Managing Editor’s Note: Tomorrow, our friend over at The Opportunistic Trader, Larry Benedict, is revealing one of his favorite strategies for profiting from volatile markets.
It’s the same strategy he used to make more $95 million in verified profits for his clients during the 2008 financial crisis.
And now, he’s leveraging it to help his readers profit from the swings – both up and down – that we’ve been seeing as markets respond to all the uncertainty and change going on right now.
Larry’s sharing his strategy as well as what is prompting these windows of opportunity in a special briefing tomorrow afternoon at 2 p.m. ET. You can go here to automatically sign up to attend.
Yesterday, we explored one of the hottest trends in software, vibe coding, in The Bleeding Edge – Are You Vibing Yet?
In the issue, we covered the recent acquisition of Base44 by Wix (WIX) for $80 million, plus additional earn-outs through 2029 to the Base44 team.
What makes the story remarkable is that Base44 has just a single founder and only eight employees, is profitable, generated $3.5 million, and was only in business for six months at the time of the acquisition.
As I said yesterday, it sounds impressive because it is impressive.
Vibe coding is all the rage right now, enabling non-programmers to “program” things like websites, software applications, and process automation not by writing code, but simply by telling an artificial intelligence (AI) what they want.
Before the generative AI boom, this trend was known as “no coding,” and with the newfound powers of generative AI, it has morphed into something far more capable.
Base44 was an attractive acquisition for Wix. And other companies that I mentioned – like Replit (now worth $3 billion), Bolt (also known as Stackblitz, now worth $700 million), and Lovable (now worth $1.5 billion) – are on larger software companies’ radars.
But this was only one side of the story.
These examples that I used for vibe coding software are primarily for non-programmers or those early to programming. These companies, and others like them, have enabled basically anyone with decent computer skills to program software without having to write a single line of code.
The even bigger development is the impact that generative AI is having on the entire software industry, specifically when utilized by experienced programmers.
Vibe coding is like a magic wand for a wide range of software programming tasks that used to consume millions of hours, wasted in drudgery.
And the biggest software development tool designed for programmers in this space is Cursor. Its meteoric rise in use is jaw-dropping.
Cursor empowers software programmers with generative AI to do things like: writing code, debugging software, compiling software, using agentic AI for automating programming tasks, and a lot more.
Cursor Screenshot (Code on left, gen AI on right) | Source: Cursor
For anyone familiar with software programming, this will make immediate sense. And in practice, the numbers tell a ridiculous story of rapid adoption:
The examples are endless. And at an even higher level, more than 90% of all software engineers are using at least one vibe coding platform to assist with their work daily. The adoption rate should be close to 100% before the end of this year.
As I’ve said many times, don’t let anyone fool you into believing that the adoption of AI isn’t already widespread. It is, in many industries. And two factors make this trend the most extraordinary example of exponential growth that I’ve ever seen:
Which is what takes us back to Cursor and the company behind this amazing software development environment. Cursor was developed and launched in 2023 by an artificial intelligence research lab known as Anysphere.
And get this, aside from the adoption numbers that I shared earlier:
So what’s a business like this worth? Well, we just found out.
Just this month, Anysphere raised $900 million at a $9.9 billion valuation.
Think about that. Anysphere was formed in 2022 and launched its first product, Cursor, in 2023. Anysphere went from a seed round valuation of $43 million to a $9.9 billion valuation in less than three years.
That is how fast value is being created using AI. Great products generating incredible revenues in record time.
It’s these kinds of examples that make it easier to understand that the AI infrastructure boom in building data centers isn’t going to slow down. It will continue to accelerate. Literally, the largest chokepoint in acceleration is the production of energy for the data centers.
How is this rate of adoption possible? And for that matter, what was the secret to Cursor’s success to date?
The simple answer is that these vibe coding companies are creating a product for which there is incredible demand. Their products also provide incredible utility to the users, regardless of whether or not they are a non-programmer or an experienced programmer.
They are creating something that simply didn’t exist before. This is an entirely new market and product class.
The more specific answer regarding Cursor is more interesting:
How is the last bit possible? Simple, under its open-source license, VS Code is free and customizable for both private and commercial use.
This was such a smart move by the Anysphere team. By forking VS Code and then integrating generative AI, it gave software programmers the same look and feel that they were used to, with the added superpowers of generative artificial intelligence.
Anysphere pays nothing for its open-source VS Code software from Microsoft, and it’s now worth $9.9 billion. Brilliant! And now Microsoft is making a very poor effort at trying to catch up with Cursor. Microsoft is way behind, and it won’t be able to catch up.
Regular readers will likely be thinking… Microsoft will just snatch up Anysphere and Cursor as soon as possible. And while I agree that’s logical, I believe it’s also extremely unlikely.
Cursor’s adoption is way too widespread now. Any attempt by Microsoft to acquire Anysphere would get into deep trouble with antitrust regulations.
I sure hope that Anysphere doesn’t agree to a “stealth acquisition” like others we’ve covered before in The Bleeding Edge issues like Amazon’s AI Strategy Unfolds and Another Stealth “AI Acquisition.”
We don’t need another case where the larger company acquires part of the company, takes all of the key talent, and lets the original entity focus on some smaller mission… all to avoid antitrust issues.
Opportunities are everywhere right now. Companies that are aggressive in adopting AI have great upside. Companies that buy innovative AI startups and integrate them effectively have great upside.
And large multibillion-dollar companies like Anysphere with incredible revenue growth and even free cash flow have a fast path to an IPO.
We’re definitely along for the ride.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
