Don't Buy The ARM IPO, Buy These 3 Stocks Instead

Written By Jason Williams

Updated January 10, 2024

If there was any doubt about investor enthusiasm for artificial intelligence and every company even tangentially related to it…

That doubt should have been crushed by yesterday’s market action.

You see, ARM Holdings, a major chipmaker that was taken private by SoftBank several years ago, just made its market “redebut.”

SoftBank bought the company from investors outright and paid about $32 billion for it seven years ago; it's been looking to cash out its stake since at least 2020.

So the IPO is huge for SoftBank… but it might be even bigger for the AI market.

It marked the biggest IPO in years, and the shares were priced at the very top of the reference range at $51 apiece for IPO buyers.

That valued the company at about $54.5 billion. However, that was just the start…

The very first trade on the secondary market, where investors like you and me get access to IPOs, was at $56.10, or 10% higher than the IPO reference price.

Within 10 minutes of trading, they’d shot up even further, hitting $62 and giving the new tech giant an impressive 22% gain in its first few minutes of public trading and a whopping $60 billion valuation!

Now, for reference, last year, ARM did a little less than $3 billion in revenues, so after that immediate run up the charts, it’s now trading with a price-to-sales ratio of 20.

And for more reference, Nvidia, the darling of the markets and the bellwether for AI enthusiasm, does about $33 billion a year in sales and trades at a P/S around 35.

That tells me there’s more room for ARM to run, and it also tells me that investors are still looking for those big AI profits…

Which means we’re going to see a lot more massive stock rallies before this bubble of interest bursts.

That means there are still a TON of opportunities out there for investors willing to take a little risk and think outside the box that the mainstream media want to keep you in.

And since you’re a member of our community here at Wealth Daily

And since our whole mission is to share moneymaking predictions nobody else is bold enough to make with you…

I already know that you’re looking for information the corporate media, Wall Street fat cats, and corrupt politicians don’t want you to have.

And I know you found us because you’re not afraid to think outside the box.

So I’m pretty sure you’re exactly the person I should be talking to.

Hunting for Giants

I run an investment community that’s focused on spotting the next Nvidia, Apple, Microsoft, or Amazon BEFORE it becomes a trillion-dollar company.

However, it’s not the kind of place where you’d get recommendations to buy stock in Nvidia, ARM, Apple, or Amazon.

Those are great companies, but they’re also old trades and their days of quintuple-digit gains are gone.

Instead, we’re focused on the companies that look like Apple, Amazon, and Microsoft did back when they traded for pennies on the dollar.

We look for trends (like personal computers, the internet, e-commerce, etc.) that will drive investment for decades to come.

Then we identify the companies that are most likely to profit from all that investment.

Maybe they provide a service or product that’s essential to the industry.

Maybe they’ve developed and are pioneering a new technology that will make the industry more efficient and profitable.

Maybe they’ve created the whole industry themselves and are leading the trend forward.

The one thing they all have in common is that they’re in the middle of a market that’s got all the hallmarks of one that will keep growing and profiting for decades to come.

And over the past several years, my researchers and I have been hyper-focused on artificial intelligence.

We’ve chatted with the chatbots. We’ve created digital masterpieces with the AI artists. We’ve even written a few songs and beats with the help of some AI DJs.

But in the midst of all that messing around with this exciting new technology, we’ve also done a whole lot of research too.

And we’ve identified three “subtrends” in the AI market that look like they’re going to be the most long-lived and profitable for investors.

I Hear You

The first is artificial intelligence capable of natural conversation.

Unlike the digital assistants we all know and have mixed feelings about like Alexa and Siri, these programs will not only be able to understand natural speech patterns but also respond in kind.

AI talking

It might not sound that impressive at first blush, but when you realize that there are billions of people around the world (some in our own country) who can’t access the internet because they can’t read…

Well, you start to see how disruptive this form of artificial intelligence technology will be.

It will be able to help people navigate more than just webpages, too. It will be able to help them set up bank accounts and investment accounts.

It will help them navigate complex documents like tax forms, benefits applications, and health insurance forms.

It will literally open up a whole new world to those who can’t read or write. It’ll do the same for those who might suffer from a visual impairment or motor disabilities, too.

And it’ll also do a whole lot for those of us without those limitations holding us back. It can understand natural speech in any dialect of any language spoken with any accent.

It could even understand me speaking broken Spanish with an American accent and the Venezuelan dialect I’ve picked up from my wife and her family.

Not only that, but it could translate that broken, accented, dialectic Spanish into, say Tagalog, so I could talk to my best friend’s grandfather despite him not speaking English or Spanish.

It can take customer support calls too — and it never gets an attitude with the customer, can answer thousands of calls at the same time, and provides unique solutions to every single customer.

I could honestly write a whole book on all the reasons voice AI is so exciting and will eventually lead to massive profits and maybe even the world’s first trillionaire.

But I’m pretty sure I’ve made my point. It’s powerful. It’s coming. And it’s going to be INCREDIBLY profitable.

I See You

But that’s just the first “subtrend” we identified. As we kept up with our research, we singled out two others.

One of them is a more visual form of artificial intelligence… and we’re convinced it’ll grow into a huge market with massive profits, too.

Imagine being in a foreign country or even just a vacation spot you’ve never visited before.

You step out the front door of your hotel or rental and wonder out loud, “Where did the valet say that restaurant was again?”

Your voice AI assistant hears and responds with an address. But you’ve never been here before, so what good does an address do you without directions on how to reach it?

Not much, is the answer to that question. But that voice AI isn’t the only AI helping you out this morning as you search for coffee and a croissant.

Fortunately for you, there’s another kind of artificial intelligence technology that will help you with those directions — and you won’t even have to print them out.

You see, there’s a visual form of AI that’s being developed to help guide people around everything from airports and malls to foreign countries and towns they’ve never visited.

It’s called artificial intelligence wayfinding, and it’s already being used at conventions and trade shows around the globe to help participants navigate the floor and find all the booths they want to visit.

A few airports have also enabled it to help folks with short connection times find the most efficient route to their gate.

AI wayfinding

You might have even used a form of it already if you ever played the game Pokemon Go on your smartphone.

That was kind of like the first step in this technology: augmenting reality with digital signatures.

It’s how you could see the digital characters in the real world around you via your phone screen.

But that was just the first step. With the advancements in AI technology since then, it’s a whole lot more than just a game now, and it’s going to be VERY profitable in the long run.

I Help You

And finally, there’s that third “subtrend” we’re convinced is going to attract massive investment, and, honestly, this one could be even bigger than the first two…

Because this involves what we call a pick-and-shovel play. That’s finance-speak for an investment in one of the support industries that helps advance a trend.

It hearkens back to the gold rush days when the vast majority of miners went home broke, if at all, but the folks who sold them the picks, shovels, and other supplies created legacies that still exist today.

Levi’s Jeans and Wells Fargo Bank are probably two of the best examples.

Old Levi could have tried his hand at digging up dirt in the hopes of finding gold, but instead he struck it rich by making dungarees that could hold up to the strenuous tests prospectors put their apparel through.

And instead of staking a claim of their own and getting dirty looking for riches, Henry Wells and William Fargo made their fortunes by selling supplies and then offering safe transportation to the more successful miners.

Every industry has these kinds of companies… and these kinds of companies almost always provide a safer, better investment than a “pure play” on the industry.

And that’s the third and potentially most powerful “subtrend” my team and I identified: companies that will enable other businesses to seamlessly incorporate AI technology into their operations.

You could sort of think of it as “AIaaS” (artificial intelligence as a service), similar to SaaS (software as a service) or PaaS (platform as a service).

AIaaS

Instead of doing all the work to create and implement AI solutions yourself, you can “outsource” it to a company that’s already developed an expertise over several decades in the industry.

It’s a huge head start and gives you a major advantage over competitors who are trying to go it alone.

And it’s going to be a very big part of the growth of artificial intelligence technologies long into the future.

Bottom Line

The bottom line here is that AI is the next big thing. It’s the next huge trend that will stimulate trillions of dollars in investment and even more in profits.

It’s this century’s personal computer revolution. It's this decade’s internet expansion. It's those huge e-commerce gains but on steroids because it’s going to impact every aspect of our lives.

However, if you only listen to the “analysts” on financial news networks like CNBC, you’re never going to hear about the companies driving these subtrends forward until it's too late.

Those talking heads will keep talking about the megacap stocks their bosses tell them to talk about.

And while Nvidia, ARM, Microsoft, and Google are all great companies and solid investments that will likely profit from AI, they’re not the ones that will mint a new generation of billionaires.

And they’re certainly not creating the world’s first trillionaire.

Those accolades will go to the smaller companies that aren’t getting any press coverage because the press hasn’t been told about them yet.

They’ll go to the tiny firms that have been researching, developing, and pioneering new ways to take advantage of this incredible advance in technology.

And I’m convinced that, after countless hours of tireless research, my team and I have identified the three operations best prepared for massive growth as the AI market continues its rapid expansion.

These are the companies that will reap a lion’s share of the profits and capture the biggest share of this nascent market.

And as our gift to you, I’d like to share our research and these companies with you today.

So take some time today (or even over the weekend) to learn what we’ve learned and see what we’ve uncovered.

Then, come Monday, you can get yourself invested and start thinking about all the ways you’ll spend your newfound AI riches.

To your wealth,

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Jason Williams

follow basic @TheReal_JayDubs

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After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of Main Street Ventures, a pre-IPO investment newsletter; the founder of Future Giants, a nano cap investing service; and authors The Wealth Advisory income stock newsletter. He is also the managing editor of Wealth Daily. To learn more about Jason, click here.

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