The machine is the size of two tennis courts. And the price tag is an unbelievable $600 million.
Named “El Capitan,” the newest supercomputer from Lawrence Livermore National Lab is set to be unveiled this year.
It will take the record for the world’s fastest supercomputer.
To give us an idea of just how powerful El Capitan is, researchers say the supercomputer can perform at two exaflops. That’s equivalent to 2 quintillion calculations per second.
And while the supercomputer is an interesting news story, what really caught my eye is what’s inside El Capitan.
At the heart of it all is AMD’s upcoming MI300 chip.
And AMD’s CEO, Lisa Su, thinks it’s the key to unlocking a $150 billion market.
That’s because the MI300 will be used in more than just supercomputers. It’s AMD’s answer to Nvidia’s H100 chip which powers most of the AI data center industry today.
If Su is right, the AI data center market will be larger than the combined revenue of AMD, Nvidia, and Intel last year.
Chipmakers are the obvious AI play. That’s why $822 billion has flowed into the three biggest chipmakers this year.
Nvidia is up 192% this year.
Followed by AMD with an 85% rally.
And Intel is trailing behind with a relatively modest 38% return.
Those are impressive returns. But the biggest moves have already happened. That doesn’t leave room for the big returns that I’m looking for.
That’s why I’m focused on a group of stocks that hasn’t benefited from the AI hype.
Let me explain…
Look Beyond the Crowd Favorites
On June 13, AMD took the stage in California. CEO Lisa Su was met with an ovation when she forecasted the AI hardware market to grow 50% per year from $30 billion to $150 billion in 2027.
The obvious winners here are the chipmakers that have a head start on AI – namely Nvidia and AMD.
But you have to look beyond the crowd favorites to make money in the market.
That’s how I scored my first 10x return.
I found a tiny penny stock that everyone else had written off. But I saw a new CEO with a plan… and the track record to prove he could pull it off.
Since 2014, I’ve built a following of over 125,000 by going beyond the headlines to find hidden opportunities in the tech sector.
That’s why when I spot an undeniable trend like AI, I don’t settle for the stocks that have already made their big runs.
Consulting firm PricewaterhouseCoopers estimates that AI will add $15 trillion to the world’s GDP by 2030. That’s 16% of last year’s GDP of $95 trillion.
Most of the value added will come from increased efficiency. Work automated by AI will be completed faster, cheaper, and more accurately than what humans can do.
There are two groups of stocks that I’m researching right now that haven’t benefited from the AI hype at all.
What we see here are the three big chipmakers I mentioned above. And the U.S. insurance and financial industries which are represented by two ETFs.
The insurance and financial sectors are down 1% and 4% this year. But they could prove to be some of the biggest beneficiaries of artificial intelligence.
Goldman Sachs released a study that found that 300 million jobs would be replaced by AI. Nearly half of these jobs would be administrative and legal jobs, which are common in the insurance and financial sectors.
Wells Fargo did a study that found AI could cut 200,000 banking jobs by 2030.
Based on my own analysis, these cuts could boost profits by roughly 50%.
That means fatter dividends and bigger returns… especially from boring companies like banks and insurers.
AMD’s MI300 will join Nvidia’s H100 chip on the market this year. These are the chips that will power the AI revolution… and lead to bigger profits for industries outside the tech sector.
Here’s what I’d ask us to take away: There’s plenty of excitement around artificial intelligence right now. And that’s showing up in soaring stock prices for chipmakers.
But, seemingly without anybody noticing, there are several industries outside of tech that will benefit from the AI revolution. Insurers and financial companies are two possible targets. There will be more.
That’s what I mean when I say we need to look beyond the headlines. Some of the largest returns from disruptive technology can come from some surprising places. And that will be an important area of focus for us in the years ahead.
Regards,
Colin Tedards
Editor, The Bleeding Edge