One of my very favorite investment themes at The Freeport Society is that of exponential progress. The marriage of free-market capitalism and technology has lifted literally billions of people out of poverty. Today, even the most humble laborers in the poorest parts of the world enjoy the benefits of technology that would have been the stuff of Star Trek fantasy just 20 years ago. 

Exponential progress requires a few basic building blocks to be in place… 

You need a mostly free economy with property and intellectual capital rights. 

People must be able to enjoy the benefits of their labor to be incentivized to do it. 

And you need the basic technology and power in place. 

Without the steam engine, water wheels, and abundant coal, the Industrial Revolution would never have gotten off the ground. Likewise, without the existing invention of computers, the Internet Revolution would have been impossible.

Well, as our Freeport Society friend Luke Lango explains, we’re at a similar point with artificial intelligence. The first step was creating the hardware capable of running AI applications. Now comes the fun part! 

With the first building block in place, we’re about to see a wave of creative innovation… and exponential profit potential to go along with it. Luke explains more in his essay below. Enjoy.

To life, liberty, and the pursuit of wealth,

Charles Sizemore

Chief Investment Strategist, The Freeport Society

---

The AI Stocks Set to Soar This Summer

By Luke Lango, Senior Investment Analyst, Hypergrowth Investing

All year long, chip stocks like Nvidia (NVDA) have been the hottest AI investments on Wall Street. NVDA itself is already up more than 134% year-to-date – even amid the worst tech selloff since the AI bull market began in early 2023.!

But we believe the AI industry is rapidly approaching a critical inflection point. And soon, a different kind of stock will reign supreme. 

Move aside, chip stocks. 

It’s time for the software stock boom. 

You see, AI chip stocks were the AI Revolution’s “first phase,” as the industry’s “picks and shovels.” 

But we think that trend has mostly played out. 

Companies spent billions on a chip buying spree in 2023 and 2024. So, what will they do now? 

They certainly won’t just sit on them. 

What they will do is create new AI models and applications, which is exactly why software stocks should boom this through the rest of the year and into 2025. 

Welcome to the Second Phase of the AI Revolution

We’ll likely see hundreds of new AI software applications emerge over the next 12 months. Those applications will proliferate throughout society. And by the end of 2025, we’ll be drowning in AI software. 

We’re already starting to see early signs of this. 

For example, AI software provider Palantir (PLTR) says that demand for its Artificial Intelligence Platform (AIP) software is very strong. 

And just this week, Alphabet (GOOGL) reported strengthening growth in its core cloud business due to accelerating demand for its infrastructure and generative AI solutions. 

The company also reported that its core Search business is benefiting from new features like AI Overviews, which is proving very popular among younger users. 

What’s more, management mentioned AI about 100 times on the quarterly conference call, with CEO Sundar Pichai emphasizing that currently, the risk of Alphabet underinvesting in AI is far bigger than the risk of overinvesting. 

Our takeaway? 

One of the world’s largest tech companies is going all-in with AI – and has no intention of slowing down anytime soon. 

It seems pretty clear to us that the AI software boom is kicking off. 

We think this boom will give rise to some huge stock winners. 

After all, the dot-com boom – which we view as a great parallel for the AI boom – also played out in two phases: an infrastructure boom followed by a software boom. 

The infrastructure boom occurred throughout the 1990s, as the telecom infrastructure necessary to power the internet was built out. Internet hardware stocks like Qualcomm (QCOM) and Cisco (CSCO) soared during this era. 

This was followed by the software boom of the 2000s and 2010s. Internet applications and services were built atop the infrastructure that was established in the 1990s. And during this era, internet software stocks like Amazon (AMZN), Netflix (NFLX), and Microsoft (MSFT) soared. 

The Final Word

A year ago, I teamed up with fellow Freeport Society friends Louis Navellier and Eric Fry to talk about how AI would impact every aspect of the economy and markets. Fast-forward to today, and everything we’ve predicted is playing out. 

Although AI continues to dominate the financial news and stock market, millions of investors remain in the dark about a new AI breakthrough. New research shows thousands of stocks could soon be impacted by this new breakthrough… 

This transition presents us with a unique investment opportunity — one that’s about to send shockwaves through the stock market. And we want to make sure you know about it. 

That’s why I teamed up with Louis and Eric again recently to discuss this crucial shift where AI software stocks will outperform chipmakers and developers. You can watch this discussion here… but be warned. My publisher will be pulling this video down soon.

During our time together, we explore the immediate steps you can take to protect yourself from impending destruction while potentially multiplying your investment tenfold as the AI Revolution enters “Phase 2.”

Watch the replay now… and get ready!

Talk again soon,

Luke Lango