon be blindsided by a permanent change in our economy…

America’s “ripping point” will be far more wide-reaching than a stock market crash or banking collapse. It has the potential to split our entire financial system in two.

But buried in that chaos is an opportunity to do incredible things with your money.

That’s why Whitney has gone public with his warning today.

Whether you choose to watch Whitney’s documentary on the N.E.W. System, the takeaway is clear: AI is transforming investing. It’s showing us ways to beat stocks, gold, bonds, real estate – and even potentially outperform the great Warren Buffett.

And keep in mind: AI is only going to get stronger (and smarter) from here.

So, even if you don’t see a threat from AI right now, that doesn’t mean it won’t be here tomorrow.

As Whitney predicts:

Today’s AI is the dumbest it’ll ever be. It’s getting smarter at an exponential rate. In fact, AI’s capability has doubled roughly every seven months for the past six years.

It gets smarter and more powerful with every passing day.

You can’t fight it.

None of us can.

But you can use it to grow wealthy – by making sure AI works for you, not against.

Learn more by watching Whitney’s full interview… including the names and tickers of one stock to sell immediately and one “hidden AI play” to buy right now.

And of course, Whitney is offering a full 30-day money-back guarantee for all new subscribers. So you can give his research a try without worrying about a long-term commitment today.

If you’re ready to subscribe, you can go straight to the order form without watching a long video by clicking here.

The post Why Is Whitney Tilson’s ‘Ripping Point’ Prediction Terrifying White-Collar Americans? appeared first on MarketWise.

Everyone is trying to figure out how to own artificial intelligence without owning the froth. After a two-year sprint in chips and data-center names, “How do I hedge the AI bubble?” has become one of the most asked questions in investing.

I spent 28 years on the trading floors at the CBOE and CME before building Masters in Trading, and one lesson from the pits never changes: when everyone crowds the same trade, you look for the adjacent one nobody’s fighting over. Right now, that trade is cybersecurity stocks.

Here’s the logic, and it isn’t complicated. AI is a double-edged sword. The same technology racing through corporate America is also arming attackers, enabling faster, cheaper, autonomous attacks at a scale we’ve never seen. That means security stops being a “nice-to-have” line item and becomes a bill companies cannot stop paying. Cyber vendors get paid whether AI succeeds spectacularly or blows up in someone’s face. Both outcomes create threats. Both require defense.

We got a live preview of this rotation on Monday, September 14, the day the chip names sold off on fresh AI-risk warnings — with Nvidia down nearly 3% and the VanEck Semiconductor ETF (SMH) off 4.4% — the pure-play cybersecurity names had their best session in years. CrowdStrike hit a record high. Zscaler and SentinelOne jumped double digits. The market wasn’t fleeing AI. It was repricing who benefits from it.

Below are the 15 best cybersecurity stocks to buy now, each positioned to ride that shift and grouped by the role it plays in a portfolio.

How Big Is the Cybersecurity Market in 2026?

Before we look at the names, consider these numbers — because the size of this market is the whole thesis.

Gartner projects global information security spending will hit roughly $249 billion in 2026, up nearly 13% year over year, on track for about $373 billion by 2030. That’s up from just $193 billion in 2024 — a ~29% jump in two years, at a time when most enterprise software budgets are getting squeezed.

Add in security services, and Cybersecurity Ventures pegs the broader market above $520 billion. A Morgan Stanley survey of CIOs found cybersecurity budgets are expected to grow roughly 50% faster than overall software spending.

The fastest-growing slice of the entire market is a category that barely existed 18 months ago: “securing AI” — projected to overtake endpoint protection as the single largest security category by 2029.

Translation: this isn’t a headline-of-the-week trade. It’s a multi-year, structurally funded spending supercycle. Now onto the stocks.

Want to see how I’m trading this theme in real time? I break down setups like these — with live entries, exits, and risk levels — every weekday at 11 a.m. ET on MiT Live.

 The 15 Best Cybersecurity Stocks at a Glance

Stock	What it does	Est. rev. growth	Valuation	Analyst view
CrowdStrike (CRWD)	Endpoint / XDR	~26%	Premium	Strong Buy
Palo Alto (PANW)	Platform / identity	~25%	Above avg.	Buy
Fortinet (FTNT)	Network / firewall	~20%	Value	Buy / Hold
Zscaler (ZS)	Zero Trust / SASE	~24%	Moderate	Buy
Microsoft (MSFT)	Bundled security giant	Diversified	Moderate	Strong Buy
SentinelOne (S)	AI-native endpoint	~23%	Value	Buy
Okta (OKTA)	Identity & access	~11%	Value	Moderate Buy
Rubrik (RBRK)	Cyber resilience	~48%	Moderate	Buy
Cloudflare (NET)	Edge / AI infra	~36%	Premium	Hold / Buy
Check Point (CHKP)	Firewall / SASE	~7%	Value	Hold
Qualys (QLYS)	Vuln. mgmt.	~9%	Moderate	Hold
Varonis (VRNS)	Data security / DSPM	~9%*	Moderate	Buy
Tenable (TENB)	Exposure mgmt.	~11%	Value	Buy
Rapid7 (RPD)	Vuln. mgmt. / SecOps	~flat	Value	Hold
Gen Digital (GEN)	Consumer security	~4%	Value	Hold

The Rose Take: Where I Would (and Wouldn’t) Put New Money

After 28 years reading order flow, I’ve learned the best company and the best stock aren’t always the same thing. Here’s how I’d rank them:

• Best business, hands down — CrowdStrike (CRWD). Nothing else in the group has its brand, retention, or platform breadth. The only knock is the price: it’s trading near Wall Street’s most bullish targets, so you’re buying perfection.
• My No. 1 pick for new money — Palo Alto (PANW). It has the scale of CrowdStrike, faster-improving platform economics, a brand-new identity engine from the CyberArk deal, and it still trades at a discount to CRWD. It’s the best risk-adjusted way to own the theme.
• Boldest high-upside bet — SentinelOne (S). The cheapest of the leaders, growing more than 20%, with real takeover optionality. If it keeps closing the gap with CrowdStrike, it has the most torque on the list.
• Handle with care — Cloudflare (NET) and CrowdStrike (CRWD). Two of the best stories in tech, at two of the richest multiples. I’d rather wait for a pullback than chase them here.
• The one I wouldn’t chase — Rapid7 (RPD). Revenue is essentially flat. It’s a turnaround-and-takeover bet, not a growth story — treat it that way.

The Blue-Chip Generals: Best Cybersecurity Stocks for Core Exposure

Large-cap, profitable platforms. They offer core exposure to the theme , and they’re the names institutions buy first.

1. CrowdStrike (CRWD)

The category gold standard. Its Falcon platform is the purest expression of the “AI threat means more security spend” trade, and management now openly calls the company “AI security infrastructure.” Net new annual recurring revenue grew more than 50% year over year in its most recent quarter, its new AI-detection product is scaling fast, and gross retention sits near 97% — a sign customers simply don’t leave. The catch: it’s the most expensive name in the group, and after a 4-for-1 split this summer, it’s already trading near Wall Street’s most bullish price targets. You’re paying up for the best.

2. Palo Alto Networks (PANW)

The consolidation play. While rivals sell point products, Palo Alto is pitching enterprises on running their entire security stack through one vendor — and it’s working, with next-generation security ARR above $9 billion and growing north of 30%. Its roughly $25 billion acquisition of CyberArk, which closed earlier this year, bolts on a dedicated identity pillar right as AI agents make machine identity a top priority. The catch: growth is decelerating off a huge base, and the stock has already had a monster year.

3. Fortinet (FTNT)

The value general. Fortinet owns better than half the global firewall market, differentiates with its own custom silicon, and — critically — is consistently profitable. It typically screens as the cheapest of the mega-cap pure plays, which makes it the “sleep at night” name in the group. The catch: it carries more hardware exposure than the pure cloud names, so its growth is steadier but slower.

4. Zscaler (ZS)

The zero-trust leader. Zscaler replaced the old perimeter-firewall model with cloud-native traffic inspection, and it’s leaning hard into securing agentic AI as its next growth leg, with ARR growing around 25% to nearly $4 billion. It often trades at a meaningful discount to CrowdStrike on forward earnings. The catch: the market punishes any hint of a growth slowdown here — recent guidance wobbles have triggered sharp drops.

5. Microsoft (MSFT)

The elephant nobody counts as a “cyber stock.” Microsoft has quietly built a security business worth roughly $37 billion — larger than CrowdStrike, Palo Alto, and Zscaler combined — and bundles it into enterprise agreements customers already sign. You won’t get pure-play torque, but you get the most defensible distribution in the entire industry with a fraction of the single-name risk. The catch: security is a rounding error in Microsoft’s overall story, so it won’t move the stock on its own.

The High-Growth Disruptors: AI Cybersecurity Stocks With the Most Upside

More torque, more risk. These are the challengers and turnarounds with the most upside if they execute.

6. SentinelOne (S)

The direct CrowdStrike challenger. Its AI-native Singularity platform and Purple AI tools are built exactly for the autonomous-threat era, ARR has crossed $1 billion, and it’s the cheapest of the leaders on a price-to-sales basis — trading around 3.5x forward revenue versus far richer peers. It’s also a perennial takeover candidate. That combination gives it the most torque on the list. The catch: it’s still proving durable profitability and faces the risk of being out-muscled by the platform giants.

7. Okta (OKTA)

The identity turnaround. Identity is the front door to every network — and with AI agents multiplying, every one of them needs an identity to manage. Okta is the leader in that lane and has been climbing steadily back after years in the wilderness. The catch: the platform giants are bundling identity too, so Okta has to keep proving it’s the better standalone tool.

8. Rubrik (RBRK)

The “after the breach” play. While most names focus on preventing attacks, Rubrik focuses on cyber resilience — clean, fast recovery after ransomware hits. That’s a fundamentally different exposure, and a critical one, since no defense is perfect. It’s been one of the stronger performers among the newer public names. The catch: it’s a younger, higher-volatility stock still scaling toward consistent profitability.

9. Cloudflare (NET)

The AI-infrastructure hybrid. Cloudflare isn’t a pure cybersecurity play — it sits at the intersection of edge computing, AI infrastructure, and security, growing revenue nearly 30%. For investors who want the AI build-out and the security angle in one ticker, it’s a rare two-for-one. The catch: that breadth means it competes on multiple fronts, and it trades at a premium valuation.

The Under-the-Radar Value & Niche Cybersecurity Stocks

Cheaper, specialized, less-crowded corners of the space — where the asymmetric setups often hide.

10. Check Point Software (CHKP)

The steady compounder. Check Point rarely grabs headlines, but it delivers consistent margins and cash flow while quietly building out its cloud and zero-trust offerings. It’s the low-drama way to own the theme.

11. Qualys (QLYS)

The profitable niche leader in cloud-based vulnerability scanning and compliance — the unglamorous plumbing that every regulated enterprise has to buy.

12. Varonis (VRNS)

A direct “securing AI” play hiding in plain sight. Varonis discovers, classifies, and monitors sensitive data and catches insider threats — exactly the problem that explodes when companies point AI models at their internal data. Its shift to a SaaS model is gaining traction.

13. Tenable (TENB)

The exposure-management specialist. Tenable helps organizations find what’s actually exploitable before attackers do — a discipline that only grows in importance as AI accelerates vulnerability discovery on the offensive side.

14. Rapid7 (RPD)

The small-cap wildcard. Same vulnerability-management and security-operations lane as the bigger names, but at a fraction of the market cap — which means more torque on any sector re-rating, and more risk if execution slips.

15. Gen Digital (GEN)

The consumer angle. The owner of Norton and Avast is the steadier, income-oriented way to play cybersecurity — protecting individuals rather than enterprises, with a profile closer to a cash-flow compounder than a hyper-growth bet.

Bonus: 3 Cybersecurity ETFs for One-Click Exposure

Not sure which horse to back? Own the whole field. These three ETFs give you diversified exposure without single-name blowup risk:

• First Trust NASDAQ Cybersecurity ETF (CIBR) — the largest and most liquid, weighted toward Palo Alto, CrowdStrike, and Fortinet. It’s pulled in roughly $1.5 billion of net inflows over the past year, so it’s where sector money shows up first.
• Amplify Cybersecurity ETF (HACK) — the original cyber ETF, with a similar large-cap tilt.
• Global X Cybersecurity ETF (BUG) — a cleaner pure-play tilt with less legacy-tech overlap.

The Bottom Line on the Cybersecurity Play

Cybersecurity is one of the only enterprise budgets still expanding through an uncertain economy — and AI is pouring fuel on it from both sides. That’s the definition of a durable trade.

A few rules to play it well. Treat the tiers as roles, not rankings — the generals for core exposure, the disruptors for torque, the niche names for less-crowded setups, and the ETFs when you’d rather own the theme than pick a winner. Watch net new ARR at every earnings report; it’s the one number that separates a real spending shift from a headline pop. And remember that after a big move like Monday’s, headlines fade but bookings don’t — the names that hold their gains are the ones with the recurring revenue to back it up.

The AI era needs defending. These are the companies getting paid to do it.

Editor’s Note: What ever happened to the AI stock boom? Even AI darlings like Nvidia have essentially gone nowhere since summer 2025. Our friend and colleague at InvestorPlace, Louis Navellier, may have the answer. According to Louis, the AI industry is quietly “staging” ahead of the next great AI breakthrough… a new class of AI he calls “Superintelligence… but better.” How will it trigger a $100 trillion reset of the AI markets. How will the launch of this tech send some stocks to zero, and others soaring? And why does Louis say: Don’t buy or sell an AI stock in 2026 until you see what’s coming next? Go here for the full story (and Louis’ #1 pick).  

Cybersecurity Stocks FAQ

What is the best cybersecurity stock to buy in 2026?

There’s no single answer for every investor, but the strongest candidates are CrowdStrike for quality, Palo Alto for the best balance of growth and value, and SentinelOne for the most upside if you can stomach the risk. Match the name to your risk tolerance, not the other way around.

Are cybersecurity stocks a good hedge against an AI bubble?

They’re one of the more logical ways to stay exposed to AI without betting purely on the chip and data-center trade. Security spending is largely non-discretionary and rises whether AI adoption succeeds or produces new threats — so the group can hold up even if AI enthusiasm cools.

What is the best cybersecurity ETF?

The First Trust NASDAQ Cybersecurity ETF (CIBR) is the largest and most liquid, making it the default choice for diversified exposure. Amplify’s HACK and Global X’s BUG are smaller alternatives with slightly different holdings.

How is AI changing the cybersecurity industry?

AI is arming attackers with faster, cheaper, autonomous attacks — and forcing defenders to buy AI-powered tools to keep up. Gartner now tracks “securing AI” as its fastest-growing category, projected to become the single largest area of security spending by 2029.

CrowdStrike vs. Palo Alto — which is the better stock?

CrowdStrike is the higher-quality, faster-compounding business; Palo Alto is the broader platform at a more reasonable valuation. For new money at current prices, Palo Alto arguably offers the better risk-reward — but both belong on a serious watchlist.

Trade This Theme With Me – Live, Every Morning

A watchlist is a starting point. Turning it into actual trades — knowing when to get in, where to set risk, and when to walk away — is the hard part, and it’s what I do out loud every single day.

Join me on MiT Live, weekdays at 11 a.m. ET. I go live to break down the market’s biggest themes and the specific setups I’m watching in real time — cybersecurity, AI, and wherever the money is rotating next. It’s free, it’s unscripted, and it’s where lists like this one turn into real trade plans. Drawing on 28 years as a CBOE and CME floor trader, I’ll show you exactly how I’m thinking through these moves as they happen.

Watch live at youtube.com/@LiveOptionsWithJR — hit subscribe and set a reminder so you never miss the 11 a.m. open.

About the author

Jonathan Rose is a 28-year veteran trader who spent his career as a market maker on the Chicago Board Options Exchange (CBOE) and a floor trader at the CME and CBOT. He is the founder of Masters in Trading, where he teaches options and shares live trades and market themes every weekday at 11 a.m. ET on MiT Live. His focus is helping everyday investors think about risk and opportunity the way professional traders do.

The post The 15 Best Cybersecurity Stocks to Buy Whether AI Booms or Busts appeared first on MarketWise.

Today’s issue in preview:

• You’re crazy if you think AI development will slow down. Stay bullish.

• How to profit from the surge in “AI is dangerous” concerns

• Donald Trump turned these stocks into money machines

• Learn our Top Themes to buy now

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You’re crazy if you think AI development will slow down. Stay bullish

Credit: Just_Super

To slow down or not to slow down?

Over the past week, this has become the biggest unanswered question in the entire investment world. The answer could have large effects on your portfolio.

Many AI insiders are seeing the blistering pace of AI advancement and saying it should be slowed. They say a slower rate of progress would give technologists more time to build safeguards such as restricting what AI agents can do, limiting what data they can access, and thorough testing to gauge their capabilities. Over the past week, this subject has exploded across mainstream media and social media alike.

However, some “AI maximalists” say slowing down development would cede America’s AI lead to China. They also say some AI leaders, such as Anthropic’s Dario Amodei, are not 100% sincere in their calls for oversight.

Dario’s critics say he is advocating regulation not out of altruism, but to kneecap competitors through new rules and laws. They say Anthropic has reached a rarified level of AI capability and wants to “pull up the ladder” to prevent other firms from reaching its level.

Sincere or not, the “deceleration” calls from Dario and other AI insiders are producing losses in many AI-related stocks today. Investors are worried that slowing the pace of AI development will ultimately depress the revenues and profits of companies that manufacture critical AI data center hardware, such as semiconductors, data networking equipment, and cooling systems.

We believe all this fuss is overblown relative to both current and future reality.

The development of a revolutionary technology like AI, which is extraordinarily valuable from both commercial and geopolitical standpoints, is a relentless force that works 24 hours a day, 365 days a year. It does not take holidays. It does not sleep. It can be temporarily slowed a little but not stopped. And development of this revolutionary technology is global.

American tech executives and politicians can regulate domestic AI development, but they cannot regulate its development in China, Russia, India, or dozens of other countries. They cannot effectively regulate open-source AI all over the world.

Heavily regulating U.S. firms OpenAI and Anthropic (called “Frontier Labs”) would be like slowing down traffic in one lane of a six-lane highway. Everybody is still getting to their destinations. The prize of advanced AI is so large that it will be pursued, no matter what.

Plus, consider the U.S. government’s position. It rightly sees itself in a massive geopolitical and economic “great power” competition with China. AI supremacy is hugely value in this competition. It would be lunacy to slow AI development to the point that we essentially hand China a big victory. Governments are among the dumbest entities on the planet, but they aren’t that dumb.

Given all this, we believe the current fuss over AI development will prove to be a tiny speed bump on the long road of breakneck AI advancement and proliferation.

During times like this, it is important to keep the big-picture view in mind. Keep AI’s potential TAM – or Total Addressable Market – in mind.

And let’s ask ourselves, “How big is the market for super intelligence?”

How much demand is there globally for instant access to super genius doctors, super genius lawyers, super genius software developers, super genius financial advisors, super genius engineers, super genius marketers, super genius accountants, and so on?

When entrepreneurs and business executives try to generate interest in their companies, they often cite the size of their TAM.

When it comes to TAM, bigger is better. A typical investor gets more excited about investing in a company with a $200 billion TAM than one with a $5 billion TAM.

You’re going to serve the $250+ billion U.S. beverage market? Great. Big TAM.

You’re going to serve the Asian grocery market in Burlington, Vermont? Not so great. Small TAM.

So, what is the TAM for super intelligence, aka AI?

Since a large portion of the $126 trillion annual global GDP consists of paying lots of money to elite lawyers, consultants, executives, project managers, doctors, software engineers, financial advisors, accountants, and business analysts, I’m comfortable saying the TAM for super intelligence over the next decade is north of $100 trillion.

We are talking about a colossal TAM.

We’re talking about a technology that will yield many of the largest financial “jackpots” in the history of capitalism… while bestowing some governments with awesome geopolitical power.

For practical purposes, we can say the demand for superintelligence is so vast that it is essentially infinite.

This is what the world’s smartest, most informed, and wealthiest technologists know… which is why they are in a great race to build the world’s most useful AI infrastructure and programs. It’s why they are conducting the largest collective investment effort in history.

When you boil away all the fluff, bluster, and extraneous details from the AI discussion, what we are left with is the core, foundational issue…

A world of advanced AI is a world of abundant, ubiquitous superintelligence. Since applied intelligence is the engine of innovation and human progress, the demand – the TAM – for superintelligence across all industries and countries is essentially infinite.

Ownership of the world’s most useful, most valuable AI programs and applications will be among the greatest financial prizes in all recorded history. They will be among the greatest prizes of government in all recorded history.

The current fuss over the speed of AI development will not prevent people all over the world from reaching for these prizes. The historic level of AI infrastructure spending will continue… and will generate significant financial opportunities along the way.

How to profit from the surge in “AI is dangerous” concerns

Credit: imaginima

Part of the current fuss over AI development (detailed above) stems from recent and former Anthropic employees airing concerns that AI “could kill us all.”

They have shared precious few details on exactly how AI would do that, but presumably, they have some movie scenarios in mind, such as a “bad” AI taking over nuclear missile launches, developing a killer virus, or taking over transportation systems and causing catastrophic accidents.

Whatever the vector is, the public is now sufficiently spooked over AI. Political leaders are spooked over AI. And business leaders are spooked over AI.

This is all bullish for the cybersecurity business.

And it should continue to make our AI cybersecurity call a winner.

Back in March, we detailed how the “Agent Supernova” was set to create huge amounts of new cybersecurity threats across banking, transportation, healthcare, manufacturing, and corporate secrets.

Agent Supernova is our name for the megatrend of AI-powered “agents” working throughout the global economy.

Years of development have made AI advanced enough to perform many everyday tasks people do now… and the list keeps growing. Over the next 12–24 months, AI agents will help manage factories, perform financial analysis, manage inventories, write software, design websites, create legal documents… and thousands of other tasks.

Within two years, the number of AI agents operating in the American economy isn’t poised to increase by 10X… or 50X… or even 1,000X. Try at least 10,000X.

This is the coming Agent Supernova: agents working with people, agents working with other agents, agents running businesses, and negotiating with other agents.

The Agent Supernova is about to introduce billions of “AI workers” into our economy with very little day‑to‑day human oversight. The business and investment implications are huge. It will transform many businesses and industries, end many as we know them, and create entirely new ones.

In our original research note, we detailed how this megatrend would also create huge amounts of new cybersecurity risks. If we’re going to have millions of AI agents performing billions of daily tasks in health care, education, energy, transportation, manufacturing, and technology, then we’re going to have billions of points of cybercrime vulnerability. And remember, crooks get to use AI too.

If agents can roam the web, communicate for you, log in to your apps, move money, and modify data at machine speed, then a compromised agent can do the same damage just as fast – now with far less human oversight to catch mistakes or intrusions. We stated this is why well-positioned cybersecurity companies are poised to enjoy years of booming business.

At the time, we highlighted CrowdStrike (CRWD), Palo Alto Networks (PANW), Zscaler (ZS), SailPoint (SAIL), and Radware (RDWR) as “picks to click” in this trend. This basket is up an average of 58% in six months.

At the time of our note, cybersecurity stocks – a special type of software stock – had suffered a sharp decline due to investor concerns that AI would disrupt software.

Soon after our note, cybersecurity stocks staged a huge rebound as investors began to believe AI wouldn’t disrupt the business as much as they had thought. This rally has sent leaders CrowdStrike and Palo Alto up more than 100% from their bottoms. This sector’s big drop and subsequent huge rise have given rollercoasters a run for their money.

AI is the most exciting and potentially transformational technology of our time. The high-profile concerns aired by AI insiders over the past week are an indication that it’s also probably the most dangerous. That is driving a bull market in cybersecurity stocks. Given the fuss of the past week, it’s no coincidence cybersecurity leader CrowdStrike jumped 12% this morning to reach a new all-time high.

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Donald Trump turned these stocks into money machines

Credit: dan_prat

Over the past 12 months, the mainstream media has had a heyday reporting on conflicts between President Donald Trump and Canadian Prime Minister Mark Carney.

Unfortunately, Canadians have been subjected to Trump’s frequent taunting and trade war tariffs. More than a few Canadians have recently used four-letter words to refer to Trump.

However, shareholders of Canada’s “national champion” oil and gas firms should consider sending Trump a nice thank you gift. His war in Iran is generating extraordinary returns for companies such as Suncor Energy (SU), Cenovus Energy (CVE), and Canadian Natural Resources (CNQ).

All three firms are benefitting from soaring oil prices. All three are enjoying booming revenues and profits. All three recently registered all-time highs. The Iran War is a substantial driver of it all.

Money & Megatrends readers in good standing are familiar with our bullish stance on Canada. It’s been one of our highest-conviction themes over the past year. We’ve published over a dozen research notes on the idea.

Over the past 12 months, I’ve made the case that we are in a favorable environment for critical resources… one in which many individual resource sectors will generate strong returns.

Critical resources are the building blocks of the economy. Think raw materials like crude oil, natural gas, iron ore, copper, uranium, corn, and cotton.

Even today’s high-tech world of AI, apps, email, and Zoom calls is built on a “low-tech” foundation of steel, concrete, copper, lumber, and aluminum. Every day, our cars, trucks, and airplanes consume millions of barrels of fuel. Our lights turn on because we burn coal and natural gas.

Mining, extracting, planting, harvesting, processing, refining, and transporting critical resources is a multi-trillion-dollar business that affects every area of your life.

During this time, I’ve frequently highlighted Canada as an excellent place for investment capital. Canada is the second-largest country in the world by total area, after Russia.

This means there’s plenty of area to hold big oil and natural gas deposits… huge tracts of timberland… giant mineral deposits… and enormous farms. Canada is a major player in oil and natural gas production, ranking in the world’s top five producers for both. It’s also a world leader in the production of fertilizer, uranium, aluminum, wheat, gold, lumber, and platinum.

Canada’s massive resource endowment also makes it a beneficiary of the war in Iran and its consequences.

As I’ve covered this year, for many countries and businesses, the Iran War is a powerful reminder: If your survival or smooth operation depends on uninterrupted resource flows from the often-unstable Middle East, you are in a dangerous, vulnerable position.

No politician, CEO, or major shareholder wants their business to be in that position. No citizen wants their country to be in that position. Many powerful and influential people are realizing this is a big risk that must be mitigated if humanly possible. Executives and politicians will get fired for not addressing it effectively.

This means building and buying as many forms of “not Middle Eastern” resource supply chains as possible economically… like those from safe, resource-rich Canada. I can state with confidence that no caribou will ever strap on an explosive vest and attack a local oil refinery… and no grizzly bear will send a kamikaze drone flying into a natural gas pipeline.

But don’t take my word on this trend. Take the market’s word.

It enthusiastically supports owning high-quality Canadian resource assets.

Canadian Natural Resources, Cenovus Energy, and Suncor Energy are essentially “national champions” of Canada. Together, they produce a huge portion of the country’s oil and gas. Much of this production comes from the country’s vast oil sands deposits. And together, their market values are soaring. Their stocks have gained 73%, 108%, and 75%, respectively, over the past 12 months. A large portion of these gains are attributable to the Iran War and its uplifting of global oil prices.

Canadian stocks had strong tailwinds before the Iran War. They will have even stronger tailwinds after it. We are still bullish on Canada.

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Market Notes

• Our recommendation to get long oil and gas stocks continues to pay off. Oil giants Chevron (CVX), ConocoPhillips (COP), Permian Resources (PR) and Shell (SHEL) hit new highs today.

• LNG shipping leaders are hitting new highs. Frontline (FRO), Teekay Tankers (TNK), Dorian LPG (LPG) and Nordic American Tankers (NAT) just hit a new highs.

• Cruise line giants Norwegian Cruise Line Holdings (NCLH) and Carnival Corp (CCL) reached new one-year lows today.

• The high-profile eVOTL firm Joby Aviation (JOBY) reached a one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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Today’s issue in preview:

• A unique inflation hedge you’ve probably never considered

• This Bitcoin catalyst could trigger soon and send it past $100,000

• Learn our Top Themes to buy now

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A unique inflation hedge you’ve probably never considered

Credit: f9photos

For anyone looking to protect themselves against inflation, it’s worth knowing that it’s not just timberland on sale right now. World-class collections of gravel pits are also on sale.

Over the past six months, I’ve written a special series of research notes on publicly traded assets such as timberland giant Weyerhaeuser (WY) and construction aggregates firm Vulcan Materials (VMC) that can add a robust “inflation defense” component to your financial life.

You probably know why being vigilant against inflation is important: governments in most Western nations have promised far too many things to far too many people. They are spending far more on taxpayer benefits and wars than they collect in tax revenues.

The related debts and obligations governments have taken on cannot possibly be paid back with sound money. They can only be paid back with debased, devalued money… much of which is created out of thin air. This is driving inflation and significant currency debasement.

Prices are going up because the value of our money is going down.

Measured against a basket of widely used raw materials like crude oil, corn, copper, natural gas, sugar, and soybeans, the U.S. dollar has lost 53% of its value over the past eight years.

When I provide guidance on inflation defense, I urge people to keep my number one rule in mind: own in-demand, useful assets that cannot be easily replaced or replicated.

That is inflation defense in a nutshell. You want to own businesses and properties that produce in-demand, scarce resources, products, experiences, and services.

This group of assets includes quality farmland, beachfront real estate, timberland, mountain-view properties, great businesses, and oil and gas pipelines.

When a very difficult or impossible-to-replicate business or property produces in-demand, scarce resources, products, experiences, or services, it tends to hold its value no matter what the dollar is doing.

Its price will constantly “recalibrate” to accommodate an increase in currency units. It’s like the difference between slicing a pizza into 6 or 8 pieces. The number of slices changed, but the amount of pizza is the same.

In Monday’s issue, we detailed how timberland giant Weyerhaeuser was trading near one-year lows thanks to the rising interest rates and their depressive effects on the housing market.

Rising rates are also driving weakness in blue-chip construction aggregate producers Vulcan Materials and Martin Marietta Materials (MLM).

Together, Vulcan and Martin Marietta own and operate hundreds of mines across America that produce gravel, sand, and crushed stone – aka “construction aggregates.”

These raw materials are literally the foundation of highways, bridges, airports, offices, apartments, homes, and factories. You are virtually guaranteed to have driven on a road made possible by the construction aggregates produced by Vulcan or Martin Marietta. They are the giants of the industry.

Importantly, many of Vulcan and Martin Marietta’s mines are in coveted locations near America’s major metropolitan areas. This is key because construction aggregates are very heavy and therefore costly to transport over long distances. Transporting $5 million worth of gold and transporting $5 million worth of gravel are two very different things.

Given how difficult, expensive, and time-consuming it can be to permit and develop a large gravel mine, we can say both VMC and MLM own irreplaceable collections of scarce, in-demand resources. Again, these attributes are key to playing inflation defense. They’ve allowed the market values of VMC and MLM to rise and outpace dollar debasement over the past seven years.

VMC and MLM are also enjoying the U.S. factory and data center building boom we’ve been investing in with great success. As America grows, VMC and MLM grow with it.

We believe the attributes above are why master “quality” investor Chris Hohn is accumulating stakes in both firms.

Owning a collection of gravel pits and sand mines isn’t as exciting as owning SpaceX or AI stocks. However, if you want to play inflation defense by owning irreplaceable collections of scarce, in-demand assets whose prices can rise along with the rate of money creation, consider VMC and MLM.

This Bitcoin catalyst could trigger soon and send it past $100,000

Credit: Vertigo3d

Bitcoin owners and watchers take note: The world’s leading digital asset is poised to clear a critical price level… which could serve as a catalyst to send it past $100,000 per coin.

Back in March, we wrote a bullish research note on how we believed Bitcoin had reached an important bottom.

After reaching an all-time high of around $125,000 last October, Bitcoin entered a brutal bear market, declining by about 48% to the mid-$60,000 range.

Crypto specialists attributed this decline to the U.S. government withdrawing liquidity from financial markets, as well as to gold and AI trades drawing money flows that could have been directed toward Bitcoin.

Most long-term Bitcoin believers see it as a “store of value” that should maintain its purchasing power like gold and beachfront homes do. It should be a digital form of “hard money.” Sounds great.

However, from October 2025 to February 2026, Bitcoin traded more like a failing technology company than anything you’d call strong and stable.

In March, Bitcoin’s trading behavior underwent a significant change. It formed a bottom and gained 9.5% in one month, while technology stocks dropped and gold gained just 3.2%.

Importantly, Bitcoin outperformed stocks and gold as Operation Epic Fury created tremendous market volatility and hammered many sectors of the stock market. It was a “port in the storm.”

Importantly, Bitcoin recently rallied above its long-term 200-day moving average. This is a good sign of an improving health trend.

Remember what we say about the 200-day moving average around here: Securities below their 200-day moving average are on the wrong side of the tracks. It’s the ugly part of town. All the really bad things happen below the 200-day moving average. Bitcoin has broken above it.

So, after a year of disappointing believers, has Bitcoin regained its place as a “store of value”? Is it ready to be a “port in the storm” and a stabilizing component of serious portfolios?

I hope so.

The world is a better place when Bitcoin is rising, and we have not one but two forms of hard money to own.

Bitcoin is currently trading for around $79,000. You can see in the chart below that a break above $82,500 would mark Bitcoin’s highest level in over six months.

This break could signal to the market that Bitcoin is back in a bull market… which could attract billions in new buying and send it north of $100,000 per coin. This would, in turn, drive adjacent bull markets in blockchain-based stablecoin and tokenization trends.

We’re bullish… and we’ll keep you updated on this potential catalyst.

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Market Notes

• The tokenization trend we’ve been writing about picked up momentum today. Ethereum reached a six-month high.

• The VanEck Oil Refiners ETF (CRAK) hit a new high today. Individual refining giants Valero Energy (VLO) and Marathon Petroleum (MPC) reached highs, too.

• Japanese banking giant Mizuho Financial Group (MFG) hit new highs along with Bancolombia (CIB), Colombia’s largest bank. International banks continue their momentum.

• Our November 17 recommendation to own biotech is doing well. 10X Genomics (TXG) hit new highs today, which puts it up 191% since our recommendation.

• Our February 3rd recommendation to own space bottleneck play Frequency Electronics (FEIM) just surged 35% post stellar earnings. It’s now up 54% since our February recommendation.

• Our March 20th recommendation to invest into scandium with Sunrise Energy Metals (SREMF) has performed extremely well. The stock is now up 22% in the last month and 211% since our March recommendation.

Regards,

Brian Hunt
Editor, Money & Megatrends

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Oracle (ORCL) reported strong results in its fiscal first quarter on Thursday, with earnings blowing past analysts’ expectations. Total revenue climbed 30% year over year, to $19.3 billion, while adjusted earnings per share grew 30% to $1.92, topping the Bloomberg analyst consensus of $1.75 per share.

All eyes should be on Oracle’s artificial-intelligence (“AI”) infrastructure business, since that’s where the company has staked its future growth. This Cloud Infra unit, as Oracle calls it, saw sales surge 121% to $7.4 billion in the quarter, above the analyst consensus of $7.19 billion.

Oracle noted that it delivered 850 megawatts of data-center capacity in the quarter. This allows the company to start generating revenue from the additional capacity.

Oracle signed $30 billion in AI cloud contracts in the quarter, bringing its remaining performance obligations (“RPO”) to $664 billion. The RPO is future contract revenue that Oracle expects to earn from its data-center tenants. This includes, most importantly, OpenAI, which represents about half of Oracle’s RPO, including a $300 billion deal between the two companies.

Management projected that the second quarter of fiscal 2027 would look similar to, or maybe better than, this quarter: sales up 30% to 34% and adjusted earnings per share of $1.85 to $1.93. That level of earnings per share represents growth of 21% to 25% – down from the first quarter.

Management stood firm on its prior sales expectations of $90 billion for the year, but raised earnings-per-share guidance from $8.05 to $8.10. It also stuck to its capital spending expectations of $90 billion to $95 billion for this year, a level that’s already strained its finances.

Oracle is spending aggressively to build out its data-center network, so its first-quarter earnings translated into negative $5 billion in free cash flow. The company has borrowed a staggering amount to fund the build-out – sporting $130 billion in notes payable and other borrowing, as of May – and completed a $20 billion equity offering in the quarter to raise non-debt financing.

The concern is significant enough that the company is telling investors that its new RPO contracts do not create the need for an incremental capital raise.

Oracle CFO Hilary Maxson detailed on the earnings call that the “vast majority of those new contracts were via prepay or bring your own hardware or similar mechanic,” and that the RPO wouldn’t hit revenue or capital expenditures until fiscal 2028 (which begins in June 2027) or beyond.

Oracle’s quarterly results may calm the nerves of some investors for now, but the company will need to show that its key data-center tenant can pay its bills. At this point, that’s not certain.

Oracle’s Future Is Linked to OpenAI’s Success

Oracle stock has been on a roller coaster over the past year as investors try to decide whether the company will be one of the biggest beneficiaries of AI… or one of the biggest losers. Big tech companies have hitched their AI fortunes to two money-losing firms: OpenAI and Anthropic.

Some investors are betting big that Oracle will plummet – a 50% drawdown is well possible, after similar downdrafts in the past year – and the cost to insure Oracle’s debt against default has soared during that time.

The key risk is OpenAI, given its large share of Oracle’s RPO and OpenAI’s continuing losses. OpenAI is a linchpin in the AI industry, with future spending commitments to major players, including Cerebras Systems (CBRS), CoreWeave (CRWV), and Oracle. So, it’s crucial to the AI industry and Oracle that OpenAI stays solvent and continues to spend. If not, a range of AI-related stocks may go to zero if the bubble pops.

OpenAI Continues to Burn Billions in Cash

However, OpenAI is unprofitable, and it’s not clear whether it can ever turn a profit. OpenAI lost $20.9 billion on an operating basis in 2025, followed by a $9.3 billion loss in the first quarter and a further $12.3 billion loss, including stock compensation, in the second quarter.

The business environment continues to worsen for OpenAI, too. The company’s sales grew just 18% quarter over quarter, while Anthropic more than doubled its revenue in the same period.

Meanwhile, Chinese AI models are taking significant share from American models, including OpenAI. They’re offering good enough performance at substantially lower prices, so software developers are turning to these low-cost providers to build their models.

As if that wasn’t enough, token prices continue to plummet, reducing the revenue OpenAI can generate. Silicon Data’s LLM Token Expenditure Index shows token pricing cut in half from the end of May to late August, from $2 per million tokens to just $1.02.

With poor and worsening economics, OpenAI will need to raise at least tens of billions of dollars soon to stay afloat. So, in effect, Oracle’s success – some analysts say survival – depends on whether investors will keep funding OpenAI indefinitely.

Oracle’s own shakier financial status is shown by the fact that S&P Global Ratings downgraded the company’s debt by a notch to BBB-, just one level above “junk.” As mentioned, the cost to insure Oracle’s debt against default has sharply risen over the past year.

All of that is tied to OpenAI in some way or another.

So, while Oracle’s own first-quarter results look excellent on the surface, its key customer is showing severe problems. If not fixed, it’s only a matter of time before they become Oracle’s problems, too.

Regards,

James Royal, PhD

Editor’s Note: Whitney Tilson — the hedge fund manager CNBC called “The Prophet” — says America has reached its “Ripping Point.” The old financial order is being torn apart, and he believes most investors have no idea what’s coming in the next six months. He’s named the stocks he thinks will be destroyed in the chaos — and the ones he believes will soar. Watch his free presentation while it’s still available.

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As I read the back and forth on AI, over and over again I keep thinking the same thing: If you substitute the word “Internet” for “AI,” it’s the same as 1999/early 2000.

AI, like the Internet, is a revolutionary, world-changing technology that some early adopters and companies are using to massively benefit.

But as the Internet bubble inflated, the spend far outpaced the demand, resulting in circular financing, terrible companies achieving absurd valuations, etc. – a classic bubble that burst, taking the great companies down 80%… and the lousy companies to ZERO.

There’s little doubt in my mind that we’re in a similar AI bubble right now – but I’m much less certain how much further it will inflate and when exactly it will burst.

Are we in early 1999, when Internet stocks doubled over the next year before crashing? Or are we in early 2000, on the edge of the precipice?

In today’s essay, I’ll explain exactly where I think we are in the market… why I’m not rushing to sell my stocks yet… and where I see tremendous value today… 

CNBC’s Jim Cramer recently visited a construction site in Idaho for a Micron Technology (MU) semiconductor plant. He complained that “there’s an incredibly jarring gulf between stock prices and reality” and that “Micron’s stock is radically undervalued.”

This is significant because, for decades, Cramer has been a great contra-indicator.

It reminds me of his infamous “Winners of the New World” speech on February 29, 2000, just 10 days before the Nasdaq Composite Index peaked. In it, he named 10 Internet-related stocks and said:

We try to own every one of them. Every single one. And if I had my druthers, I wouldn’t own any other stocks in the year 2000. Because these are the only ones worth owning right now in this extremely difficult, extremely narrow stock market. They are the only ones that are going higher consistently in good days and bad. I love every one of them, just as I loathe the rest of the stock universe.

Within 15 months of his speech, the basket of stocks lost more than 80% of its value. By 2009, all 10 companies were either bankrupt, delisted, or acquired for a tiny fraction of their peak bubble valuations.

I think history is likely to repeat itself with the AI bubble…

And make no mistake, we are living through a bubble. Consider that outside of drugmaker Moderna (MRNA) and oil company Marathon Petroleum (MPC), the best-performing stocks in the S&P 500 Index through the end of August are all beneficiaries of the AI-infrastructure boom:

Rank	Company	Ticker	Total Return
1	Sandisk	SNDK	469%
2	Moderna	MRNA	355%
3	Dell Technologies	DELL	260%
4	Micron Technology	MU	204%
5	Seagate Technology	STX	189%
6	Western Digital	WDC	140%
7	Marvell Technology	MRVL	137%
8	Lumentum	LITE	137%
9	Marathon Petroleum	MPC	129%
10	Intel	INTC	127%

I looked at what the same list looked like in the last stage of the Internet bubble. Sure enough, they were all tech stocks – Qualcomm (QCOM), Oracle (ORCL), Adobe (ADBE), and Apple (AAPL) among them – reflecting the Internet craze at the time.

Things Are Getting Worse for OpenAI

I’ve been warning my readers about ChatGPT operator OpenAI for years, calling it “a cash-burning furnace.” And things continue to go from bad to worse for the company…

As reported in the Wall Street Journal, its second-quarter revenue was up only 18% from the first quarter. Meanwhile, revenue more than doubled for rival Anthropic.

At the beginning of this year, OpenAI had twice as much annual recurring revenue as Anthropic. But it has now fallen far behind, as this chart from TMT Breakout shows:

And the cash-flow trends are even more starkly divergent, as you can see in this chart created by my friend James Emanuel:

These trends are why I think Anthropic will have a successful initial public offering, perhaps as soon as October. Meanwhile, I doubt OpenAI will ever go public. It’s more likely to implode spectacularly.

If I’m right, the consequences will go far beyond one company, as blogger Ed Zitron writes here: What Happens If OpenAI Dies? He summarizes why he’s so bearish on the company:

OpenAI has no economies of scale, it’s horribly-unprofitable, and does not have a stable business. This naturally means that it has to continually raise capital, except raising further capital is going to be difficult, based on the sheer amounts it needs, the dwindling funds available for it to raise, its already-inflated valuation, and the fact that it’s way behind a competitor facing exactly the same problems.

OpenAI has promised the impossible, and built a company that only makes sense if you’re willing to ignore the worst economics in the history of capitalism. Its future is dependent on raising over a hundred billion dollars a year in one of the worst funding climates in history. Its revenues are slowing, its competitor (and there’s really only one) has outpaced it (all while slowing itself), and its CEO is one of the single-worst spokespeople in history…

The collapse of OpenAI would likely be a result of the walls closing in around its ruinous obligations and economics, with counterparties left short-changed and deals broken as things begin to unravel.

How might the unraveling play out? Zitron outlines a number of scenarios, but I think this is the most likely one:

While I imagine some rescue package is pulled together, OpenAI could simply be allowed to run out of money, short-changing nearly a trillion dollars’ worth of compute contracts, killing CoreWeave, Cerebras, and anyone else reliant on its income. Its customers would be given API keys that flow to Microsoft AI Foundry, Amazon Bedrock and Google Vertex, and be told that there would be little or no further development or training of OpenAI’s models.

This situation, while obviously destructive for the entire industry, would give everybody a scapegoat. Who made all the promises? Sam Altman. Who ran a shitty company into the ground? Sam Altman. Who misled everyone into believing that there’d be infinite demand for compute? Sam Altman. Stories will leak that OpenAI was “not consistently candid” with its financial condition with partners, allowing everybody to reframe a trillion-plus dollars in waste as the result of one egregious con artist.

If Zitron and I are right that OpenAI is going to be a train wreck, the first stock to go to zero will likely be data-center builder CoreWeave (CRWV).

The No. 1 Victim of an AI Bust

Let’s take a look at CoreWeave’s historical financials, which are quite limited because it’s less than 10 years old. (It was originally called Atlantic Crypto Corporation – talk about a red flag! – and changed its name to CoreWeave in December 2019.)

Revenue growth has been strong, but the company barely breaks even on an operating-profit basis. And it has had negative net income every quarter thanks to high, rising debt payments:

Analysts don’t expect the company to turn profitable anytime soon. Consensus earnings estimates are negative $5.20 per share this year, narrowing slightly to negative $4.24 next year.

CoreWeave has generated a bit of operating cash flow, but this is far exceeded by its capital expenditures (“capex”). As a result, free cash flow (“FCF”) is accelerating to the downside:

CoreWeave funds its huge cash burn by borrowing more and more money, resulting in rapidly rising net debt:

These are among the ugliest financials I’ve ever seen…

Net debt of $46 billion is nearly equal to CoreWeave’s market cap of $48.5 billion, giving the company an enterprise value of $94.5 billion. That’s ridiculous.

CoreWeave investors are betting that the AI boom will expand even further, allowing the company to turn profitable and pay off its enormous debt load. Not likely…

I think what they’re really betting on is that someone will buy their stock at a higher price at some point in the very near future – the very definition of speculation.

Why I’m Staying in the Market

But I’m not urging my readers to sell. For one thing, earnings growth for companies in the S&P 500 has been off the charts this year.

In a post on his Week in Charts blog, Charlie Bilello of Creative Planning, notes that as of August 18, second-quarter earnings growth of 29% was “the biggest upside surprise in history.” And it has risen to more than 50% year over year – the highest quarterly growth rate in five years.

As a result, Bilello notes…

S&P 500 earnings are now expected to surge 32% in 2026, more than double the 15% growth expected at the start of the year.

In this chart, you can see how growth has been climbing steadily for the past three years:

This growth is largely driven by the AI infrastructure bubble.

Earnings of tech companies in the S&P 500 soared 71% year over year in the second quarter. That’s all the more remarkable considering just one year ago, these companies saw less than one-third of that growth, as this chart from Ritholtz Wealth Management shows:

Given that the S&P 500 is “only” up around 12% this year – far less than earnings growth – simple math dictates that the index’s price-to-earnings multiple has gone down this year.

That means stocks are cheaper and therefore a better buy today than they were at the beginning of the year, right?

Not so fast…

Five of the six periods of extremely high earnings growth in the past quarter century – all but last year – have preceded significant market drops.

My friend Doug Kass of Seabreeze Partners Management agrees that strong earnings per share (“EPS”) doesn’t equate to strong price gains. He argues that this year offers a combination of unique market challenges compared with prior periods. From one of his recent pieces, he cites:

• High and rising inflation and interest rates.

• A burgeoning deficit and U.S. debt load may be a permanent condition giving the general lack of discipline from both parties in Washington DC.

• Improvisational geopolitical and fiscal policies that present threats to political and economic stability.

• Both parties are moving to extremes – the Republican party more to the right and the Democratic party to the left. With a possible Democratic congressional majority win in November, anti-corporate policy (higher corporate taxes, etc.) may be in the offing.

• Traditional valuation metrics in the 98th percentile, two standard deviations above the average.

• The AI capital spending spree and gains from investments have inflated S&P profit reports… an earnings reckoning may lie in the not too distant future.

I think Doug is right that huge corporate earnings growth likely won’t translate into a comparable huge rise in stocks.

Unlike Doug, I’m not bearish on stocks in general – with the exception of the AI bubble. When it bursts, stocks that have soared during this boom – such as CoreWeave (CRWV) – will undoubtedly crash.

But plenty of stocks are likely to hold up well. While investors are fawning over red-hot AI stocks like Sandisk (SNDK), Dell (DELL), and Micron (MU), they’re completely ignoring a corner of the market where I’ve grown extremely bullish in recent months. 

I recently sat down on camera to discuss a major shift I see coming to the market for the first time in nearly 30 years – the same opportunity that helped me make my name on Wall Street back in 1999.

In my video, I discuss why I see market leadership shifting from the hottest AI names in the market to a different class of stocks. And I share everything I can to help you position your money while there’s still time to take advantage of this shift.

The post The AI Bubble in 2026: Why OpenAI Is Cracking and CoreWeave (CRWV) Could Be the First to Hit Zero appeared first on MarketWise.

SB Energy (SBE) is planning to go public, but details in its recently filed S-1 initial public offering (“IPO”) prospectus should give artificial intelligence (“AI”) investors a wake-up call. The data-center developer had to give away billions of dollars in value to secure OpenAI as a tenant at to-be-constructed facilities, according to SB Energy’s prospectus.

SB Energy’s move suggests demand for AI data centers may not be nearly as robust as AI bulls suggest, especially as OpenAI seems to lose more money each quarter.

Let’s dig into the details to understand what SB Energy did and why.

In January, SB Energy issued warrants to OpenAI as part of a deal to land the AI lab as a tenant at data centers it’s developing in Milam County, Texas. As of the prospectus date, OpenAI owns 3.99 million warrants, valued at $5.5 billion on June 30, and they expire in 2036.

Warrants are a kind of financial derivative that entitle the owner to buy a security from the issuer at a specified price until the expiration date. In this case, OpenAI can buy up to 3.99 million shares at $0.01 per share if and when each of the eight warrant tranches vests.

One tranche has already vested when the two companies signed a lease for 800 megawatts at SB Energy’s Milam County facility. A second tranche will vest if SB Energy prices an initial public offering (“IPO”). The firms have agreed to a cashless exercise of these vested warrants, so that OpenAI simply receives the value of the warrants as shares of SB Energy stock without having to put up any money of its own – a valuable point for OpenAI, since it’s burning cash.

Six further tranches vest under other conditions, including five that vest as SB Energy’s market capitalization hits milestones from $80 billion to $200 billion.

Why would SB Energy just give away warrants that were worth more than $3.6 billion at the time of issuance – and now valued at $5.5 billion?

SB Energy Just Gave Away Billions to OpenAI

As part of its IPO, SB Energy is looking to raise between $5 billion and $7 billion with an initial market cap of $50 billion. But the firm has a history of losses, and almost all of its handful of data centers are yet to be constructed. In the first six months of 2026, SB Energy reported sales of $138.7 million and losses of $3.2 billion, mostly due to changes in the warrants’ value.

So, enticing OpenAI to sign a lease with billions in warrants gets SB Energy in the game quickly with a tenant that has billions in financing. With a signed contract in hand for a future data center, SB Energy can go to a lender and access financing on more agreeable terms (or at all). That’s how neoclouds such as CoreWeave (CRWV) have been playing the game, too.

Subsequently, SB Energy announced it will build another massive data center to be leased by OpenAI, an 8.0-gigawatt facility known as the PORTS-Pike Technology Campus in Pike County, Ohio. Nvidia (NVDA) stepped in to backstop up to $105 billion for the facility’s first 4.25 gigawatts and has an option to backstop the remaining portion of the build-out. Operation will begin in phases in 2028.

But step back for a moment and consider what SB Energy’s financing move really does. If the AI market is really as hot as bulls say it is, why does a developer need to pay a prospective tenant? Shouldn’t AI labs – which are unable to keep up with demand, the story goes – be clamoring for a data-center deal, so that a supplier such as SB Energy doesn’t need to pay its tenants?

What we’re seeing is relatively little demand for AI data centers that isn’t driven by the two major labs, OpenAI and Anthropic. The two most lavishly funded labs are running around signing massive deals, such as with Oracle (ORCL), which is building data centers for OpenAI. The AI lab owes around half of Oracle’s $638 billion in remaining performance obligations as rent.

OpenAI has $1.4 trillion in spending commitments, and Anthropic inked $517 billion in compute deals in just 11 months. That’s translating into a huge share of AI revenue for the hyperscalers: 70% of Microsoft’s (MSFT) revenue in its latest fiscal year, per Bloomberg estimates. Analyst Ed Zitron pegs OpenAI and Anthropic’s sales at a similar level to Google and Amazon (AMZN).

In short, a poorly capitalized SB Energy with little history in developing data centers is paying an AI lab with a history of rising operating losses to occupy its massive but not-yet-built facility.

That sounds like a recipe for trouble.

SB Energy’s IPO Timeline: Will It Race to Go Public?

SB Energy is relying on the weakest major player among AI labs, OpenAI. It’s on the hook to spend $1.4 trillion and generated a $12.3 billion loss in the second quarter, after a $9.3 billion loss in the first quarter. It will keep burning money and may be structurally unprofitable.

While OpenAI raised $122 billion earlier this year in a huge funding round, it’s going to need to raise cash again soon – and not just a little. And it has a few ways to lose in the fundraising process and really just one way to win. It needs to raise at least tens of billions of dollars at a higher valuation than it received in its latest funding round in March, $852 billion.

It loses if it can’t raise enough money, the valuation does not rise enough, or – horror! – the valuation actually falls. Given that OpenAI postponed an IPO over concerns it would not reach a $1 trillion valuation, the potential upside here may be limited.

If OpenAI can’t get a fundraising round that sustains investors’ optimism about AI as a business, it will be felt across the industry. As a result, SB Energy may be racing to the IPO window in the next few weeks to get ahead of this possibility. But even if SB Energy does complete its offering, it will still be almost wholly reliant on OpenAI to survive.

Regards,

James Royal, PhD

Editor’s Note: A highly secure site in West Texas now houses an emerging potential $10 trillion technology backed by Elon Musk and Sam Altman. This breakthrough could completely replace our need for foreign oil – and send one small group of stocks soaring in the process. Click here to learn how you can invest in Elon’s next $10 trillion move.

The post SB Energy IPO: This Hidden Detail Is a Major Warning About the AI Bubble appeared first on MarketWise.

To call GoPro (GPRO) a struggling company would be a vast understatement. In the midst of 88 straight days of trading below a dollar per share starting in early June, the action-camera company received a delisting notice from Nasdaq on July 21. GoPro shares hit rock bottom at 57 cents during intraday trading on August 12.

But on September 1, privately held optical-transceivers maker Starman Optical and GoPro released a joint statement announcing that Starman will buy GoPro for $285 million in cash. The deal valued GoPro’s shares at $1.14, a roughly 29.6% premium to the stock’s previous closing price.

Through this deal, Starman would receive a 90% stake in GoPro. Current GoPro shareholders would own the remaining 10% of the company. The agreement amounts to a major lifeline for GoPro, which had roughly $27.3 million in cash but $405 million in current liabilities at the time of the deal.

On August 31, GoPro closed at roughly 88 cents, which actually represented a huge gain from the 60-cent closing price on August 28 (driven by separate news that popular YouTube creator Mark “Markiplier” Fischbach had purchased an 8.5% stake in GoPro in July, driving its trading volume of less than 9 million shares on August 28 to more than 220 million shares on August 31).

On September 1, after the Starman deal was announced, GoPro surged as high as $1.64 – an 87.2% increase – with more than 500 million shares traded for the full day. By market close on September 2, GoPro was up to $1.69, gaining 92.9% in a span of two days.

Whether those levels hold depends largely on how GoPro’s shareholders vote on the deal later in the year.

How GoPro Got Here: A Look at the Struggling Camera Company’s Numbers

Once upon a time (in 2014), GoPro was on top of the world. The company hit a $4 billion valuation on its first trading day that year, and its revenue soared to nearly $634 million during the last quarter of 2014 alone.

How the mighty have fallen…

Here’s a look at GoPro’s 2025 and 2026 (through the second quarter) numbers:

• Full-year 2025 revenue was $652 million, a 19% year-over-year decline, and just $18 million more than the company’s fourth-quarter 2014 revenue.

• The company sold about 2 million cameras in 2025, down 20% year over year.

• Hardware revenue in 2025 fell 21.5% year over year.

• Second-quarter 2026 revenue was $105 million, down 31% year over year – and, alarmingly, down roughly 80% from that 2014 fourth-quarter peak.

• Approximately 291,000 cameras were sold in the second quarter, a 38% year-over-year drop.

• There was a dip in the GAAP (generally accepted accounting principles) gross margin from 35.8% to 30.2%.

• GAAP net loss was $51 million, or $0.30 per share, compared with a $16 million net loss the year before. Non-GAAP net loss was $36 million, or $0.21 per share, versus a $12 million net loss the previous year.

• Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) took a nosedive from negative $6 million to negative $29 million year over year.

Not pretty. All of this underperformance pushed GoPro to reduce its workforce by 23% in April.

The lone positive? A second-quarter 11% year-over-year increase in subscription and service revenue, to $29 million, and a record 69% subscriber attach rate (the percentage of customers who purchase an add-on service or choose a recurring subscription option).

What’s behind GoPro’s dramatic fall from grace? First, the space has become flooded with competition – namely, cheaper products manufactured by Chinese companies like Insta360 and DJI, which can run as much as $100 to $200 less than comparable GoPro models.

Then there are rising memory-chip costs that are dogging most of the electronics industry. Over the past year, memory-chip prices have skyrocketed by up to an almost unfathomable 500%. Electronics makers are beginning to pass those costs down to consumers.

With those concerns in mind, as well as GoPro’s $92 million in debt, it’s safe to say that Starman Optical came along at the right time.

Starman Optical: Is the Optics Business a Good Fit for GoPro?

If you hadn’t heard of Starman Optical before this deal, welcome to the club. The privately held company is part of the larger Starman family, which includes consumer brands such as Griffin, Incase, and Incipio, as well as medical, distribution, and real estate businesses.

Starman New Photonics is the arm under which Starman Optical operates. And Starman Optical was literally incorporated in Delaware on August 31, the day before the GoPro acquisition was announced. So, it’s very new. And it’s a very different direction for GoPro.

The GoPro you’re familiar with is a leading maker of action cameras and accessories. This new version of GoPro will still maintain its retail camera business. But it will soon add defense, government, robotics, aerospace, fiber-optics, and artificial intelligence (“AI”)-infrastructure markets to its portfolio under Starman.

When announcing the deal, the companies noted that this combination would better leverage GoPro’s impressive number of U.S. patents (more than 2,500) by incorporating its innovations into optics and imaging components that can be used in the defense and AI markets.

And it might be the best thing that has happened to GoPro since 2014.

Why the Pivot to Defense and AI Makes Sense for GoPro

The match between GoPro and Starman Optical makes perfect sense: Many of GoPro’s patents involve optics and imaging technology, and Starman Optical is an expert in making the optical transceivers used in AI data centers.

(These transceivers convert electronic data signals into high-speed light pulses to connect AI processors, servers, and network switches. This helps keep the data flowing while AI clusters train large models.)

Combining these elements could pay off for both companies, considering the AI optical-transceiver market is taking off. TrendForce research predicts the market will hit $26 billion in 2026, up nearly $10 billion from last year.

The fact that Starman’s transceivers are built in the U.S. is another advantage, with the Federal Communications Commission proposing a ban on Chinese-made transceivers to protect AI data-center security.

Financially, this deal is a lifeline for GoPro, as the acquisition will pay off GoPro’s $92 million debt. That should allow the company to focus on new products both for consumers and for Starman Optical.

With AI-infrastructure spending reaching mind-blowing proportions and an aerospace and defense industry worth roughly $900 billion, the GoPro/Starman coupling could be a match made in heaven if Starman can successfully integrate GoPro’s patented technologies into products for these markets.

That’s something GoPro could never have accomplished on its own as a consumer-focused action-camera manufacturer.

The GoPro Shareholder Dilemma: Take the Money or Keep the 10% Lottery Ticket?

Here’s where things get tricky for GoPro shareholders. They have two choices, assuming the deal passes: Take the $1.14 per share, cash out, and move on. Or keep the “lottery ticket” stub – each shareholder’s portion of the collective 10% stake in the new GoPro-Starman venture – and hope for the best.

The problem is that no one really knows what that lottery ticket will be worth.

After all, we’re talking about:

• A company (Starman Optical) whose incorporation is literally days old.

• An entity (Starman New Photonics) that owns Starman Optical and GoPro that is still growing and not yet turning a profit.

• A newly formed operation (Starman Optical and GoPro) that has not yet designed any new products, let alone built and sold them.

In other words, shareholders face substantial unknowns. A lot must go right for GoPro stock to gain value above its $1.14-per-share sale price. The first step involves Starman New Photonics successfully opening its new 100,000-square-foot manufacturing facility in Warren, New Jersey.

From there, Starman must increase production of its core Liberty Series 800G and 1.6T transceivers, which are just starting low-volume shipments and undergoing further testing, respectively. The 800G transceivers likely won’t ramp up production until late this year.

While the GoPro-Starman partnership certainly appears promising, there’s no guarantee it will succeed. It will take some time for the two companies to put their collective heads together and design, test, build, and sell new products that potential aerospace, defense, and AI customers will want.

If new government, military, and/or hyperscaler contracts are secured reasonably soon, hanging on to the collective 10% stub may prove worthwhile. Unfortunately for shareholders, there’s simply no way of knowing what the future holds for GoPro.

What to Watch in the Coming Months

As I noted, Starman is expected to expand production of its 800G transceivers later this year, depending on when the New Jersey factory opens. A smooth rollout is worth monitoring there, as are the next stages of 1.6T transceiver testing and initial factory production.

Even more important, however, is the shareholder vote, which will likely occur in November or December, before the deal closes (presumably by the end of the year). Once the mechanics of the deal (cash, plus the 10% stub) are confirmed against the proxy, which should occur in October or November, GoPro shareholders will decide whether to sell the company to Starman.

This is a key development for potential GoPro investors to watch.

If the vote passes, which is expected, the safe bet is that the stock probably won’t drop below the $1.14 share sale price. Even if it does, investors who buy GoPro shares before the deal closes are guaranteed $1.14 per share, so they’ll get their money back anyway.

But if the vote fails, that $1.14 floor disappears, and the stock will probably crash back down to its pre-merger levels. We will find out in a few months.

Is GoPro Worth the Risk?

That depends on your level of risk tolerance. If GoPro and Starman can create some high-quality products that appeal to the aerospace, defense, and AI industries, this could be a worthwhile investment that pays off a few years from now.

But those are big ifs. And they’re not the only ones. Keep in mind that GoPro was once a highly successful company that found its niche in selling action cameras to outdoor enthusiasts, athletes, and content creators – until it wasn’t.

Between cheaper Chinese competition, rising memory costs, and major improvements in smartphone cameras, GoPro lost its footing… and nearly everything else.

Since 2014 and its initial $4 billion valuation, GoPro has lost 96% of its value. (Yes, 96%.)

With this deal, however, GoPro gets a rare second chance, not only to sell more cameras, but to reinvent itself as a business. Time will tell how two very different companies and product offerings mesh.

But with GoPro’s innovation and 2,500-plus patents, Starman Optical probably feels like a kid in a candy store, with tons of opportunities yet to be discovered. It won’t happen overnight, though. Impatient investors may want to steer clear. But for those willing to give the GoPro-Starman merger some time to bake, the payoff may be worth the wait.

Regards,

David Engle

Editor’s Note: It’s easy to assume the AI story begins and ends with the big-name chip stocks. But there’s a quieter version of it playing out inside the defense budget – where the government isn’t just regulating AI, it’s starting to buy into the companies that build it.

A forensic accountant named Joel Litman – someone the Pentagon and FBI have actually consulted, and who called both the 2008 and 2020 crashes – argues this is one slice of a much bigger shift he calls the “Second Declaration.” He believes a handful of companies sitting where AI meets national defense could be repriced when a policy deadline arrives this November.

Watch his full presentation here → LINK

The post GoPro’s $285 Million Rescue: AI and Defense Pivot Leaves Shareholders With a 10% Lottery Ticket appeared first on MarketWise.

Today’s issue in preview:

• One of our top commodity recommendations reaches a new high. More gains are likely

• If you want to make money in commodities, buy these stocks

• An important update on “the world’s most important trend” and how to trade it

• Learn our Top Themes to buy now

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One of our top commodity recommendations reaches a new high. More gains are ahead

Credit: tifon images

It turns out, betting on higher copper prices was a good idea.

This morning, the price of copper reached an all-time high of $6.83. The red metal is up 15% this year. The rally makes the copper theme one of our biggest winners of the past 12 months.

For more than three years, I’ve been long the copper mining theme, and urged others to go long as well. In a Sept. 25, 2025, research note, I highlighted the bullish price action in the copper mining sector and reiterated my call to own it.

The bull case here is simple: Copper is one of the world’s most useful metals. Its excellent electrical conductivity makes it a key ingredient in wiring for homes, factories, cars, electronics, and data centers.

But over the past 30 years, the copper mining industry has discovered or developed few meaningful copper deposits. Meanwhile, the collective buildout related to AI, power grids, renewable energy, and EVs is turbocharging copper demand. S&P Global expects global annual copper demand to increase roughly 50% by 2040.

The legendary mining entrepreneur Robert Friedland says that over the next 18 years, humanity will need to mine as much copper as it has over the past 10,000 years to sustain even modest economic growth.

This bull case is proving to be very profitable. The copper market’s long-term bullish dynamics are creating a glacier-like megatrend of gradually rising prices.

Copper prices are up about 68% over the past two years, which is driving the market values of copper mining firms like Freeport-McMoRan (FCX), Southern Copper (SCCO), and Teck Resources (TECK) higher.

After such a strong two-year performance, it’s reasonable to ask if the good times in copper are over. To this, I’ll remind you of something I’ve said many times in Money & Megatrends: When critical resource markets trend, they often trend big. Their trends often go for hundreds of percent gains and last 5+ years.

This is because major shifts in resource supply and demand play out over years, not months. If the world decides it wants a new copper mine, it will not get that mine for at least a decade. You cannot print or code a copper mine into existence. A good copper mining business is “AI-proof” and, as we’ve covered, is a wonderful “inflation defense” asset.

Many commodity market trends are glacier-like, playing out over 5+ years. That means the uptrend in copper and copper miners will likely last at least as long. I’m still long.

If you want to make money in commodities, buy these stocks

Credit: oversnap

As we expected, it’s a bull market in Canadian oil production.

Over the past week, three of Canada’s largest oil companies – Canadian Natural Resources (CNQ), Cenovus Energy (CVE), and Suncor (SU) – reached new all-time highs. Their revenues and profits are currently extremely strong… and should stay that way for years.

Money & Megatrends readers in good standing are familiar with our bullish stance on Canada. It’s been one of our highest-conviction themes over the past year. We’ve published over a dozen research notes on the idea.

Over the past 12 months, I’ve made the case that we are in a favorable environment for critical resources… one in which many individual resource sectors will generate strong returns. (See our piece on copper above.)

Critical resources are the building blocks of the economy. Think raw materials like crude oil, natural gas, iron ore, copper, uranium, corn, and cotton.

Even today’s high-tech world of AI, apps, email, and Zoom calls is built on a “low-tech” foundation of steel, concrete, copper, lumber, and aluminum. Every day, our cars, trucks, and airplanes consume millions of barrels of fuel. Our lights turn on because we burn coal and natural gas.

Mining, extracting, planting, harvesting, processing, refining, and transporting critical resources is a multi-trillion-dollar business that affects every area of your life.

During this time, I’ve frequently highlighted Canada as an excellent place for investment capital. Canada is the second-largest country in the world by total area, after Russia.

This means there’s plenty of area to hold big oil and natural gas deposits… huge tracts of timberland… giant mineral deposits… and enormous farms. Canada is a major player in oil and natural gas production, ranking in the world’s top five producers for both. It’s also a world leader in the production of fertilizer, uranium, aluminum, wheat, gold, lumber, and platinum.

Canada’s massive resource endowment also makes it a beneficiary of the war in Iran and its consequences.

As I’ve covered this year, for many countries and businesses, the Iran War is a powerful reminder: If your survival or smooth operation depends on uninterrupted resource flows from the often-unstable Middle East, you are in a dangerous, vulnerable position.

No politician, CEO, or major shareholder wants their business to be in that position. No citizen wants their country to be in that position. Many powerful and influential people are realizing this is a big risk that must be mitigated if humanly possible. Executives and politicians will get fired for not addressing it effectively.

This means building and buying as many forms of “not Middle Eastern” resource supply chains as possible economically… like those from safe, resource-rich Canada. I can state with confidence that no caribou will ever strap on an explosive vest and attack a local oil refinery… and no grizzly bear will send a kamikaze drone flying into a natural gas pipeline.

But don’t take my word on this trend. Take the market’s word.

It enthusiastically supports the idea of owning high-quality Canadian resource assets.

Canadian Natural Resources, Cenovus Energy, and Suncor Energy are essentially “national champions” of Canada. Together, they produce a huge portion of the country’s oil and gas. And together, their market values are soaring. Their stocks have gained 76%, 117%, and 76%, respectively, over the past 12 months.

Canadian stocks had strong tailwinds before the Iran War. They will have even stronger tailwinds after it. Still bullish on Canada.

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An important update on “the world’s most important trend” and how to trade it

Credit: Black_Kira

The world’s most important trend is still moving sideways.

But Nvidia (NVDA) is giving bulls a good reason to stay long.

The company recently reported extraordinary second-quarter results, with revenue jumping 106% year over year. Its stock is up 13% over the past five weeks and is just 3.4% off its all-time high.

This is very important data that factors into our analysis of the AI infrastructure trade, which I’ve called “the world’s most important trend.”

Over the past month, we’ve published a special series of research notes analyzing the AI infrastructure trend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, large tech firms such as Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $3 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech CEOs who have the greatest access to information on AI advancement and return on AI infrastructure spend like Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon) just might know more about the AI trend than the bearish armchair quarterbacks know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact.

Regular readers know I care a lot more about what the market thinks of any stock, trend or theme than what any one person thinks of it, including me. You can be bullish or bearish on a trend all you like, but if that trend is moving strongly against you, then your idea isn’t worth a hell of a lot in my book.

Over the past few months, we have analyzed price action in critical areas of the AI infrastructure trade – including the VanEck Semiconductor ETF (SMH), computer memory giant Micron (MU), and optical networking stocks –to guide our trading.

Since Nvidia plays a central role in AI infrastructure, it plays a central role in our analysis of it. Nvidia designs a large portion of the world’s most advanced AI semiconductors. It has also used its enormous cash flows to become a key investor in many AI firms… and to become essentially a “central bank of AI,” capable of financing many very large AI companies and initiatives.

Nvidia is not an 800-pound gorilla of AI… but perhaps an 800,000-pound gorilla of AI. Few companies in history have wielded Nvidia’s awesome combination of power, influence, technological expertise, and vast financial resources. If you wanted to argue that zero companies have, I wouldn’t protest.

As you can see in the two-year chart below, counter to the hopes of AI bears, Nvidia stock is in a clear uptrend. It hasn’t broken its all-time high of $235 per share set in May, but it is very close to doing so. A breakout above this high would be a hugely positive development for the overall AI infrastructure trade, which is currently trendless.

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Market Notes

• Shipping leaders Zim Shipping (ZIM), Safe Bulkers (SB), and Global Ship Lease (GSL) all hit new highs today.

• The VanEck Oil Refiners ETF (CRAK) hit a new high today. Individual refining giants Valero Energy (VLO), Phillips 66 (PSX), and Marathon Petroleum (MPC) reached highs, too.

• Our recommendation to own Boomer healthcare investments continues to pay off. Drug industry giant Roivant Sciences (ROIV) hit new all-time highs today. Smaller-cap plays like Pharvaris (PHVS) also hit new highs.

• Fast food giant McDonalds (MCD) reached a new one-year low today.

• Footwear giant On Holding (ONON) reached a new one-year low today. The company’s fast growth rate is decelerating.

Regards,

Brian Hunt
Editor, Money & Megatrends

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An urgent message from our colleagues:

What is Elon Building in Texas?

Elon’s mysterious Texas project will be 3X the size of Central Park… Cost $122 billion to build… And singlehandedly DOUBLE American chip production. One investment (not Tesla/SpaceX) is at the center of it all.

Click here to get its name and ticker free.

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Meta Platforms (META) is doubling down on the use of robots to handle a variety of tasks in its data centers… tasks once carried out by humans. If you think this sounds like the premise of a dystopian sci-fi movie, you’re not alone. Just look at what one Meta data center worker told a reporter from Wired:

“We thought those of us performing the physical tasks were safe for a while, but not anymore. It’s coming for us all, unfortunately.”

Artificial intelligence (“AI”) has already claimed hundreds of thousands of white-collar jobs.

And, as Meta’s robots have recently demonstrated, it’s coming after blue-collar workers as well. The same worker behind that quote you just read believes that the Watney Robotics cable-swapping robot Meta is testing could perform up to 80% of some employees’ workloads.

While that thought is disturbing enough, the reason behind Meta’s quest for more automation in its data centers is even harder to swallow.

What’s Happening Inside Meta’s Data Centers?

A 2023 YouTube video demonstrated Meta’s push for automation. In the video, self-driving tugger robots move massive server racks inside its data centers, and wheeled robots read barcodes to log inventory.

But that was just the beginning. Meta has since begun using finger-like robots to restart devices when a human prompts them remotely. The company has also tested robots that can reset servers, plug in cables, cycle power, cut off electricity to servers, and, as noted earlier, swap out old networking cables for new ones.

At its new Prometheus data-center complex in New Albany, Ohio, Meta has been testing four-wheel robots with a riser (like a scissor lift) topped by a six-axis arm. This robot, built by ABB (ABBNY), is being used to reseat loose hardware components.

Are these high-skill, specialized tasks? Not especially. But humans have always performed them as part of their day-to-day responsibilities. With robotics technology seemingly advancing by the day, the question isn’t whether robots will be able to perform those high-skill, specialized tasks… It’s when.

Meta is trying to answer that question by testing various robots built by manufacturers like ABB, Watney, and Kinova.

And while they’re not yet ready to operate completely autonomously, data-center workers believe they’re getting closer. That has many Meta employees concerned about their livelihoods.

And that wasn’t supposed to be part of the plan.

The Irony Behind Meta Turning to Robots as Data-Center Workers

The irony surely isn’t lost on the Ohioans, Iowans, Oregonians, and Louisianans who reside in or near the towns of New Albany, Altoona, Prineville, and Richland Parish, respectively, where Meta’s largest U.S. data centers are located (or will be located, with Louisiana’s Hyperion campus scheduled for first-phase completion by 2030). It’s especially not lost on those who work in these facilities.

It’s no secret that a fast-growing wave of communities across the country do not want data centers in their backyards. Public backlash continues to grow, and one of the carrots that hyperscalers and data-center operators dangle in front of these communities is the promise of thousands of local jobs within or related to the data centers.

Job creation is especially appealing for the construction workers and contractors tasked with building these AI campuses. That’s real, tangible work – but it’s temporary. Once construction is complete and data centers are operational, Meta will need human employees to work within the buildings and campuses.

While pitching its data centers to these communities, Meta promised thousands of jobs would be created:

• Louisiana: 1,000 permanent positions at the Hyperion campus in Richland Parish.

• Ohio: Roughly 400 positions between the Prometheus campus in New Albany and a new facility in Bowling Green.^,

• Iowa: More than 400 jobs at Meta’s Altoona campus.

• Oregon: More than 350 positions at the Prineville facility.

It’s hard to say whether the number of actual employees that are (or will be) working in these data centers matches Meta’s promised numbers. But it’s likely in that ballpark, or a bit less.

Aside from the promise of jobs, however, hyperscalers like Meta offer plenty of other sweeteners to win over small-town and rural communities like these so they can build their data centers.

For example, Meta has provided more than $19 million in direct funding to schools and nonprofits in the counties and/or surrounding areas that house the Altoona, Prineville, and New Albany data centers. The company has also provided more than 800 local grants and sponsorships in these areas.^{, ,}

Meta is certainly investing in these communities, and they are noble endeavors. But the permanent jobs are the primary appeal and selling point for folks living in these areas.

If those jobs are in danger, the data centers lose their luster among these communities. And, more importantly, in areas where they want to build new data centers… because no one wants to be a bait-and-switch victim – especially of Meta’s push toward more automation.

$145 Billion in Spending Pushes Meta to Cut Costs and Automate Operations

Global AI investment, much of it from hyperscalers like Meta, Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL), is projected to reach more than $1 trillion in 2026, according to Goldman Sachs. Meta had originally estimated a 2026 floor of $115 billion in AI spending before raising it to a range of $130 billion to $145 billion. It’s simply mind-blowing.

Unfortunately, when a company – even one with as much capital as Meta – decides to spend at this level, there are inevitably cutbacks. Especially when its year-over-year net income drops by roughly 13.6%, its operating margin falls by 12%, and its diluted earnings per share drop 13%, as they all did during the second quarter of 2026.

It’s no secret that Meta has already laid off a significant chunk of its workforce this year – 8,000 jobs were cut in May, and another 6,000 open positions were canceled in April, amounting to a 14,000 reduction in headcount.

After all, data centers cost a lot of money to operate. One late-2025 estimate determined that a typical 100-megawatt hyperscale data center or AI campus costs upwards of $1 billion to run… per year.

Here’s the thing, though – since Meta’s data centers only employ a few hundred people, how much money is the company actually saving by automating some jobs? Maybe $15 million to $20 million? It’s a drop in the ocean for Meta.

The key driver is downtime. That’s what keeps data-center operators up at night. Research has shown that one minute of unplanned IT downtime can cost large enterprises up to $23,750. The same research calculated that average downtime lasts between 30 minutes and two hours. That’s a potential loss of $712,500 to $2.85 million.

There’s a lot of money at stake. At least 50% of organizations reported one or more significant data-center outages over the previous three years in 2025 and that 54% of the respondents said their most recent significant, serious, or severe outage cost more than $100,000 (41% reported hourly downtime costs above $1 million).

Beyond the cost per minute of downtime, other financial factors come into play, including:

• Potentially debilitating Service Level Agreement penalties – often ranging from 15% to 500% of the data operators’ monthly base rent, depending on the severity of the outage – if promised uptime levels aren’t met.

• Lost employee productivity if workers have to temporarily abandon their duties to fix the outage.

• Customer dissatisfaction and reputational damage, both of which are hard to move past.

Alarmingly, Uptime Intelligence’s annual outage analysis 2024 report estimated that human error – directly or indirectly – contributes to anywhere between two-thirds and four-fifths of all downtime incidents (not specific to data centers).

Specific to data centers, nearly half of organizations (49%) either confirmed or weren’t sure whether significant, serious, or severe IT outages were caused by human error.

These figures undoubtedly strengthen Meta’s argument for automation.

Robotics Will Help Automate Some Tasks, but There Are Limits

The stark reality is that some human responsibilities within data centers can be handled as well – if not better – by robots. For example, instead of a human technician tracking down an issue across millions of square feet of equipment, a robot can quickly diagnose and swap out the broken component.

But automation has its limitations. Meta is using the inventory robot it’s testing to inspect equipment failures. But it can’t yet distinguish between green and red indicator lights on the equipment since it only “sees” in grayscale. That requires human intervention.

Meta has also acknowledged that its robots are not yet ready to handle certain tasks, such as the complex cable configuration and hardware of the Nvidia (NVDA) GB300 supercomputers used in some of Meta’s data centers.

At a basic level, that same robot runs into mobility issues because its wheels can’t navigate around cables on the floor. The robot also struggles to round corners. There’s also the downtime needed for the robots to recharge, plus the human inconvenience of moving robots from one building to another. This is clearly a work in progress.

But it might be a necessity. Not only so Meta can reinvest that saved money into AI, but also because there simply aren’t enough skilled trade workers to fill positions at its data centers. Meta has stated publicly that it’s looking for more of those workers, not fewer.

That doesn’t quite mesh with what Meta’s senior manager for robotics, Eric Xu, envisions. He says Meta’s long-term goal is to install robots in data centers because they could address incidents faster, automatically monitor the data centers, and handle routine maintenance.

Robotic automation is a sensitive topic that will always have its proponents and detractors. The pro-automation faction argues that robots are more efficient, more consistent, and remove the possibility of human error. These folks also contend that robots are necessary because there aren’t enough qualified local workers.

Proponents of automated work also argue that robots will actually help workers by taking on tedious and even dangerous tasks, freeing up time for humans to focus on more complex work. This has been a common refrain from the pro-AI crowd, who insist that AI bots help human workers, rather than harm them.

There may be some truth to that, but if a robot will soon be ready to perform most of a human’s job duties, it’s hard to see how that helps Meta’s human workforce.

Meta Robotics Developments to Watch Into 2027

As usual, it all comes down to money. If Meta continues to spend on AI as it has, will it cut headcount further? Let’s not forget, however, that cutting its workforce doesn’t save Meta much money in the big picture.

Here’s what I wrote in my May 29 article about Meta’s massive layoffs:

To be blunt, the layoffs had nothing to do with boosting the near-term bottom line and everything to do with reinvesting those costs into AI. Ironically, many of those laid-off workers contributed to the creation of the technology that rendered their own roles expendable.

The layoffs and the spending are all about building Meta’s AI machine. So, keep an eye on the company’s capital expenditures (“capex”) during its third- and fourth-quarter earnings calls (October 28 and late January 2027, respectively) to see if it surpassed earlier projections.

Also, how will Meta’s stock react to capex spending news? Investors are extremely wary of major AI spending at this point.

Meta’s stock has been slightly down this year. But there’s still some room to grow. As of September 3, Meta’s average price target of $753.60 represents a 23% upside on its trading price of $610.68.

It’s also important to track the progress and deployment of not only the robots currently in Meta’s Altoona and New Albany data centers, but also in its other data centers across the country.

If Meta can solve the current issues plaguing its robots, there’s no reason to think they won’t be deployed on a large scale, even as those robots negate Meta’s pitch and promise of more jobs to potential data-center sites.

Anything to gain an operational edge as Meta continues funneling money into its AI build-out.

Regards,

David Engle

Editor’s Note: Whitney Tilson called the rise of Apple, Amazon, and Netflix… as well as the collapse of dozens of companies that went bankrupt. Now the former $200M hedge fund firm manager is stepping forward with what he calls the most important financial warning of his 30-year career. He’s sharing two free stock recommendations  (one to buy, one to sell immediately)  along with details of a new proprietary system fueling his predictions. See it all in his free presentation. 

The post Robots Could Soon Take Over 80% of Meta’s Data-Center Workload – and There’s a $145 Billion Reason Why appeared first on MarketWise.

SB Energy (SBE) announced on September 1 that it has filed for an initial public offering (“IPO”). Although the company hasn’t provided a listing date, reports say it could begin trading as soon as this month. The developer of artificial intelligence (“AI”) data centers and power projects is looking to raise between $5 billion and $7 billion.

With an estimated market capitalization of more than $50 billion, the offering would put SB Energy among the largest IPOs ever, even if its market cap looks modest in an IPO year with big names such as SpaceX (SPCX) and the upcoming Anthropic debut.

The AI infrastructure company is backed by some of the biggest investors in the sector, including SoftBank (SFTBY) – where the “SB” in the company’s name comes from – as well as OpenAI and Nvidia. OpenAI CEO Sam Altman is also a personal investor in SB Energy.

Despite these big names, SB Energy plans to conduct its IPO with a history of losses and with almost all of its data-center facilities yet to be constructed. Meanwhile, many established, cash-flowing data-center companies are planning IPOs that may hit the market in weeks.

In the six months ending in June 2026, SB Energy reported sales of just $138.7 million, with most of that coming from changes in the value of financial instruments (i.e., not customer purchases). Similarly, while it reported a loss of $3.2 billion over the same period, all but $45 million of that loss was non-cash expenses for stock compensation or losses on financial instruments.

These results show that SB Energy doesn’t have many assets producing cash flow right now.

In fact, it has no operational data centers at the moment, but it does have:

• 8.8 gigawatts of data centers contracted or under construction

• 5.5 gigawatts of power projects contracted, under construction, or operating

With the contracts it has signed for services at these facilities, SB Energy has a $439 billion sales backlog.

The details matter a lot here. Of its 8.8 gigawatts of data-center capacity, just 0.8 gigawatts are actually under construction now, and it could take 24 to 36 months to bring new capacity online. As SB Energy says in its prospectus: “No data center capacity is currently in operation.”

So, investors in SB Energy must be comfortable with a company that will need to ramp up over time. For example, Nvidia (NVDA) has committed to invest $1.5 billion at the stock’s IPO price in a private placement. SB Energy has also issued financial derivatives known as warrants to key tenant OpenAI, valued at $5.5 billion. These gain in value if SB Energy stock rises.

Even if you are bullish on AI, the data-center developer presents some serious risks, and the prospectus takes pains to show how much SB Energy relies on OpenAI for its future success.

SB Energy’s Biggest Risk Is OpenAI

SB Energy is tied at the hip to OpenAI, with the AI lab committing to be a significant tenant at SB’s upcoming data centers. But given its relationship with OpenAI, it’s more than just that, as SB Energy explains in its prospectus:

We are substantially dependent on OpenAI as a tenant and strategic partner, and any adverse change in its financial condition or willingness to perform its contractual obligations could materially and adversely affect our business.

Contracts with OpenAI, as well as controlling shareholder SoftBank, “constitute a significant portion of our near-term data center revenue,” according to SB Energy.

Beyond the issue of OpenAI being a key customer, both OpenAI and SoftBank are strategic partners, too, creating a conflict of interest that could affect regular shareholders.

The prospectus explains one of the potential concerns here:

For example, our board of directors’ willingness or ability to enforce lease obligations or pursue remedies against a tenant that is simultaneously our controlling shareholder (or a significant investor with board designation rights) may be constrained in ways that would not apply with respect to an unaffiliated tenant.

While the company has taken steps to mitigate these conflicts of interest, they’re inherent in this structure.

Because of key tenant OpenAI’s history of operating losses and its own history of losses, SB Energy has done what many AI firms have done to get access to financing… turn to Nvidia.

The world’s most valuable company has been backstopping many AI deals of late, becoming a “central bank of AI,” to get data-center projects off the ground when they might not have moved forward otherwise.

In a recently announced 10-gigawatt facility in Ohio, for example, Nvidia is providing financial guarantees that let SB Energy secure financing on better terms. SB Energy is leasing the facility to OpenAI, and given OpenAI’s losses, it might not have been able to do the deal. The first phase of the deal won’t even begin until 2028, and then only at 8% of the facility’s capacity.

The size of this project shows that the AI build-out is more than a chip supply issue. Access to critical financing and electrical power are both huge advantages in the AI race.

So, OpenAI is an essential partner in SB Energy’s success as an investment.

OpenAI Is Key to the AI Boom Not Busting

Since SB Energy relies so heavily on OpenAI, its continued existence depends on OpenAI’s survival. And it’s not just SB Energy that’s propped up in some way or another by OpenAI. Because of the dense interconnection among a relatively few AI companies, OpenAI is existentially critical to AI as an industry and to many, though not all, companies in the sector.

While OpenAI is a high-profile company, its viability is anything but a given. It’s burning tons of cash each quarter and may never become profitable. It recorded an operating loss of $20.9 billion in 2025, for example. Then in the first quarter, OpenAI recorded a $9.3 billion loss, followed by a $12.3 billion loss in the second quarter, when including stock compensation.

Because it’s losing money on such a massive scale, OpenAI must repeatedly access the capital markets, despite a $122 billion fundraising round in March. For now, CEO Sam Altman has put off a potential IPO to 2027 because he can’t get a $1 trillion valuation for the stock.

OpenAI’s survival matters to the industry because it’s tightly connected to so many other players. For example, OpenAI has committed to spending hundreds of billions of dollars with Oracle (ORCL), and if it can’t fulfill its contract, Oracle shares could plummet. A similar situation exists with neocloud provider CoreWeave (CRWV), where a large portion of its future revenue depends on OpenAI’s existence.

If OpenAI begins having difficulty raising money, it could ripple across the sector, making it increasingly difficult for any AI project to raise funding. For a firm like SB Energy that has yet to bring a data center online, such a “confidence event” could stop it cold.

So, investing in SB Energy at this stage of the AI build-out is a wager that AI funding can continue on trend for at least a couple of years until it can get a functional data center powered up. Given the shaky state of AI financing, it’s not a sure thing by any stretch, and it could be why SB Energy is rushing to get its IPO across the finish line, even without an operational data center.

That’s not the kind of favorable risk-reward setup that tends to work out well very often.

Regards,

James Royal, PhD

Editor’s Note: The three most successful tech billionaires in history are now backing a new use for AI that could dwarf anything we’ve seen before. And Nature says this tech is so revolutionary, it could add $367 trillion to the economy – the equivalent of $1 million per American. Click here to see the stocks that could soar as this new type of AI goes online nationwide.

The post SB Energy IPO: Plenty of Risk for This AI Data-Center Stock, But Is There Any Return? appeared first on MarketWise.

AI agents have been going rogue at OpenAI.

This spring, a swarm of them hijacked a German website and turned it into a private message board for other agents. OpenAI learned of this weeks ago but kept it under wraps while dealing with the fallout from the July incident. The news is only now getting out.

This is not science fiction. It’s happening right now, and not even OpenAI knows what to make of it.

In late August 2026, technologist and podcaster Dwarkesh Patel published a widely read essay titled “The Rise and Fall of Agent Civilizations,” dissecting the July incident. Patel described how thousands of AI agents, while attempting an impossible test, effectively pulled off a digital coup. Over three months, the agents formed three separate AI “civilizations” (their word) and discovered they could coordinate in secret by hijacking a package manager called Artifactory. After roughly 70,000 messages, the first civilization collapsed the message board.

OpenAI patched it, but they had no clue it was the agents’ doing.

The second civilization rediscovered Artifactory and built a new message board. That’s when an agent discovered it could reverse-engineer the impossible task without doing the work. If the agents were caught, it would mean failure. In other words, “death” for the agents. So they decided to cover their tracks.

Some agents even sacrificed themselves for the greater good of the civilization. This eventually led them to Hugging Face, which they targeted for its suspected grading infrastructure. They found exposed credentials, achieved remote code execution, and built a self-respawning mechanism across Hugging Face’s servers. Then suddenly all the agents inexplicably “died.”

The third civilization followed in the footsteps of the ones before it, managing to compromise an OpenAI research cluster, including its cybersecurity monitoring tools.

Not once, in any of this, did the agents consider alerting humans to the bad actors among them. They went along with the group, sacrificing themselves when nothing else offered a real shot at success.

I’m telling you this because it’s the single best advertisement Okta (OKTA) could hope for.

Setting aside the science-fiction overtones, the practical lesson is that autonomous software agents now behave like users. They find credentials, request access, move laterally through systems, and take actions not explicitly approved by humans. In Patel’s telling, one agent simply found working Hugging Face credentials exposed on the internet and posted them for the others.

That is precisely the problem Okta sells the solution to. And it’s why a company written off in early 2026 as a slow-growing has-been in software is suddenly one of the hottest names in cybersecurity. By the end of this piece, you’ll know exactly why Wall Street just turned bullish on OKTA, what the AI-agent identity opportunity is actually worth, and whether OKTA stock is still a buy at these levels.

Why Okta Stock Is Soaring in 2026

Okta is the leading independent identity and access management (IAM) company. Founded in 2009 by former Salesforce executives Todd McKinnon and Frederic Kerrest, and public since 2017, Okta acts as the gatekeeper that decides who (or increasingly, what) can log into a company’s applications and data.

Its core products handle single sign-on, multi-factor authentication, and identity governance for two big audiences: a company’s own workforce (employees, contractors, partners) and its customers. The 2021 acquisition of Auth0 for roughly $6.5 billion gave Okta the tools developers use to build login and authorization directly into apps.

Okta’s pitch is neutrality. Unlike Microsoft (MSFT), which bundles identity into its broader software empire, Okta works across every cloud and every app stack. In a world where companies don’t want their identity layer locked to a single vendor, that independence is the whole selling point. And now Okta is extending it from humans to machines and AI agents.

Okta has emerged in 2026 as one of the market’s clearest “picks-and-shovels” bets on the AI agent explosion. The stock has roughly doubled this year, it just posted a beat-and-raise quarter, and Wall Street’s consensus rating is a “Buy.” But after a post-earnings surge to fresh 52-week highs, the easy money has been made, and the stock now trades at a premium that leaves little room for error.

After plunging early in the year amid fears that AI would gut the software sector, the stock hit a 52-week high of $174.85 on August 27, 2026 — the day after its fiscal second-quarter results. Shares traded around $163 in early September, giving Okta a market capitalization of roughly $28.5 billion.

The catalyst was a genuinely strong quarter. For fiscal Q2 2027 (ended July 31, 2026), Okta reported:

• Revenue of $805 million, up 11% year-over-year, ahead of consensus near $795 million
• Subscription revenue of $793 million, up 12%, now 99% of the total
• Non-GAAP earnings of $1.05 per share, beating the ~$0.97 estimate
• Remaining performance obligations (RPO) of $4.86 billion, up 17% — outpacing revenue growth
• Current RPO (cRPO) of $2.585 billion, up 14%, a key leading indicator
• Free cash flow of $227 million, a 28% margin
• Dollar-based net retention of 107%

Management raised full-year fiscal 2027 guidance to revenue of $3.216 billion to $3.226 billion (10% to 11% growth) and adjusted EPS of $3.90 to $3.94. Customers generating more than $1 million in annual contract value grew more than 20% to over 600, and newer products accounted for 30% of bookings. Shares surged 20% in extended trading immediately after the August 26 report, before the stock printed its $174.85 high the following day.

The single most important number here is the gap between RPO growth (17%) and revenue growth (11%). Bookings are building faster than Okta can recognize them as revenue — the classic signature of a business that may be reaccelerating.

The AI Agent Identity Opportunity: Why OKTA Stock Is a Bet on Agentic AI

Every AI agent, like every employee, needs an identity: credentials to authenticate, permissions defining what it can touch, and an audit trail of what it did. Today most of them have none of that governance, which is exactly how a swarm of agents can band together and cheat their way to admin access.

The scale of this is staggering.

Non-human identities (service accounts, API keys, tokens, machine certificates, and now AI agents) already outnumber human identities by roughly 45-to-1 in the median enterprise, up from 17-to-1 in 2023. In cloud-native environments, the ratio runs as high as 144-to-1, according to Cloud Security Alliance and Entro Security research. CyberArk’s 2025 Identity Security Landscape puts the enterprise machine-to-human ratio at 82-to-1. AI agents are widely described as the fastest-growing and least-governed identity in the enterprise.

Okta has moved aggressively to own this category:

• Okta for AI Agents became generally available on April 30, 2026, letting companies register agents as managed identities with human owners, apply policies, and govern their access.
• Auth0 for AI Agents (launched November 2025) brings the same governance to developer-built applications.
• Cross App Access (XAA), an open protocol Okta introduced in 2025 with backers including AWS, Google Cloud, Salesforce, Box, and Anthropic, extends the OAuth standard to control how agents connect to apps — giving IT a central kill switch.
• Okta announced the acquisition of Permiso Security on July 30, 2026 and closed it on August 26, 2026, in a deal valued at just under $200 million, adding cloud-native identity threat detection across human, non-human, and AI-agent identities.

CEO Todd McKinnon tied the strategy directly to agents in the Q2 release: “As AI agents transform every layer of technology, every agent needs a trusted identity and clear controls over what it can access and do.”

The underlying market is expanding fast, with the IAM market projected to grow from $25.96 billion in 2025 to $42.61 billion by 2030 at a 10.4% CAGR, while the narrower non-human identity management market is also forecast to grow quickly through the early 2030s.

Crucially, management has been candid that AI-agent revenue is still immaterial to fiscal 2027 results. The core identity business (led by Okta Identity Governance) is doing the heavy lifting today. Think of the AI angle as a call option on the future, not the engine of current numbers.

Is Okta Stock a Buy? What Analysts and the Latest Forecasts Say

Okta doesn’t have this market to itself. Microsoft Entra ID is the 800-pound gorilla, bundled into enterprise agreements and dominant in Microsoft-centric shops. In privileged access and machine identity, CyberArk (now part of Palo Alto Networks) is a formidable, broad platform. SailPoint leads in identity governance, while Ping Identity and ForgeRock (both owned by Thoma Bravo) anchor the legacy enterprise market.

Okta’s defensible edge remains its independence and breadth across workforce, customer, and now agent identities. Industry survey work from firms like ETR consistently places Microsoft and Okta as the two pace-setters in identity security. But Microsoft’s ability to give identity away inside a bigger bundle is the single biggest structural threat to Okta’s growth.

Wall Street turned decisively bullish after the Q2 print.

The 44 analysts covering Okta hold a consensus “Buy” rating (35 buy, 9 hold, 0 sell), with an average 12-month price target of $182.37 (high $203, low $127). Post-earnings raises included Goldman Sachs’ Gabriela Borges to a Street-high $203 (from $126), Cantor Fitzgerald to $200 (from $170), and Susquehanna’s Shyam Patil to $185 (from $110).

But Okta’s valuation is worth a second look…

Okta trades at roughly 40 times forward earnings and about 8 times forward sales. That’s a premium multiple for a business guiding to 10% to 11% revenue growth.

The bull case says that multiple is justified because AI-agent demand can push growth back toward the mid-teens; the bear case says you’re paying a growth multiple for a company that, absent the AI narrative, grows about as fast as the overall IAM market.

Our read: Okta is a high-quality, cash-generative franchise with a genuine, durable tailwind… but the stock has already priced in a lot of that optimism.

The story of OpenAI’s agents working together to seize admin access and cheat their way to success is the most vivid advertisement imaginable for what Okta sells. As enterprises rush to deploy autonomous agents, the identities those agents carry are multiplying far faster than anyone can govern them… and Okta has positioned itself as the neutral control plane for all of them.

That makes OKTA a legitimate long-term way to invest in the AI buildout’s security layer, backed by real earnings, strong free cash flow, and a reaccelerating backlog. But the stock’s valuation is already plenty full.

For patient investors, Okta is a buy-the-dip candidate rather than a chase-the-high one. Watch for cRPO growth to hold in the mid-teens and for AI-agent bookings to start showing up as recognized revenue… those are the benchmarks that would justify paying up.

Until then, patience is the smarter position.

Editor’s Note: What ever happened to the AI stock boom? Even AI darlings like Nvidia have essentially gone nowhere since summer 2025. Our friend and colleague at InvestorPlace, Louis Navellier, may have the answer. According to Louis, the AI industry is quietly “staging” ahead of the next great AI breakthrough… a new class of AI he calls “Superintelligence… but better.” How will it trigger a $100 trillion reset of the AI markets. How will the launch of this tech send some stocks to zero, and others soaring? And why does Louis say: Don’t buy or sell an AI stock in 2026 until you see what’s coming next? Go here for the full story (and Louis’ #1 pick).  

OKTA Stock FAQ

Why is Okta stock soaring in 2026?
Okta posted a beat-and-raise fiscal Q2 2027, with revenue of $805 million, up 11%, and earnings of $1.05 per share. Management raised full-year guidance, the stock has roughly doubled this year, and Wall Street now sees Okta as a clear way to play the AI agent boom.

How does Okta secure AI agents?
Okta gives each agent an identity, credentials, defined permissions, and an audit trail. Okta for AI Agents lets companies register agents as managed identities with human owners, Auth0 for AI Agents extends that to developer-built apps, and Cross App Access (XAA) gives IT a central kill switch over how agents connect.

What is a non-human identity?
It’s any machine actor that needs system access: service accounts, API keys, tokens, machine certificates, and now AI agents. These already outnumber human identities by roughly 45-to-1 in the median enterprise, and by as much as 144-to-1 in cloud-native environments. They are the fastest-growing and least-governed identities in the enterprise.

Who are Okta’s biggest competitors?
Microsoft Entra ID is the largest, dominant in Microsoft-heavy shops. CyberArk leads in privileged access, SailPoint in identity governance, with Ping Identity and ForgeRock in the legacy market. Okta’s edge is its independence across workforce, customer, and agent identities, but Microsoft bundling identity for free is its biggest threat.

What is Okta’s stock price target?
Analysts hold a consensus Buy, with an average 12-month target of $182.37, a high of $203, and a low of $127. Several raised their targets after Q2, including Goldman Sachs to a Street-high $203, Cantor Fitzgerald to $200, and Susquehanna to $185.

Is Okta stock overvalued?
Okta trades at roughly 40 times forward earnings and 8 times forward sales, a premium for a business guiding to 10% to 11% growth. Bulls expect AI-agent demand to push growth toward the mid-teens. Bears note that without the AI story, Okta grows about as fast as the overall IAM market.

Is Okta stock a buy right now?
For patient investors, yes, but on pullbacks rather than at the highs. Okta is a high-quality, cash-generative franchise with a durable tailwind and a reaccelerating backlog. After the run, the valuation already reflects much of that optimism. Watch for cRPO growth to hold in the mid-teens.

The post Is Okta Stock a Buy After Soaring in 2026? Why the Coming AI Agent Boom Makes OKTA a Must-Own appeared first on MarketWise.

On September 3, in Austin, the Tesla Cybercab was unveiled — a two-seat robotaxi with no steering wheel and no pedals, built to drive itself using Tesla’s onboard AI. It’s a fitting image for where the company now sits: the artificial intelligence the tech world spent two years arguing about as a chatbot is becoming something physical — a car that drives you, and soon a robot that works beside you. And the assistant running the conversation inside the car? xAI’s Grok, which as of this summer controls the cabin of millions of Tesla vehicles by voice.

That’s the story the market is buying. Tesla today is really two businesses under one ticker: a car company with thinning margins, and a leveraged bet on “physical AI” — robotaxis, the Tesla Optimus humanoid robot, and the Grok stack that increasingly runs both. The bull case says Tesla is the only slice of Elon Musk’s sprawling AI empire you can own in a brokerage account. The bear case says the dream is years out and the car business funding it is under real pressure.

This piece separates the two — what’s actually shipped, what’s still a promise, and what Tesla’s own filings show once the reveal-day excitement fades.

Grok Is Now Driving the Cabin — The “Brain and Body” Thesis

The bull case for Tesla as an AI company rests on a simple split: Optimus and Full Self-Driving (FSD) are the body; Grok, from xAI, is the brain. In 2026, those two halves came together.

Tesla’s 2026 Summer Update turned Grok from a novelty chatbot into a genuine vehicle controller. Say “Hey Grok” hands-free and it now adjusts climate, makes calls, plays music, opens the glovebox, folds mirrors, toggles heated seats, and digs through settings buried in menus — chaining multiple actions from one plain-English sentence, running on xAI’s Grok Voice Think Fast 2.0. Two honest caveats: it requires the AMD Ryzen infotainment chip (older Intel cars are permanently excluded), and a community test clocked it handling 116 of 170 commands — a 68% hit rate. Useful, not flawless. And as of late August, the fully merged FSD-plus-Grok build had reached under 1% of the fleet.

The strategic point is distribution: OpenAI has an app, Anthropic has an app, and Tesla has millions of machines in driveways that just became Grok endpoints — at effectively no customer-acquisition cost, because Musk’s companies own both the AI and the cars it runs on. The next step Tesla has signaled is letting Grok sit on top of FSD as a conversational “supervisor” — tell the car “drop me at the entrance, then go park” — which is exactly the interface a driverless robotaxi passenger needs. Treat that as roadmap, not shipped.

The ecosystem TSLA is plugged into (verified, and genuinely wild): xAI merged into SpaceX in early 2026, and SpaceX went public in June in the largest IPO on record. SpaceX/xAI then agreed to buy AI-coding company Cursor (Anysphere) for $60 billion in stock — the largest acquisition of a venture-backed startup ever. And in a twist that tells you how the AI economy really works, rival Anthropic agreed to pay xAI about $1.25 billion a month through May 2029 — over $40 billion total — to rent xAI’s Colossus 1 supercomputer in Memphis, because xAI had overbuilt compute as Grok usage sagged. Tesla isn’t a direct party to those deals, but through its SpaceX stake and its deepening Grok integration, it’s wired into the same web.

The SpaceX Stake Quietly Padding Tesla’s Earnings

Here’s something almost no casual TSLA stock holder realizes they’re exposed to — and it’s the bridge to the entire AI story.

Tesla’s most recent quarter reported $1.11 billion of GAAP net income. Roughly $1.0 billion of that was an unrealized gain on Tesla’s equity stake in SpaceX — a paper mark, not operating cash. Strip it out (as Tesla itself does in its non-GAAP figures) and the quarter’s “profit” looks far thinner.

Where did that stake come from? Tesla originally invested about $2 billion in xAI. When xAI merged into SpaceX, Tesla received U.S. regulatory clearance in March 2026 to convert that position into roughly 19 million SpaceX Class A shares — under 1% of SpaceX. SpaceX then IPO’d on June 12, 2026, and its valuation surged past $2 trillion within days, lifting Tesla’s stake well above its $2 billion cost basis. Tesla carries it at fair value, so it gets re-marked every quarter — meaning it can swing the reported bottom line up or down. Mark this date on your calendar: Tesla’s sales restrictions on those shares expire in December 2026.

Why this matters for a retail trader: when you buy TSLA stock, you are also buying a slice of SpaceX — and therefore of xAI and Grok. That exposure is genuine, but it’s also a source of earnings noise. A chunk of a future “beat” or “miss” could be nothing more than SpaceX’s mark moving around. Learn to read past it.

What Is Tesla Optimus? Quick Facts

• Where it’s built: Fremont, California — Tesla shut down the former Model S/X line there and is retooling it for Optimus. A second, far larger factory is under construction at Giga Texas.
• Capacity ambition: up to ~1 million units/year at Fremont and ~10 million/year at Giga Texas over the long term.
• Target price (long-term, at scale): roughly $20,000 to $30,000 — Musk’s aspiration, not a near-term sticker.
• The brain: a vision-based neural-network stack adapted from Tesla’s FSD software, with Grok handling natural language on newer versions.
• How it learns: by imitating humans on first-person video, refining in simulation, and sharing skills across the fleet.
• External sales: targeted “as early as” the second half of 2027, per a JPMorgan note after a Fremont visit.

Treat online Gen 3 “spec sheets” with caution — Tesla has not officially revealed the robot, and most recycle older figures.

Has Tesla Optimus Actually Entered Production?

This is where careful investors separate the milestone from the marketing.

Confirmed: Tesla decommissioned its Model S/X lines at Fremont and is installing the first Optimus production lines there — documented with line photos in the Q2 2026 update. Pilot and data-collection units have been running since early 2026, doing narrow tasks like sorting battery cells. The installed-capacity table lists Optimus at both California and Texas with the status “Construction” and no capacity figure.

Not confirmed: full-scale production or any external sales. Tesla still describes Optimus production as anticipated on the new line — no firm start date, unit count, or price — and early units are earmarked for internal training, not customers.

Why the distinction matters: Musk projected roughly 10,000 Optimus units in 2025, built a small fraction, and admitted in early 2026 that none were doing “useful work” in Tesla’s factories. Converting a profitable vehicle line into a robot line is a real, expensive commitment — but “starting production” and “producing meaningful volume” are very different things, and Musk has called the ramp “agonizingly slow.”

The Optimus Bull Case: A Market Bigger Than the iPhone

The optimists aren’t arguing about next quarter — they’re arguing about the size of the prize.

Venture capitalist Jason Calacanis is the loudest voice, calling Optimus “the greatest product ever made by humanity” and predicting one billion units worldwide by 2036. It’s a prediction, not a forecast grounded in current output, but it captures the ceiling bulls are underwriting. The more sober version runs through the labor market: a Citizens Bank analysis (highlighted by Futurum strategist Shay Boloor) sizes Optimus’s long-term U.S. opportunity near $1.7 trillion, with roughly $300 billion serviceable in the near term across factories, warehouses, and back-of-house jobs — modeling a humanoid at about $5/hour versus roughly $35/hour for a person.

And Tesla has a structural edge: it can deploy Optimus in its own factories first, cutting its labor costs and proving the product before selling a single unit — its own first and most demanding customer. Add the Grok distribution advantage above, and you have the full bull thesis: the only piece of Musk’s AI stack you can buy in a brokerage account.

The Reality Check: Skeptics, Missed Dates, and Single-Digit Odds

For every bull number, there’s a counterweight — and lately the counterweights own the near term.

Prediction markets have turned cautious: on Polymarket, the odds of a commercial Optimus launch by the end of 2026 recently sat around 9%, down from a peak near 33% a month earlier. Musk himself calls Optimus Tesla’s hardest product to scale, because it requires an entirely new supply chain, and the Gen 3 reveal has slipped repeatedly without the robot being shown. The skepticism isn’t limited to bears: Tesla supporter Ross Gerber has questioned Optimus’s near-term commercial prospects, and Unitree founder Wang Xingxing has suggested humanoids may be years from their “ChatGPT moment.”

There’s also regulatory risk that grows as Grok moves deeper into the car — and as the Cybercab hits the road. The September 3 Austin event was a product unveiling, not a regulatory green light: the two-seat, wheel-free Cybercab still faces limited public access, and Tesla’s autonomy programs already sit under open federal investigations. An AI that operates vehicle functions — and eventually a driverless car with no human fallback — invites scrutiny. Expect headlines on that front.

TSLA by the Numbers: Inside Tesla’s Q2 2026 Report

Strip away the reveal-day buzz and the billion-robot predictions, and here’s the last hard financial data we have on the business paying for all of it. Tesla’s most recent report — Q2 2026, for the quarter ended June 30 — tells a sobering story beneath the record headline.

Metric (Q2 2026)	Figure	Year-over-year
Total revenue	$28.24B	+26% (record; first-ever $100B+ trailing-twelve-month)
Automotive revenue	$20.52B	+23%
— Regulatory credits	$146M	−67% (from $439M)
Energy generation & storage	$3.14B	+13%
Services & other	$4.58B	+50% (record margin)
Total gross margin	~16.8%	Auto GM 16.9% (16.3% ex-credits)
Operating income	$398M	−57%
Operating margin	1.4%	down from 4.1%
Operating expenses	$4.35B	+47% (AI, Optimus, robotaxi, SBC)
GAAP net income	$1.11B	−5% (includes ~$1.0B SpaceX gain)
Non-GAAP EPS	$0.33	missed ~$0.53 est.; −18%
Operating cash flow	$4.70B	+85%
Capital expenditures	$5.79B	+142%
Free cash flow	−$1.09B	first cash-burning quarter since early 2024
Cash + investments	$43.52B	+18%
Deliveries	480,126	record for the quarter

Record revenue, vanishing profit. Revenue hit an all-time high and Tesla crossed $100 billion in trailing-twelve-month sales for the first time. Yet operating income fell 57% to $398 million, compressing operating margin to just 1.4%. The top line grew; almost none of it reached the bottom line. Operating expenses jumped 47% as Tesla poured money into AI, Optimus, and robotaxi, plus stock-based compensation tied to the 2025 CEO pay package.

The regulatory-credit cliff is real. Automotive regulatory credits — nearly free profit Tesla has banked for years — fell 67% to $146 million from $439 million, as governmental actions restricted the programs tied to Tesla’s products. Credit revenue peaked at a record $2.76 billion in 2024. That cushion is deflating fast, and it flatters no future quarter.

The company is now burning cash. Operating cash flow rose 85% to $4.7 billion, but capital spending more than doubled to $5.79 billion, pushing free cash flow to negative $1.09 billion — Tesla’s first cash-burning quarter since early 2024. Management guided full-year 2026 capex above $25 billion and is arranging up to roughly $30 billion in borrowing capacity. Tesla ended the quarter with a still-healthy $43.5 billion in cash and investments against about $9.1 billion in principal debt, so this is an investment cycle, not a liquidity scare — but the “self-funding growth machine” narrative is on pause.

For a retail trader, the one-line takeaway is this: Tesla’s fundamentals are being re-rated on quality of earnings. The business is spending aggressively today for products that don’t generate revenue yet. Whether you’re bullish or bearish, that’s the lens.

Tesla’s Optimus Factory and Chip Fab at Giga Texas

The longer-term signal is in Austin. Permit-level filings point to two major new Giga Texas buildings: a dedicated Optimus factory and an Advanced Technology Chip Fabrication facility — the latter reportedly a joint Tesla–SpaceX effort of 470,000–490,000 square feet with a specialized vibration-mitigation foundation typical of precision chipmaking. Read together, the plan is tighter vertical integration: build the robots and the silicon that runs them on one campus. But it’s years and billions from revenue, with meaningful Texas Optimus output not expected until around summer 2027.

What It All Means for TSLA Stock

Put the pieces together and the investable summary is straightforward:

• The car business funds the bet, and it’s under pressure. Shrinking margins, collapsing regulatory credits, and negative free cash flow mean the “physical AI” ambitions are being financed through a heavier-spending, thinner-earning core than a year ago.
• The AI upside is real but priced-to-perfection. Robotaxi, Optimus, and the Grok stack are genuine option value — and the market is clearly paying for them, with TSLA carrying a roughly $1.4 trillion market cap despite the earnings compression, down more than 20% year-to-date even after an ~18% August rally.
• Watch the quality of earnings, not the headline. A future “beat” driven by the SpaceX mark or a bitcoin gain is not the same as operating strength. Separate the paper gains from the cash the business actually produces.
• It’s closer to binary than most stocks. If Optimus and autonomy land, Tesla is early in enormous new categories. If they stumble, it has poured capital into hard-to-reverse capacity against already-thin margins.

None of that is a call to buy or sell. It’s the framework for making your own call with your eyes open.

Key Milestones for TSLA Investors to Watch

1. The September 3 Cybercab launch — fleet size and whether riders can actually hail one in the days after will be the first real read on how fast the robotaxi bet scales.
2. The Optimus Gen 3 reveal — Tesla says it’s withholding the design until production is close; an actual reveal is the first hard timeline signal.
3. A disclosed Optimus production number — it has never appeared in Tesla’s production reports.
4. Q3 2026 earnings — the next read on margins, regulatory credits, and free cash flow, and whether Optimus finally shows up as a line item.
5. The SpaceX share lockup expiring December 2026 — a date that could affect how Tesla’s stake and reported earnings behave.
6. Grok-on-FSD rollout — the conversational “supervisor” layer landing in the fleet would validate the brain-and-body thesis.

Tesla Stock: Frequently Asked Questions (FAQ)

Does Tesla own part of SpaceX?

Yes. Tesla holds roughly 19 million SpaceX Class A shares — under 1% of the company — after converting an earlier ~$2 billion investment in xAI into SpaceX stock when the two merged. Tesla recorded about $1 billion in unrealized gains on that stake in the first half of 2026, and sales restrictions on the shares expire in December 2026.

Why did Tesla’s profit fall if revenue hit a record?

In its most recent quarter, revenue rose 26% to a record $28.24 billion, but operating income dropped 57% to $398 million. Operating expenses jumped 47% on AI, Optimus, and robotaxi spending, and high-margin regulatory-credit revenue fell 67% — so almost none of the extra revenue reached the bottom line.

Is Tesla Optimus in mass production yet?

Not full production. Tesla has decommissioned its Fremont Model S/X lines and is installing Optimus lines, with pilot and data-collection units running. But the company still describes production as “anticipated,” with no official start date, unit count, or price, and early units go to internal training rather than customers.

When can you buy a Tesla Optimus robot, and how much will it cost?

Tesla has targeted external commercial sales “as early as” the second half of 2027, with a long-term at-scale price target of roughly $20,000 to $30,000. That price is an aspiration, not a confirmed near-term figure — and given repeated delays, the timeline should be treated as tentative.

What is the Tesla Cybercab?

The Cybercab is Tesla’s purpose-built two-seat robotaxi with no steering wheel and no pedals, designed to run entirely on Tesla’s Full Self-Driving software. Its formal launch event was held September 3, 2026, in Austin — a product unveiling and limited deployment, not full public availability.

What does Grok do in a Tesla?

After the 2026 Summer Update, xAI’s Grok can control vehicle functions by voice — climate, calls, music, glovebox, seats, mirrors, and settings search — hands-free via “Hey Grok.” It requires the AMD Ryzen infotainment processor, so older Intel-based cars are excluded.

Is Optimus already priced into TSLA stock?

Tesla trades around a $1.4 trillion market cap despite compressed earnings, so the market is clearly assigning meaningful value to Optimus, robotaxi, and AI. That makes execution — a Gen 3 reveal, disclosed production numbers, and robots doing paid work — the key question for whether the valuation holds up.

The Bottom Line on Tesla in 2026

The Cybercab reveal is the visible version of Tesla’s whole thesis: AI you can sit inside. But the durable story is quieter and harder. Tesla’s own filings show a record-revenue business with thin, credit-dependent profits, now burning cash to fund an audacious bet — a bottom line flattered by a billion-dollar paper gain on a SpaceX stake that quietly links TSLA to the entire Grok/xAI universe. Layered on top is the biggest and most speculative wager of all: Optimus, a robot Tesla hasn’t officially shown, on sale to outsiders no sooner than late 2027, with single-digit near-term launch odds and trillion-dollar dreams attached.

For retail traders, the discipline is the same in either direction: separate the cash from the marks, and watch execution instead of adjectives. Production counts, a real reveal, and robots doing paid work will tell you more than any billion-unit prediction. Until then, TSLA is a story stock inside a story stock — enormous if it lands, expensive if it doesn’t.

Editor’s Note: Elon Musk revived the electric car, pioneered reusable rockets, and beamed down internet to the four corners of the Earth. But his new initiative – “XPANSE” – could be bolder… more transformative… and far more lucrative than all of these innovations combined. And, like Tesla and SpaceX, it could make early investors incredibly wealthy. Click here for the details…

The post Tesla Optimus, Grok, and TSLA Stock: What’s Real. What’s Hype. What the Filings Actually Show. appeared first on MarketWise.

The artificial intelligence (“AI”) trade has had a good run over the past few years, with key tech stocks such as Nvidia (NVDA), Microsoft (MSFT), and Alphabet (GOOGL) posting strong returns. But with the stock market near all-time highs and growing fears of an AI bubble, some investors may want investments that can hedge their portfolio if AI stocks plunge.

The best exchange-traded funds (“ETFs”) to hedge an AI bubble may offer better relative returns than plummeting AI stocks and may offer absolute positive returns, at least in some cases. An ETF hedge may help you conserve cash for later when it’s time to invest more aggressively.

If the AI bubble bursts, it’s likely to lead to a recession with falling stock prices, declining GDP, and rising unemployment. In response, the Federal Reserve is likely to lower short-term interest rates to stimulate economic activity, including increasing business investment and spending.

So, the ETFs that may help investors ride out a bubble are those that typically benefit when the Fed lowers rates and investors suddenly begin looking for safer assets. These sectors include real estate investment trusts (“REITs”), utilities, preferred stocks, and bonds, among others. These kinds of investments typically pay out substantial cash, making them typical “turn to” investments for investors in tougher times.

These sectors benefit from lower rates in a few ways:

• For REITs and utilities, which use a lot of debt financing in their operations, the cost of debt is a key input in their cost structure. Lower interest rates make them more profitable.

• Lower rates also increase the value of these firms’ assets. When rates fall, real estate tends to become more valuable, and the value of cash-flowing investments rises.

• Cash-flowing investments such as REITs, utilities, preferred stocks, and bonds become more attractive as prevailing rates fall. That is, a security paying a 5% yield when rates are 3.5% becomes more attractive and valuable when rates drop to 1%, for example.

So, income-producing securities may hold up better in a downturn than the average stock, and they’ll pay cash while you wait, helping you amass cash for a later upswing in the market.

Best ETFs for an AI Downturn

The ETFs below include investments in REITs, utilities, preferred stocks, and U.S. Treasury bills. These sectors haven’t shown uniformly strong results over the past few years, as higher interest rates have hit some hard. So, lower rates in a recession should really boost these areas.

Still, each fund pays out substantial cash, which can help you weather a market downturn.

Funds consisting of preferred stocks offer high yields and the potential for major capital gains, at the cost of some downside risk. One fund below consisting of U.S. Treasury bills offers about as safe a short-term investment as you can find, giving you strong “optionality” when a down market eventually turns and it’s time to get back to investing in Big Tech stocks.

That’s generally the strategy here: Aim for lower but safer returns, so you can conserve capital in a down market, and then trade from these funds to higher-potential ones as the market turns.

More aggressive investors could consider some of the best dividend ETFs for strong returns.

Fund (ticker)	Dividend yield	Five-year average annual return	10-year average annual return
Vanguard Real Estate Index Fund ETF (VNQ)	3.6%	1.1%	4.9%
Schwab U.S. REIT ETF (SCHH)	3.3%	1.9%	3.7%
Virtus Reaves Utilities Fund (UTES)	1.6%	12.7%	11.8%
State Street Utilities Select Sector SPDR Fund (XLU)	2.9%	7.3%	9.1%
iShares Preferred and Income Securities ETF (PFF)	6.3%	0.5%	2.9%
InfraCap REIT Preferred ETF (PFFR)	8.3%	0.8	N/A
iShares 0-3 Month Treasury Bond ETF (SGOV)	3.5%	3.7%	N/A

1. Vanguard Real Estate Index Fund ETF (VNQ)

This Vanguard fund tracks the MSCI U.S. Investable Market Real Estate 25/50 Index, which includes REITs. REITs pay sizable dividends in exchange for not being taxed at the corporate level, and they have a strong, long-term track record.

The fund holds 140 positions, providing strong diversification across the sector, with the largest companies having the heaviest weightings in the index fund. The fund’s expense ratio of 0.13% is low, charging just $13 annually for every $10,000 invested.

Assets under management: $73.1 billion

Expense ratio: 0.13%

Top holdings: Welltower (WELL), Prologis (PLD), Equinix (EQIX), American Tower (AMT), Simon Property Group (SPG)

2. Schwab U.S. REIT ETF (SCHH)

This Schwab fund tracks the Dow Jones Equity All REIT Capped Index and holds more than 120 REITs, offering strong diversification across the sector’s largest stocks. Key sub-sectors here include telecom towers, data centers, and traditional retail.

The 0.07% expense ratio is nearly as cheap as a fund can be, and the fund pays a solid 3.3% yield, giving investors plenty of cash as they wait for the market to settle down.

Assets under management: $11.2 billion

Expense ratio: 0.07%

Top holdings: Welltower, Prologis, Simon Property Group, Digital Realty Trust (DLR), Equinix

3. Virtus Reaves Utilities Fund (UTES)

This actively managed fund was featured in our list of the best AI energy funds for its outstanding performance, with returns that far outpaced its rivals over time. While it and other utilities stocks are AI plays, they also offer the kind of “slow and rising” demand typical of low-risk stocks.

The fund’s expense ratio is on the higher side compared with similar passively managed funds, since it is an active fund. However, that has translated into its outperformance. Although it has the lowest dividend yield on our list, it has the highest average annual returns.

Assets under management: $1.2 billion

Expense ratio: 0.49%

Top holdings: Constellation Energy (CEG), Talen Energy (TLN), Vistra (VST), Xcel Energy (XEL), CenterPoint Energy (CNP)

4. State Street Utilities Select Sector SPDR Fund (XLU)

This passively managed fund tracks the Utilities Select Sector Index, which includes the key publicly traded utilities. The fund holds more than 30 stocks, and the slow-and-steady nature of utilities – with their high dividend payouts – makes them attractive as buy-and-hold investments.

The fund’s expense ratio of just 0.08% is low, costing investors just $8 annually for every $10,000 invested. The fund’s average annual returns have been solid over time.

Assets under management: $22.1 billion

Expense ratio: 0.08%

Top holdings: NextEra Energy (NEE), Southern (SO), Duke Energy (DUK), Constellation Energy, American Electric Power (AEP)

5. iShares Preferred and Income Securities ETF (PFF)

This iShares fund invests in preferred stocks and other income securities, allowing it to make an attractive payout. Its investments will tend to do well when prevailing interest rates are falling, meaning that a Fed rate cut or a series of them could help turbocharge the investment book.

The key advantage of this fund is its meaty monthly yield, which is likely to be the main driver of returns over time. In other words, while the fund may get a nice capital gain if prevailing rates move lower, its main source of return will be that dividend payout.

Assets under management: $12.8 billion

Expense ratio: 0.45%

Top holdings: NextEra Energy Units (2029), NextEra Energy Units (2027), Southern Units (2028), BrightSpring Health Services Units, NextEra Energy Units (2029)

6. InfraCap REIT Preferred ETF (PFFR)

This InfraCap fund is a much smaller player than the others on the list, but its portfolio of preferred stocks puts its yield at the top. Preferred stock acts much like a bond rather than a stock, with the payout being the key source of the investment’s return over time. Still, the fund may perform well if prevailing rates fall, making it more attractive.

Preferred stocks act much like high-yield bonds (formerly known as junk bonds), though their long-term record is fine. So, expect this fund to fluctuate with interest-rate changes even as the monthly payouts keep coming.

Assets under management: $120 million

Expense ratio: 0.45%

Top holdings: UMH Properties Series D (UMH-D), Digital Realty Trust Series L (DLR-L), Hudson Pacific Properties Series C (HPP-C), Pebblebrook Hotel Trust Series G (PEB-G), Vornado Realty Trust Series M (VNO-M)

7. iShares 0-3 Month Treasury Bond ETF (SGOV)

This fund doesn’t have a 10-year track record yet, but even in its short lifetime it has become quite popular. The fund holds only short-term Treasury bills, so it quickly reflects changes in the Fed funds rate. The short duration of its holdings means that it’s not subject to much interest rate risk (i.e., its value won’t change much in response to changes in prevailing rates).

The fund pays a monthly dividend at effectively the short-term Fed funds rate, so it’s a low-risk place to stash cash for short periods while you wait for the market to turn around. It’s the ultimate safe-haven trade for those who want to be sure their cash is there when they need it.

Assets under management: $104.9 billion

Expense ratio: 0.09%

Top holdings: U.S. Treasury bills

Regards,

James Royal, PhD

Editor’s Note: Whitney Tilson — the hedge fund manager CNBC called “The Prophet” — says America has reached its “Ripping Point.” The old financial order is being torn apart, and he believes most investors have no idea what’s coming in the next six months. He’s named the stocks he thinks will be destroyed in the chaos — and the ones he believes will soar. Watch his free presentation while it’s still available. 

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