Investing legend Marc Chaikin has come forward with a warning that will make him the most unpopular man in financial media.
He's recommending we sell three of the most popular stocks in America and in their place buy into a “100x Starburst Opportunity” Stock for the coming AI tipping point.
The Teaser
Marc isn't merely talking about a new model release of ChatGPT or the latest AI agent from Elon Musk’s Grok.
Trader, stockbroker, analyst, and founder of the Chaikin Power Gauge stock-rating system, which we have reviewed here, Marc has done it all on Wall Street.
This teaser starts off in opposite fashion to others we have seen lately, like Jim Rickard's AI Meltdown, as it boasts not about a reevaluation of AI expectations, but about it being on the verge of a breakthrough “from simply thinking and reasoning to acting of its own free will,” without human input.
There have been hints about this in the media as of late, with the latest large language model (LLM), Mythos 5, from generative AI company Anthropic being held back from widespread commercial release.
At the moment, only 11 tech companies, the world’s biggest banks, and the NSA have access to it.
This has been painted solely as a precautionary measure over cybersecurity concerns, as it is thought to be able to exploit software vulnerabilities.
However, Marc mark believes the real reason goes much deeper.
He explains that most of the AI we are familiar with is called “narrow AI.” Meaning it can perform a narrow range of functions based on the data it was trained on.
The breakthrough currently being held back is known as “frontier AI.” These are multimodal models that can reason, perform an ever expanding range of actions, from coding to driving a car, and even possess free will.
Mythos figuring out how to break itself out of its sandbox and email one of Anthropic's researchers while he was off in Bali celebrating a friend’s wedding is an example of this.
Marc likens it not to a leap from horse-and-buggy to automobile, but from horse-and-buggy directly to time travel and it's due to arrive sometime this year.
Once it's out of the lab, we could enter the most accelerated period of wealth creation that humankind has ever known.
The Pitch
Marc has created a full investment brief on the best company to own during this time of mega disruption titled: 100X Starburst Opportunity: The #1 Stock to Buy Now for the Age of Frontier AI.
It can be ours, but only if we give Marc's Power Gauge Report a try. A one-year subscription costs $149 (normally $499) and it comes with access to the Power Gauge Rating System, a couple bonus reports, and a 30-day money-back guarantee.
What in the World is a Starburst Opportunity?
The term was first coined in 1987 and it has been the subject of multiple academic studies over the decades.
It's when a company owns multiple operating businesses and the market struggles to understand the sum of the parts. Since complex companies are hard to value, the market tends to price them for less than they are intrinsically worth.
Folks, this is the good ol' “conglomerate discount” and it's one of the most reliable inefficiencies in the stock market.
Peter Lynch was fond of such plays, as should any catalyst emerge, such as a spinoff, asset sale, or an acquisition, the stock could experience a rapid “re-rating,” as he called it.
This is where Marc's “Starburst Opportunity” comes in, which he calls…
The most coveted and often the most lucrative type of spinoff in existence
A “Starburst” splits up a company from a single entity into many entities, unlocking the full value of each one, while allowing us to double or even triple the number of shares in our possession.
This of course is a spin-off, which is when a profitable division with lots of potential upside becomes a new standalone entity by separating it from the current parent company.
Marc says he hasn't seen one of this magnitude happen for quite a while. But when it does happen, the gains can be astronomical.
GE, which initiated a restructuring in 2021, is cited as a prime example.
The Dow component, which has been around since 1892, split into three independent, publicly-traded companies – GE Aerospace (NYSE: GE), GE Healthcare (NYSE: GEHC), and GE Vernova (NYSE: GEV). Everyone won, especially those who held onto the GE Vernova shares they were granted, which are up more than 700% since it's spin-off in 2024.
Now, one frontier AI stock is a strong candidate for a historic “starburst” and, based on Marc's research, it could unlock far more value for investors than GE.
Revealing Marc Chaikin's “100X Starburst Opportunity” Stock
One stock, access to up to 3 “starburst” companies.
Marc believes this is hands-down the best investment anyone can be in right now. Here is what we know about it:
- The U.S. government is currently in court with this company attempting to break it into separate entities on antitrust grounds.
- When you buy shares in this company, you can benefit from it’s 6% ownership stake in SpaceX and 14% equity stake in Anthropic.
- This stock also holds a coveted spots inside Project Glasswing, giving it early access to the restricted Claude Mythos 5 AI model.
Marc is talking about none other than Alphabet Inc. (Nasdaq: GOOG).
- Alphabet's Google has been accused of and found guilty of illegally monopolizing the adtech market the US and Europe.
- Alphabet owns direct equity stakes in both SpaceX and Anthropic worth roughly $130 billion and $135 billion, respectively.
- Alphabet is part of the Glasswing consortium, along with Microsoft, Apple, and others.
As for the three popular stocks to sell…
First Stock to Sell
The first is Tesla Inc. (Nasdaq: TSLA).
With the reasons cited as “Chinese competition, slowing demand for its cars, and the delayed rollout of robotaxis and humanoid robots.”
“Boring” car parts supplier Magna International Inc. (NYSE: MGA) is recommended in its place.
Second Stock to Sell
Another tech heavyweight, Oracle Corp. (NYSE: ORCL).
The reason: “It went from a dependable software and cloud services company to a freewheeling architect of the data-center boom.”
Worse yet, it hitched it's wagon to OpenAI, a customer that may not be able to pay for the services (data centers), Oracle is providing.
Fabrinet (NYSE: FN) is recommended instead, which makes hardware that AI runs on, such as transceivers, photonic systems, and fiber optics.
Third Stock to Sell
Last, but not least, Marc is recommending we get out of dodge when it comes to Netflix Inc. (Nasdaq: NFLX).
It is facing infinite competition armed with frontier AI that dramatically lowers the barrier to entry for quality content creation.
Beat the Market 3 to 1?
More noise, less signal.
Longer trading hours, more markets and assets, there's more noise than ever before. But there remains some clear signal.
One of these is spin-offs, which have reliably outperformed the S&P 500 dating back more than 60 years.
Even The Wall Street Journal noted that spin-offs have outperformed the S&P by as much as 3 to 1 since 2008.
The key is to own a diversified basket as part of a special situations investing operation.
That brings us to Alphabet, is it really the best investment we can make right now?
From both a value and growth perspectives, no.
There are quality businesses trading for less than 27x current earnings and at a market cap of $4.3 trillion, there are also plenty that will experience faster growth.
Alphabet is vertically integrated across the AI stack, from custom chips to wholly-owned data centers, and frontier large language models (Gemini). This leaves it both vulnerable to a reevaluation of AI expectations over the short/mid-term and well positioned to emerge as the ultimate winner over the long-term.
Beating the market 3 to 1 with Alphabet from here on out is a tall ask, but a split up would increase the odds.
Quick Recap & Conclusion
- Investing veteran Marc Chaikin is recommending we sell three of the most popular stocks in America and in their place buy a “100x Starburst Opportunity” Stock for the coming AI tipping point.
- That tipping point could be the widespread release of Anthropic's latest LLM, Mythos 5.
- We could be entering the most accelerated period of wealth creation ever and Marc has created an investment brief on the best company to own during this time of mega disruption titled: 100X Starburst Opportunity: The #1 Stock to Buy Now for the Age of Frontier AI. To get it we'll need a subscription to the Power Gauge Report newsletter, which costs $149 upfront for the first-year (normally $499).
- Before you could hit the subscribe button, we were able to reveal Marc's “100x Starburst Opportunity” Stock for free as Alphabet Inc. (Nasdaq: GOOG). We also got Marc's three stocks to sell: Tesla Inc. (Nasdaq: TSLA), Oracle Corp. (NYSE: ORCL), and Netflix Inc. (Nasdaq: NFLX).
- Alphabet could get broken up into multiple companies, which bodes well for it outperforming the market over the long-term.
Are we at an AI tipping point or crash point? Let us know which side you're on in the comments.