The new kings of artificial intelligence.
Market insider Jason Bodner believes they will be crowned by a futuristic light-speed device that's turning AI into “Accelerated AI” and also handing a small group of stocks greater gains in a single year than the entire AI boom.
The Teaser
According to some in the media, the big money has already been made and the AI trade is over.
A Wall Street derivatives guy at Cantor Fitzgerald and Jeffries, Jason gone on to start his own investment research firm focused on unusual institutional moneyflow, while also moonlighting for several investment newsletter publishers.
We have previously reviewed his and Jeff Brown's Secret AI Stocks and Brownstone Research's Quantum Computing Stocks teasers.
In this one, Jason not only denounces the AI-doomer view, but he is adamant that the biggest gains still lay ahead.
His confidence comes from the radical device that is supposed to “accelerate” AI, making it 100x faster, more efficient, and less energy intensive.
Apparently, it follows a pattern that has already played out twice in the last 30 years.
The first time was in the latter part of the 90s with the advent of the internet, which set off the dot-com boom, sending the Nasdaq soaring by more than 500% in just four years.
We all know what happened next…
The dot-com bust, with the Nasdaq falling a whole 77% from its peak between 2000-2002.
However, what happened after the boom and subsequent bust is less obvious, but much more profound.
A period of resurgence followed, with the emergence of smart phones, social media, and e-commerce driving exponential technological growth from 2003- 2015.
It follows an “acceleration curve,” where the second wave of growth is much larger than the first.
Jason believes the same pattern is repeating again today with artificial intelligence.
ChatGPT's launch in November 2022 kicked-off the initial growth phase, we're now in the temporary decline phase, which is where “accelerated AI” comes into play.
It's set to re-wire artificial intelligence from the ground up and in Jason's words “kick-start a whole new phase of growth.”
The Pitch
Everything about this “light-speed” technology along with the best ways to play it have been compiled inside a new report called Accelerated AI: 3 Stocks to Buy for the Next Wave of AI Boom.
Access requires a subscription to Brownstone's Inflection Point research service, which costs $179 upfront for the first year (normally $499) and includes a full 30-day money-back guarantee.
What in the World is “Accelerated AI”?
Light traveling through hair-thin strands of glass.
This is what saved the internet from demise and it's what is going to save AI too.
See, back in the not-so good ol' days of 56kbs dial-up, the internet ran on copper wires, which were only ever meant for voice communications.
To move beyond heavily pixelated images that would take ten minutes to load, telecom companies spent more than $500 billion laying fiber-optic cable all over the world.
80 million miles of them to be exact.
Once this underlying infrastructure was in place, internet speeds jumped from 56 kbs to 1 gigabyte per second. A 20x improvement.
The same thing happened when smartphones were first released in 2007. Mobile internet was still painfully slow and copper wire towers had to be replaced with fiber to take it from 4 megabytes to over 1,000 megabytes.
Now, the same upgrade is coming to AI.
Photonics For The Win
Jason isn't talking about fiber cables under oceans or around cell towers.
Instead, he's referring to microscopic laser beams replacing copper wiring inside chip clusters that power every AI model on the planet.
According to Jason, it's about to “change the entire tech industry all over again.”
Think about it like this, inside every data center sits server racks with hundreds or even thousands of chips. These chips communicate with each other via copper wires carrying electrical signals.
However, this setup consumes more bandwidth than a professional PC gamer and generates way too much heat.
“Aceelerated AI” or photonics is the solution.
Nothing in the known universe travels faster than light and even with latency, fiber-optic light travels at 124,000 miles per second. By comparison, electrons over copper wire move at only 1% of this speed.
It's a big deal and a few companies at the center of the photonic chip evolution are set for windfall profits.
Revealing Jason Bodner's Accelerated AI Stocks
Copper to light.
It's the next great tech infrastructure upgrade and Jason has found a few ways to play it.
First Accelerated AI Stock
Jason calls it “the company all the others depend on” and directly names it in his video presentation.
It's Broadcom Inc. (Nasdaq: AVGO) and it does three things every AI player relies on:
Second Accelerated AI Stock
- Without this company, chip clusters wouldn't be able to communicate with each other.
- Nvidia recently partnered with it to connect the chips inside it's data centers.
- It's 10x smaller than Broadcom.
Based on the overview and size marker, Advanced Micro Devices Inc. (Nasdaq: AMD) is the logical choice.
- AMD is a well-known supplier of networking solutions, including it's Aurora IP for chip to chip communication.
- There are only so many companies around that are valued at around $800 billion (10x smaller than Broadcom) and in this line of business, AMD is one of them.
Third Accelerated AI Stock
- It's one of the purest photonic plays in the market.
- This company makes the hardware that photonics relies on.
- It recently launched a product that cuts networking power use by 70%.
Coherent Corp. (NYSE: COHR) fits the description.
- Coherent is a pure-play business in the photonics, optical networking, and laser technology space.
- It launched Linear-drive Pluggable Optics (LPO) transceivers that proport to reduce energy consumption by as much as 70%.
Fourth Accelerated AI Stock
- It builds the parts that turn electrical signals into light.
- This company has been on an acquisition binge, buying up smaller photonics firms.
- Nvidia CEO Jensen Huang has called it “the next trillion-dollar company.”
Jason's final pick is Marvell Technology Inc. (Nasdaq: MRVL).
- Marvell has made four major photonics acquisitions in the last five years in Inphi, Innovium, Celestial AI, and Polariton.
- Besides investing $2 billion into Marvell, Jensen Huang called it “the next trillion-dollar company” onstage at a conference.
Profits at the Speed of Light?
If history is any guide, Jason says we could be looking at 3x, 5x, even 10x gains from here.
He is right about two things:
First, energy is AI's biggest bottleneck. Optical technologies like photonics don't solve this issue, but any hardware that helps “accelerate” performance while also reducing energy consumption is a must have.
Second, as a critical hardware component, suppliers will benefit no matter what frontier model or hyperscaler eventually comes out on top in the AI race.
However, looking at Jason's accelerated stocks and more specifically their valuations. It appears to me that the temporary dip portion of the acceleration curve is still to come.
The lowest current earnings multiple among the quartet is Marvell at 66x, which is more than double today's already high median S&P 500 P/E ratio of 28x.
The good news is photonics ETFs selling at or near net asset value (NAV), such as Tuttle Capital's Pure Play Photonics (Nasdaq: FOTO), are plentiful, and so are smaller, listed photonics hardware component makers, if diving into the corners of the market is more your thing.
Quick Recap & Conclusion
- Market insider Jason Bodner says a futuristic light-speed device he calls “Accelerated AI” will kick-start a whole new phase of AI growth.
- What Jason calls “Aceelerated AI” is actually photonics. The science of generating, detecting, manipulating, and directing light at the particle level, which is now being applied to make AI hardware faster and less energy intensive.
- Jason has found the best ways to play it, which have been compiled inside a new report called Accelerated AI: 3 Stocks to Buy for the Next Wave of AI Boom. Access to it requires a subscription to Brownstone's Inflection Point research service, which costs $179 upfront for the first year (normally $499).
- We were able to reveal most, if not all, of Jason's “Accelerated AI” Stocks for free. They are Broadcom Inc. (Nasdaq: AVGO), Marvell Technology Inc. (Nasdaq: MRVL), Advanced Micro Devices Inc. (Nasdaq: AMD), and Coherent Corp. (NYSE: COHR).
- Marvell is the least expensive of the four at a current P/E of 66x, suggesting that the dip portion of the acceleration curve is still yet to come.
Is photonics the fiber-optic cable of AI? Leave your thoughts in the comments.