Elon Musk's Department of Government Efficiency (DOGE) has been slashing and burning costs like a middle-market business that was just purchased by a private equity fund.
Market specialist Rob Spivey believes we’re going to see a dramatic acceleration of the DOGE agenda, with some fallout, and some “Hidden Alpha.”
The Teaser
DOGE has dominated the news cycle for weeks, but this is the first I've heard of a “DOGE collapse” and “DOGE millionaires.”
CFA, analyst, and (assistant) portfolio manager Rob Spivey specializes in using his experience in the credit and equity markets to provide differentiated, alpha-generating research.
This is our first time reviewing one of his teasers, so we are learning just like you. But it does remind us of some sensationalist teasers we have seen in the past, such as Jim Woods’ “China Shock” Stocks, and Nick Giambruno's “QE Infinity.”
Rob has been a Musk-watcher for a decade, and feels like his true plan could be far more radical and economically motivated than anyone realizes.
See, beyond altruistically tackling bureaucratic waste, Elon's also “hellbent on doing something else that could forever change life in America.”
This has everything to do with becoming “the supreme authority on Artificial Intelligence.”
The U.S. of A.I.
Rob points to a few moves as proof of Elon’s true agenda…
The first is DOGE's development of “GSAi,” a custom, ChatGPT-like chatbot built specifically for government use.
Second, DOGE's access to both the U.S. Treasury and the IRS’s central payment and information systems gives it unprecedented access to private data that can be fed into any kind of AI training system.
Finally, House Speaker Mike Johnson's words about being “able to transform the way the federal government works at the end of this” are telling.
To sum it up, the “DOGE Collapse” Rob talks about is huge, archaic data piles from all 441 federal government agencies going into a centralized database.
This is creating a once-in-a-lifetime opportunity, as an exclusive list of companies are perfectly positioned to service the White House’s new “AI-first” strategy.
The Pitch
A special report titled “Get Rich in the U.S. of A.I.” gives us all the details on which companies we need to own.
The financial research firm Altimetry has put all of its best ideas and stock picks, as well as this research report, into a monthly stock research service called Hidden Alpha. A membership typically costs $499, but right now, it's going for $129.
Getting Rich in the ‘U.S. of AI'
By now, one thing should be clear…
Artificial intelligence is central to the federal government's plans.
From driver's licenses, IDs, and passports being entirely handled and approved by AI to Social Security benefits being calculated and paid out automatically using AI.
AI will be at the heart of every bureaucratic function.
Rob says this is “making the stock of AI companies the federal government recruits to make this a reality go up further and faster than any other stocks in America.”
This is already happening to one degree or another.
For example, Palantir Technologies (Nasdaq: PLTR) has received several huge government contracts to roll out AI technology inside the Pentagon.
As a result, its stock is up more than 300% over the past year.
But Palantir is far from the only one.
Another example is Modine Manufacturing (NYSE: MOD). After landing a major government AI contract in 2024, its stock shot up more than 70%.
Overall, federal government spending on AI-related contracts has massively increased, and they now make up 66% of total federal IT spending, as of the first half of 2024.
Two memoranda from the White House Office of Management and Budget, Accelerating Federal Use of AI through Innovation, Governance, and Public Trust, and Driving Efficient Acquisition of Artificial Intelligence in Government, have shifted U.S. AI policy to promote a “forward-leaning, pro-innovation, and pro-competition mindset.”
The acceleration of the “U.S. of AI” will make some people rich, and we have a shot at being one of them if we make the moves Rob lays out.
Revealing the Hidden Alpha AI Stocks
A few clues are supplied about each AI stock pick.
1st Hidden Alpha Stock
- One company says right on their website, “We want to win 100-0… not 51-49.”
- It once camouflaged an entire factory in Burbank, California, with 53,000 employees inside.
The second clue gave it away: it's Lockheed Martin Corp. (NYSE: LMT).
- During World War II, Burbank's Union Airport and Lockheed Martin's aircraft plant were camouflaged to make it appear as a sparsely populated rural area.
2nd Hidden Alpha Stock
- This company is already partnered with Tesla. It supplies tech that Elon wants rolled out for pretty much every Tesla customer.
- It has roughly 24,000 staff with secret or top-secret government clearance.
A few companies match this description, including ON Semiconductor Corp. (Nasdaq: ON) and Garmin Ltd. (NYSE: GRMN), both of which are Tesla suppliers providing critical in-car devices and have around 22,000 employees.
3rd Hidden Alpha Stock
- Another company on the “xAI Colossus shortlist.” It employs a huge team of lobbyists. Dozens of them previously held important government jobs: from the Senate to the Department of Homeland Security.
So an xAI partner/supplier that also spends big on lobbying…Oracle could have slid into this spot, but its server deal with xAI fell through.
Another tech giant that spends heavily on lobbying is Intel Corp. (Nasdaq: INTC), and its Xeon processors help power xAI's Colossus supercomputer.
4th Hidden Alpha Stock
- This company is helping fuel the AI revolution, it is located in the Permian Basin, on a defunct 19th-century railroad.
- Until recently, it didn't even qualify to be listed on the major stock indexes.
The pick here is Texas Pacific Land Corp. (NYSE: TPL).
- The Wall Street Journal recently ran a piece mentioning its defunct 19th-century railroad roots, and TPL joined the S&P 500 last year.
5th Hidden Alpha Stock
- This company has vast ties to rich natural gas deposits and a long list of government connections.
- The U.S. Department of Energy just granted it $30 million in funding, which is expected to balloon all the way to $925 million.
Rob is referring to the Biden-era Appalachian Regional Clean Hydrogen Hub (ARCH2), which received $30 million of up to $925 million to begin Phase 1 of its plan.
More than 40 public and private companies are involved in it, but the clear standouts are EQT Corp. (NYSE: EQT) and Enbridge Inc. (NYSE: ENB).
The Best Way to Get Rich from AI?
Rob is on the right track here.
His picks are a blend of basic infrastructure (land), energy providers that power AI, and critical semiconductors that process data.
Of his two confirmed “Hidden Alpha AI Stocks,” Texas Pacific Land Corp. is the superior pick.
Its valuation is backstopped by nearly 1 million acres, and the company is a model of efficiency, producing more than $100 million in annual revenue with only around 100 employees.
At this initial stage, buying into the AI supply chain is the best long-term move we can make. That is, until the next stage kicks off and innovators begin building on the infrastructure being laid now.
The teaser started as clickbait, but in the end, Rob surprised by laying out a clear roadmap for investing in AI and made some solid picks.
Quick Recap & Conclusion
- Market specialist Rob Spivey believes we’re going to see a dramatic acceleration of the DOGE agenda, with some fallout, and some “Hidden Alpha.”
- The “DOGE agenda and “Collapse” Rob talks about is huge, archaic data piles from all 441 federal government agencies going into a centralized database. This is creating a once-in-a-lifetime opportunity, as an exclusive list of companies is perfectly positioned to service the White House’s new “AI-first” strategy.
- A special report titled “Get Rich in the U.S. of A.I.” gives us all the details on which companies we need to own. A membership typically costs $499, but right now, it's going for $129.
- Rob had a total of five “Hidden Alpha AI Stocks.” Two of the five are Lockheed Martin Corp. (NYSE: LMT) and Texas Pacific Land Corp. (NYSE: TPL). The remaining three, we made some unconfirmed calls on.
- Of the two confirmed “Hidden Alpha AI Stocks,” Texas Pacific Land Corp. is the superior pick, as it is backed by valuable land and is a low-cost, high-margin operator.
What AI supply chain stocks do you like best? Share them with readers in the comments.