Chief Investment Strategist, The Freeport Society
Charles’ Note: Our Freeport Society fellow investing master Louis Navellier beat just about everyone in the AI Revolution by recommending Nvidia years before everyone started talking about ChatGPT, Language Learning Models (LLMs), and nuclear-powered hyperscale data centers. And his Growth Investor members benefited immensely. At last count, they’re sitting on about 3,300% open gains.
The good news is, according to Louis, it’s not too late to add NVDA to your portfolio… in fact, he’s calling it the “stock of the decade.”
However, the massive stock returns we’ve seen from the builders of the AI “superhighway” may be approaching their end. We’re entering a new phase of this revolution, so I’ve asked Louis to share his insights with us. Below, he’ll tell you about the next huge AI stock winners… the companies building new businesses on top of the AI superhighway.
Even better, he and colleagues Eric Fry and Luke Lango put together a portfolio of the best of the best of these stocks. They recently took to the “airwaves” to tell folks all about it.
Now, over to Louis…
It’s that most bittersweet time of the year.
We reflect on all that went wrong or right for us during the last 12 months.
This year, we can add to our reflections what’s been good and bad for the first half of this decade. It’s hard to believe, but in just 10 days, we’ll be at the halfway point… sliding into the back half of the 2020s.
All of this has me thinking about my time in this business. It’s been more than four decades now.
Looking back, I’ve enjoyed a good winning streak, thanks in large part to my Stock Grader.
It led me to Tyson Foods, the original supplier of Chicken McNuggets to McDonald’s.
Tyson was left with a lot of leftover “chicken parts” as the demand for McNuggets soared. So, the company decided to make its own “Chicken Chunks,” creating a monopoly out of a new way to eat chicken.
Its operating margins expanded and created windfall earnings, and my members made over 900% in the stock.
Then, there’s Conair, a personal care company that specializes in hair products.
Conair created a handheld hair-drying product in the early 1980s when “big hair” was the biggest fashion trend. As demand rose and people wanted bigger hair, the watts of hair dryers rose from 800 to 1,200, then to 1,800, and up. This fueled Conair’s earnings explosion.
Once competition came in a few years later, I decided to recommend selling Conair… and my subscribers made over 1,000% in profits!
Now, I can confidently tell you that most people are lucky to have one 1,000% gainer in their life. For a really good analyst? Maybe once a decade.
So, how have I been able to pick out these huge winners before they really pop?
It’s quite simple really… some of the biggest winners of my career all had one thing in common…
They all had monopolistic characteristics. In other words, they were so dominant, there were virtually no competitors. This is what led to their amazing returns.
Given this, I think I know what the “Stock of the Decade” will be when the 2020s are over.
I’m talking about Nvidia.
Today, I’ll explain why.
We’ll also take a closer look at Nvidia’s business and how I found the stock before the AI Revolution started.
Finally, I’ll lay out why I expect the AI Revolution to continue way beyond Nvidia… and where to learn how you can profit from it.
Let’s get started…
Nvidia and the Dawn of the AI Revolution
Nvidia is a leading computer graphics chip company that makes graphics processing units (GPUs).
Originally, only video game enthusiasts prized such graphics chips. But it turns out that Nvidia’s GPUs have a wide range of powerful applications. They can be used to aid computers in applications like financial modeling, oil and gas exploration, virtual reality, and even in self-driving cars.
Indeed, in the late 2010s, Nvidia began receiving some unusual orders. Not only were crypto enthusiasts buying up high-end GPUs to mine cryptocurrency… but machine-learning researchers were also using the cards to train their models.
It turns out that GPUs are really good for something called “parallelization.” This is where you break down a large computational task into smaller ones that can be calculated independently and simultaneously.
That makes GPUs extremely powerful – far more than even the best central processing units (CPUs) in these types of computations.
Data storage provider Pure Storage estimates that GPUs are roughly three times faster than an equivalent CPU for machine-learning algorithms. That is an enormous advantage in a world where large AI models can require months to train and cost millions of dollars.
That put Nvidia on the fast track to success.
And thanks to its portfolio of valuable patents and internal research, the Silicon Valley company got an enormous head start on the AI Revolution.
No other company came close.
Why I Recommended Nvidia
What originally got me excited about Nvidia was what it was doing with the development of autonomous vehicles. My son was an engineering student at Stanford University when they debuted an autonomous race car named “Shelley” that used Nvidia chips.
But in 2019, when I learned what the company was planning to do with AI, I pulled the trigger and added it to my Growth Investor Buy List. Since then, NVDA stock has been on a tear, and members of Growth Investor are now sitting on a whopping 3,300% gain!
The reason behind Nvidia’s stunning growth?
Its AI chips.
Back in March 2022, Nvidia unveiled the Hopper chip. It was a significant advancement in GPU technology, specifically designed to meet the growing demands of AI computing.
So, it’s no surprise that roughly $19.4 billion of the company’s $26 billion in revenue from its most recent quarter can be attributed to Hopper.
Then, before we knew it, ChatGPT launched in November of that same year, and the AI Revolution truly took off.
The rest, as they say, is history.
To stay ahead of the competition, Nvidia introduced Blackwell in March. This is a brand-new GPU that is set to succeed Hopper. It is reportedly 2.5 times faster and 25 times more energy efficient.
In other words, it’s a game-changer.
What sets the Blackwell GPU apart is that it is for generative AI, which is “machine learning.”
Nvidia’s AI chip competitors – including Intel and Advanced Micro Devices (AMD) – are not experts in machine learning. They are primarily developing chips for AI devices that optimize correlating data sets to learn preferences and habits rather than machine learning to solve problems and provide solutions.
So, Nvidia effectively has a monopoly.
And as it develops even more powerful GPU successors to Blackwell, I do not expect any competitor to “crack” that dominance.
I should also add that demand for Blackwell has been insatiable, with Big Tech names like Microsoft and Meta Platforms lining up to get all they can get their hands on.
It’s reported that Blackwell is sold out for the next 12 months. So, once these new chips are in full production – and in peak demand – the company’s business is set to explode even further.
This leads me right into why NVDA is the stock of the decade…
Why NVDA Is the Stock of the Decade
Through the end of this decade, the transistors in each of Nvidia’s chips will be approaching the “atomic” level, so sheer physics may prohibit it from making its chips any faster.
So, looking beyond this decade, Nvidia plans to use quantum computing. This is a form of computing that essentially uses 1s AND 0s to perform calculations instead of a 1 or a 0, like traditional computing.
Now, quantum computers have traditionally been cost-prohibitive except for government agencies and some universities.
But I predict Nvidia will help lead the charge to a breakthrough in this field to help speed up generative AI after its GPUs hit their physical limits. In fact, Nvidia has a quantum cloud simulator up and running right now.
The point is that Nvidia is miles ahead of the competition.
Now, I must disclose that Nvidia is grossly overweighted in my portfolios. But I have no intention of recommending selling this stock anytime in the next few years.
Eventually, companies do lose their “edge.” Another more innovative company comes along with a better product and eats their lunch.
But I don’t see that happening anytime soon with Nvidia.
To put it bluntly: I have never found a company as monopolistic and as powerful as Nvidia.
Since the company is expected to dominate generative AI GPUs with virtually no competition in sight, I think it’s worth holding the stock through the end of the decade.
And even after that, I expect Nvidia to shift gears and then dominate quantum computing to further speed up generative AI.
A New Wave of the AI Revolution
That being said, no investor can afford to buy one stock and stand pat… even if it’s the stock of the decade.
The good news is that I predict we’re going to see the AI Revolution broaden out as we enter the second half of this decade.
That’s because the AI Revolution is only just getting started.
Starting in 2025, I predict we’re going to see the debut of new, much more powerful “thinking” AI models – models capable of reasoning in addition to pattern recognition. And once they are released to the public, they will drastically change the economic landscape, much like the internet did in the late ‘90s – only faster.
This second wave will be the new driving force of AI. And it’s going to be one of the most disruptive events we’ve witnessed. It will unleash incredible efficiencies and economic activity.
But it will also usher in layoffs and lead to an even further widening of the wealth gap in America.
I don’t want you to be one of the “have-nots” in this brave new world, which is why I teamed up with my InvestorPlace colleagues Luke Lango and Eric Fry to record a brand new presentation to tell you everything you need to know…
We also put together a portfolio of the best “new wave” AI Revolution stocks to buy now.
By my estimation, you have less than 1,000 days to make as much money as possible from this disruptive force – so time is of the essence.
Click here to watch the presentation now.
Sincerely,
Louis Navellier
Editor, Market 360