Trump could send these military suppliers soaring

Today’s issue in preview:

• Trump could send these military suppliers soaring

• How to profit from soaring AI compute demand

• A great technology stock that hasn’t skyrocketed? Yes, it exists… and you can buy it today.

• Our extraordinary track record gets even better: Our thematic trades in Semi Equipment, Bitcoin Miners, Machine Sensory Perception, Critical Resources, Marvell, and Cisco run to new highs.

A great technology business that hasn’t skyrocketed? Yes, it exists… and you can buy it today.

Credit: Ceri Breeze

Since reaching an Iran War-induced bottom on March 30, the Technology Select Sector ETF (XLK) has soared 50%. Some technology leaders, such as Dell Technologies (DELL), AMD (AMD), Micron (MU), and Arm Holdings (ARM), are up more than 120% during that time. These gains make up one of the largest short-term rallies in U.S. history.

Any investor looking to put new money to work in the technology world finds it difficult to find stocks that haven’t skyrocketed… that are not trading at high valuations.

Given the giant recent rally, has any tech leader not already skyrocketed?

With this in mind, let’s look at Uber (UBER).

Uber is the world’s largest ride-sharing technology platform. It connects people who need rides or things delivered with people who want to earn money as drivers. Uber does not own a fleet of vehicles. Instead, it connects drivers and customers and gets a cut of every transaction.

Most people are surprised to learn that Uber has diversified far beyond ride sharing in the U.S. Delivery of restaurant food, groceries, alcohol, and prescriptions makes up about 33% of the company’s revenue. And Uber services outside of the U.S. make up about 46% of the company’s revenue. In other words, Uber is a ride-sharing, food-delivering international giant.

Like most well-known technology companies, Uber burned through venture capital dollars and lost money during its early years of development and expansion. However, the company is now a cash-producing machine. Over the past 12 months, Uber has generated nearly $10 billion in free cash flow. Uber’s free cash flow in 2025 was 42% higher than the same figure in 2024.

Concerns that autonomous vehicles will harm Uber’s competitive position have depressed Uber’s stock price. Shares are down 12.3% over the past 12 months. Bulls on the stock – such as high-profile investor Bill Ackman, who owns a huge Uber stake – say autonomous vehicles will likely help, not hurt the company… and that Uber is a high-quality business with the potential to grow much larger over many years. Plus, Uber’s price-to-free cash flow multiple is below 20, which makes it a relative bargain in today’s hot technology market.

Importantly, the stock’s recent price action has created a good “golden ratio” trade setup. The “golden ratio” is my nickname for trades where the difference between potential upside and downside is large, in the upside’s favor.

The higher this ratio is, the more you can win versus what you can lose, the better. Most of the market’s consistently successful traders look for trades that can give them at least $4 of upside for every $1 of downside.

Successful trading – the kind that can make you serious money – isn’t about being right all the time. An obsession with a high win rate is a loser’s mentality. Instead, successful trading is about finding and structuring trades that offer golden ratios, executing such trades, and then repeating the process as many times as possible. Doing all this lets you make a lot of money using basic math.

As you can see in the chart below, Uber stock has put in a potential bottom in the $70-$73 area. Traders can enter near recent lows, set a stop near those lows, structure a “high upside, low downside” trade… and potentially make money on one of the few bargains left in the technology sector.

Trump could send these military suppliers soaring

Credit: Alireza Boeini

The Pentagon wants more drones. A lot more of them.

Last week, the Wall Street Journal reported that the Trump Administration is pursuing deals to fund and encourage the domestic production of military drones. The deals may include equity stakes that give the federal government ownership in drone firms.

Shares of drone makers Kratos Defense & Security (KTOS) and AeroVironment (AVAV) advanced 15% and 18%, respectively, after the report.

Avid Money & Megatrends readers aren’t surprised to learn that drones are set to play an increasingly larger role in military conflict.

In late 2024, I urged colleagues to invest in drone stocks for one simple reason: After years of progress and innovation, military and surveillance drone makers can now produce large amounts of effective drones at low cost. Many drone applications now have very high “cost-to-damage inflicted” ratios. Plus, they allow militaries to conduct strikes and surveillance without risking human lives.

This is why drones have played a significant role in the Russia/Ukraine war and the Iran war… and why I’ve reiterated my bullish call a handful of times in M&M.

The now pervasive use of drones in warfare means we are in what military experts call a “Revolution in Military Affairs.”

A Revolution in Military Affairs is a fundamental change in how wars are fought, typically driven by technological innovation. For example, the introduction of mechanized warfare in the form of tanks, battleships, and airplanes drastically changed the battlefield. Airplanes, in particular, introduced a whole new dimension to war.

I’m anti-war and anti-surveillance, so I’d rather see drones used just for peaceful activities like delivering pizza and Amazon packages. However, I don’t make the rules. Governments around the world are buying drones like crazy. Drone maker revenue is soaring. We have an investment megatrend on our hands. The world’s militaries are poised to spend a growing portion of their collective $2.7 trillion annual budget on drones. It seems the Trump administration wants to lead the pack.

After I published my original note, Kratos rose by more than 350%. Fellow drone maker Elbit Systems (ESLT) ran 310% higher. Drone component maker Ondas (ONDS) climbed 1,550%. After running so far so fast, drone stocks staged a large correction this year. Kratos, for example, declined more than 50% from its high.

Drone stocks won’t stay down for long. Like or dislike the Trump administration, there’s no denying that those folks make stocks go way up when they set their minds to it. Global military spending on drones is set to rise for many years. Keep an eye on the stocks mentioned above, as well as fellow drone players Red Cat Holdings (RCAT), DraganFly (DPRO), AeroVironment (AVAV), and Swarmer (SWMR). These firms should benefit from a drone boom that lasts for many years.

How to profit from soaring AI compute demand

Credit: da-kuk

It didn’t take long for the market to jump on the “soon-to-be-neocloud” stock theme we highlighted on May 5.

This week, “soon-to-be-neocloud” stocks – aka Bitcoin Miners – staged big rallies to reach new one-year highs. Riot Platforms (RIOT) jumped 5% to reach a new one-year high. Hut 8 (HUT) jumped 10% to reach a new one-year high. CleanSpark (CLSK) jumped 8% to reach a multi-month high.

On April 15, we shone a spotlight on the “neocloud” stock group and said it was likely to run higher. Neocloud firms own and operate AI data centers and provide “compute” services to big tech firms such as Google, Microsoft, Meta, and OpenAI. As we highlighted last week, demand for AI services is soaring… and so is demand for AI computing power.

Since that note, neocloud leader Nebius (NBIS) has climbed 68% in less than two months to reach a new all-time high. This tells us the bull market in AI compute services is alive and well. On May 5, I highlighted how that bull market is good for “soon-to-be-neocloud” firms – aka “Bitcoin miners.”

Bitcoin miners are companies that built lots of data centers and computer hardware infrastructure years ago to mine Bitcoin. Yet they may end up making a lot more from AI compute demand than they ever did from Bitcoin…

Bitcoin miners have spent years building the type of physical infrastructure AI companies now desperately need. They already control the critical AI compute inputs: electric power, land, substations, development sites, and operating data center infrastructure. They also have experience running high-density compute and deep relationships with utilities.

In other words, they own the sites that can support large-scale AI campuses, and in the AI infrastructure boom, these assets are soaring in value.

The biggest bottleneck in AI is not demand. It is compute infrastructure and the electric power to run it. Big tech wants more compute. AI labs want more compute. Enterprises want more compute. But you cannot create an AI data center overnight. You need land, power, grid connections, permitting, cooling, and operational expertise, which is exactly the areas where these Bitcoin miners already have an edge.

This is why over the past two months, Bitcoin miners have begun trading very strongly. While these businesses are still tied to Bitcoin prices, the market is increasingly assigning value to their underlying infrastructure and its ability to further AI proliferation.

Since our May 5 recommendation, the Bitcoin miner basket we track is up 55% in less than a month (a blistering 716% annualized pace). This shows the bull market in AI compute demand is alive and well. Bullish!

Market Notes

• Our recommendation of semiconductor leader Marvell Technology (MRVL) continues to win. The stock hit a new one-year high today and is up a whopping 180% since our original note

• Our recommendation to own Cisco (CSCO) remains a big winner. The stock jumped 4.9% this morning, reaching a new all-time high. The stock is up 56% since our note less than three months ago.

• Our recommendation to stay long the critical resources megatrend continues to pay off. Large miners Teck Resources (TECK) and BHP Billiton (BHP) reached new all-time highs today.

• Our recommendation to invest in the machine sensory perception theme continues to be a huge winner. Robotics leader Sensata Technologies (ST) jumped 6.8% this morning to reach a new one-year high. The stock is up 60% since our December recommendation.

• Our recommendation to get long the semiconductor equipment theme is another big winner for us. Applied Materials (AMAT) jumped 4.5% this morning to reach an all-time high. The stock is up 34% since we recommended it in March.

• Our recommendation to be long the optical networking theme continued its winning ways today. Industry leader Coherent (COHR) jumped 18% this morning to reach a new high. The stock is up 66% since our note less than two months ago.

Regards,

Brian Hunt
Editor, Money & Megatrends

An urgent message from our colleagues:

An Urgent Message Before SpaceX Goes Public

The first analyst that Stansberry Research founder Porter Stansberry ever hired is going on camera one final time on Thursday, June 4 to deliver what he calls the most important buy recommendation of his career. Across 13 space-sector recommendations, both open and closed, his average return is 155… One has even soared more than 1,100%. Over five years, his returns have beaten the top-ten hedge-fund managers we could find. After Thursday’s broadcast, his research moves permanently behind closed doors.

Reserve your seat here.