• We’re witnessing a “changing of the guards” in the semiconductor industry
  • This company’s tech could be world-changing. And hardly anybody knows about it…
  • Take a look at this awesome delivery robot

Dear Reader,

I wanted to say thank you to those of you who took the time to join me for my Timed Stocks Accelerated webinar last night.

There are so many incredible technological developments happening right now. We are investing in and profiting from things like 5G wireless technology, artificial intelligence, machine learning, cloud-based software solutions, the future of transportation, and – of course – personalized medicine and biotechnology.

This last category – early stage biotechnology companies – is one of my favorite trends for the next several years. This is the hottest area of tech right now, partially due to COVID-19 and partially due to the bleeding-edge technology that the best biotech companies are now utilizing.

Biotechnology companies are dominating the initial public offering (IPO) market this year. As I write, 55% of all traditional IPOs this year have been biotech companies. That’s astounding. And this is creating some of the most exciting investment opportunities in the market today.

And because these companies go public when they are small, it is one of the very few areas of the stock market that still provides the kinds of investment opportunities that we used to have 20 years ago.

After all, who wants to invest in Uber at an $80 billion valuation? There’s far more upside investing in these early stage biotech companies trading at sub-$1 billion valuations. And that’s where my pipeline of “timed stocks” resides.

If anyone was interested but unable to make the event last night, you can view the webinar here.

Tomorrow, I’ll tackle the mailbag as usual.

And speaking of biotech and COVID-19, a clinical trial run by the National Institutes of Health using Moderna’s COVID-19 vaccine candidate just released results. And they were positive.

It was a Phase 1 clinical trial designed to test the vaccine in just 45 healthy volunteers between the ages of 18 and 55. The testing was done at three different dosing levels.

As a reminder, Moderna’s approach is to use messenger RNA to stimulate the body to produce COVID-19-fighting antibodies. In the case of this trial, all of the volunteers produced more antibodies than have been seen in patients who have recovered from COVID-19. But a second injection was required a few weeks after the first to get a stronger immune response.

While that might not sound positive, it is. In a Phase 1 trial, the goal is really about testing for safety. Researchers want to ensure that the vaccine doesn’t cause harm. It is normal to start at low dose levels for that reason – hence the second injection.

Moderna and others will be able to take this data and use it to inform more appropriate dosing levels in the Phase 2 and Phase 3 trials that start at the end of this month. This is all very promising progress and certainly cause to be optimistic.

NVIDIA is now the world’s most valuable chipmaker…

It just happened.

NVIDIA (NVDA) has overtaken Intel as the world’s most valuable semiconductor company with a market capitalization of $250 billion. That’s right – NVIDIA is now worth a quarter of a trillion dollars.

This is an incredible development. After all, NVIDIA was considered to be just a niche player focused on gaming applications just a few years ago.

I first recommended NVIDIA at a Bonner & Partners private retreat at Rancho Santana, Nicaragua, back in February 2016. The stock was trading around $24 per share at that time. And the entire company was worth about $10 billion.

I told attendees that NVIDIA represented the future of the semiconductor industry. I outlined how NVIDIA’s products were the most critical piece of hardware required to fuel the explosion in artificial intelligence and machine learning. I even outlined why NVIDIA’s strategy for producing a system for self-driving cars was also important for its future.

In other words, NVIDIA was perfectly positioned for massive trends that were already in place but very few were talking about. And for that reason, I told attendees that NVIDIA was the perfect high-tech investment for family money. There was little risk of downside and incredible room for growth.

Some of the attendees were skeptical at the time. After all, NVIDIA’s GPUs were mostly known for their use in gaming computers at the time. How could this company produce 10x-plus returns? Even Bill Bonner himself seemed unsure about my presentation on artificial intelligence.

But today, NVDA trades around $407. Investors who followed my original recommendation and held on are sitting on gains of roughly 1,600%. Not a bad four-year run.

So how did this upstart chipmaker unseat Intel in just a few short years?

Simple. NVIDIA got the big trends right.

The semiconductor industry has migrated toward graphics processors, high-performance computing, and artificial intelligence (AI). These are the highest growth sectors of the semiconductor industry. And NVIDIA has been dominant in each of these areas.

Meanwhile, Intel completely missed the shift.

It’s not a player in any of these high-growth segments. But it has been trying to acquire companies in the space to make up for its missteps. It bought a great early stage AI company called Nervana Systems back in August 2016. That was a company I was following closely.

But Intel completely botched the acquisition. It was never able to commercialize Nervana’s tech. It went so badly that Intel shut down the Nervana division entirely earlier this year. And that caused Intel to go out and buy another AI semiconductor company recently, Habana Labs… we’ll see how that one goes.

In fact, the only area of Intel’s business that has done well recently is the data center segment. But that hasn’t been enough to offset Intel’s other misses.

So NVIDIA’s rise reflects the remarkable shift in how the world uses computing resources. Intel’s old x86 architecture is now a dinosaur.

Today, the world needs application-specific solutions. And the top companies leverage tech like machine learning, AI, and quantum computing to achieve the results they seek.

NVIDIA’s products are designed to meet the demands of the large-scale data centers and are the workhorse for the artificial intelligence and machine learning community. That’s why I expect this company to be on top for years to come.

By the way, if we have any readers who were among the original Bonner & Partners members and took me up on my NVIDIA (NVDA) recommendation, I would love to hear from you. I hope you’re doing well. Please drop me a note right here.

This early stage company is blazing a new path for the biotech industry…

As regular readers know, one of the ways I get my edge is by following private early stage companies through their venture capital (VC) rounds. I get to know everything about these companies years before most people know they exist.

Then when these companies get acquired or go public, I already know if they will be good investments. That’s one of the ways I stay so far ahead of Wall Street.

A quick example is a company called Twilio (TWLO). I had been closely tracking this company when it was still private. I knew its potential. When Twilio went public in June 2016, I recommended it to my readers.

Here’s Twilio now…

With that in mind, today we have to talk about an exciting early stage company that caught my attention.

Menten AI just raised $4 million in a seed round on June 30. That means it is just getting started on its mission. But I really like what this company is all about.

First, one of Menten AI’s key founders was a computational biologist at the Flatiron Institute. This is an organization that looks to advance scientific research by using modern computing power and data analysis.

Jim Simons, a brilliant mathematician who became one of the world’s most successful hedge fund managers, founded the institute. He is worth over $20 billion today.

And I can say that the Flatiron Institute is a great organization. I attended a private meeting of the world’s leading experts in nuclear fusion technology at the institute a while back. It was an awesome day. Here’s what makes Menten AI special…

The team is combining its expertise in computational biology with quantum computing and AI to explore using peptides for therapeutics. It’s a beautiful confluence of technologies. And this is an area of biotechnology that has hardly been touched up to this point.

Peptides are strings of amino acids similar to proteins, except they can penetrate membranes and get into cells. That’s something most therapeutics on the market today can’t do directly.

And that means there is a huge untapped potential market for peptide therapeutics. It just requires somebody to blaze the path.

That’s where Menten AI comes in. This company is stepping up to the plate. And the team at Menten AI is taking the attitude of no constraints. It is going to use whatever is available in the areas of quantum computing and AI to see if it can design synthetic peptides for world-changing therapies.

And I do mean world-changing. Some believe that peptides hold the secret to slowing down the aging process, reducing inflammation, and eliminating pathogens in the body. There is tons of potential here.

So who knows? The company might fail, but it just might succeed.

Perhaps a few years from now, we’ll look back on this moment as the time when we learned about the next CRISPR Therapeutics, Editas Medicine, or Biogen.

This post-pandemic AI company is set to reshape food delivery…

And we will wrap up today with another early stage company that just launched out of the University of Michigan. The company is Refraction AI, and it is focused on contactless delivery services.

Refraction AI provides semiautonomous robots that can provide delivery services within a three-mile radius of any store. These three-wheeled robots are called REV-1, and they are designed to deliver up to six grocery bags to consumers at a time.

Refraction’s REV-1 robots are ideal for operating in bike lanes, though they are fast and nimble enough to operate in traditional car lanes if necessary. Here’s a visual:

REV-1 Delivery Vehicle


Source: Refraction AI

Regular readers will notice that the REV-1 robots are a lot smaller than Nuro’s R2 delivery vehicles, which we talked about back in February. But Refraction AI is taking a slightly different approach. Its robots are smaller with bigger tires, which allows them to operate even in the snowy Michigan winter conditions.

So this is another great solution for contactless delivery. When I look at a service like this, I can easily see these robots in metropolitan areas all over the country. It’s the perfect technology for a post-pandemic world.

And it appears the market agrees with me. Refraction AI has reportedly seen three to four times growth in demand for its REV-1 delivery services in recent weeks.

The demand for home delivery of groceries and food will persist beyond the pandemic.

Finding reliable delivery workers has been one of the most challenging problems for the companies operating in this space. Technology like this only requires shoppers in the store to gather and order, and then the delivery will become fully autonomous. This is a far more efficient approach.

I think we’ll see demand for contactless delivery services like this continue to grow, even as the world returns to normal. Young and old, consumers will be hooked on the convenience factor. And that makes this a company worth watching.


Jeff Brown
Editor, The Bleeding Edge

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