It hasn’t fully taken off yet, but artificial intelligence, or AI, is going to be a major part of our everyday lives. Getting in now can mean big profits for investors down the road.
As the saying goes, “the early bird gets the worm.”
And while the and axiom applies to a lot of things, it most certainly works for investing in the stock market. If you can beat the herd, you can profit big.
Just ask anyone who invested in Microsoft Corp. (Nasdaq: MSFT) in the late 1980s when its initial public offering launched at $21 per share.
Including price appreciations and dividends, if you invested $1,000 in Microsoft stock in 1986 and just held onto it, you’d be sitting on close to $2 million today.
And that’s where artificial intelligence comes in today.
In the AI sector, this is 1986 for a lot of companies. In 20 years, investors who got in on the ground floor will have massive gains to tell their kids and grandkids about.
Where is the AI Market Going?
According to Banyan Hill Publishing’s Charles Mizrahi, the AI market is poised to be massive in the near future.
“The AI market is huge — and it’s growing bigger every year,” said Mizrahi, the Editor of Alpha Investor Report. In fact, research shows AI could add $15.7 trillion to the world’s global supply over the next decade.
Mizrahi, who specializes in value and long-term investing opportunities, is recommending AI stocks to his readers, said getting in now as an investor and hanging on to AI-related companies — especially when they are discounted due to market volatility — means big profits down the road.
“When stock prices bounce around based on people’s emotions and not business fundamentals, great companies get severely mispriced. That’s the time to back the truck up and load it with great companies,” Mizrahi said. “Especially when you can buy stocks that are at the forefront of huge trends measured in terms of decades — not months. Meaning the volatility that happens over the short term is nothing more than noise.”
How’s Our AI Portfolio Doing?
Back in December, we told you about “5 Artificial Intelligence Stocks to Watch in 2020.” All five of the companies we talked about continue to have major potential.
That can be growth, expanded dividends or established leadership in artificial intelligence, and they all bring something to the table
As of now, three of those five stocks are in the green, despite a lot of the tech market being down due to the coronavirus pandemic.
Our big winner so far is Nvidia Corp. (Nasdaq: NVDA). When we told you about Nvidia, it was trading at around $210 a share. Now, the company’s stock has jumped nearly 40% to around $293 a share as of today.
We also told you about a big player in computing and, subsequently, artificial intelligence — Intel Corp. (Nasdaq: INTC).
When we recommended Intel, it was going off at around $57 per share. That price has jumped to around $60 per share. Tack on a $1.32-per-share dividend and you’d be looking at a 6.5% gain right now.
The third winner we told you about was Salesforce.com Inc. (NYSE: CRM). This is a company providing customer relationship management software in the cloud.
At the time of our recommendation, Salesforce was at $161 a share. Now, it’s $162 a share for a 0.7% gain. I know that doesn’t sound like much, but considering how bad teh coronavirus stock market crash was, a gain is a gain.
The bottom line here is that artificial intelligence is going to be one of those sectors that you’ll kick yourself in 20 years for not investing in now.
Just think of how many people had the chance to invest in Microsoft back in 1986 and passed it up — or Amazon.com Inc. (Nasdaq: AMZN) a decade ago.
AI is going to take off in a massive way.
And Mizrahi is right. As an investor, now is the time to really do your homework and get in on the ground floor. You’ll see big profits in due time.