Mass adoption of AI means soaring demand for this critical service

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Today’s issue in preview:

• Mass adoption of AI means soaring demand for this critical service

• This cheap, beaten-up sector could start paying investors soon

• The strongest, most profitable bull market you don’t own, but should

• Learn our Top Themes to buy now

The strongest, most profitable bull market you don’t own, but should

Credit: Michael Müller

If you asked a group of investors what today’s strongest financial trends are, chances are good you’d hear “AI” or Elon Musk’s move into space and beyond.

But you should probably hear about Colombia as well.

Last week, shares of the Colombia-focused Global X MSCI Colombia ETF (COLO) reached a new all-time high, making it one of the few industry- or geographic-region-focused ETFs to do so. The fund has risen a fantastic 68% over the past 12 months… which makes it one of the top-performing ETFs in our database.

U.S.-traded shares of Colombian banking and financial services giant Grupo Cibest (CIB) and the country’s oil giant Ecopetrol (EC) are up 118% and 105%, respectively, since mid-2025.

Over the past year, we’ve published many pieces on the bullish outlook for South American markets, including Colombia, Brazil, and Argentina.

Bulls on South America point out how the continent’s century-old habit of installing political leaders with strong communist views is being at least temporarily paused by a new tendency to install leaders with some free market, pro-property rights views. Where free enterprise and property rights are respected, wealth-creation tends to follow. So, this trend should be good for the continent’s stock markets.

South American economies are also heavily leveraged to critical resource markets, including copper, iron ore, agriculture, rare earths, and oil. The critical resources boom we’ve been covering is good for “LatAm” stocks.

After the removal of Nicolas Maduro from power in Venezuela, South American stock markets responded favorably to the idea of the U.S. exerting greater influence and strengthening financial ties on the continent.

Recently, we’ve detailed how Argentina is home to the enormous undeveloped Vaca Muerta shale basin, making oil and gas producers YPF (YPF) and Vista (VIST) interesting investment opportunities in energy.

We’ve detailed how Brazil is a commodities powerhouse, with unique exposure to AI infrastructure through its vast hydroelectric power and rare earth resources. A way to invest here is the iShares Brazil ETF (EWZ).

The uptrend in Colombian stocks is being driven primarily by the results of the country’s recent presidential election. Investors believe incoming president Abelardo De La Espriella will be good for business and investors. Let’s hope that is the case.

Trends tend to persist, and rising markets tend to keep rising, so I still like the idea of owning South America. The new highs in Colombia are a sign that things are going in the right direction.

Mass adoption of AI means soaring demand for this critical service

Credit: imaginima

It turns out, being bullish on cybersecurity stocks was a good idea.

As you read this, the Global X Cybersecurity ETF (BUG) is up 25% on the year. Leading cybersecurity firms Palo Alto Networks (PANW, up 80% YTD), Fortinet (FTNT, up 104% YTD), CrowdStrike (CRWD, up 63%), and Okta (OKTA, up 64%) are clear market leaders.

Back in March, we published a special series of research notes about the coming “Agent Supernova.”

After years of development, AI is now advanced enough to perform many everyday tasks people do … and the list is only getting longer.

Over the next 12–24 months, AI “agents” will help manage factories, perform financial analysis, manage inventories, write software, design websites, create legal documents… and thousands of other tasks.

The Agent Supernova is poised to reorder how the world works. It will break and reform many businesses, industries, and societal norms.

We are on the cusp of an explosion of agents working 24/7/365 for individuals, businesses, and governments. Over the next two years, we will see a proliferation of agents working in manufacturing, healthcare, education, energy, travel, marketing, and the legal profession.

Within the next two years, the number of AI agents operating in the American economy isn’t poised to increase by 10X… or 50X… or even by 1,000X. Try at least 10,000X.

Of course, the business and investment implications here are huge. The Agent Supernova will transform many businesses and industries. It will end many businesses as we know them… while creating new ones at the same time. The economic deck is about to get reshuffled.

Millions of agents working in the economy have plenty of positive implications. But there are negative ones as well. Every new agent is a point of vulnerability in cybersecurity. And remember, crooks get to use AI too.

If agents can roam the web, communicate for you, log in to your apps, move money, and modify data at machine speed, then a compromised agent can do the same damage just as fast.

In our note on cybersecurity, we cited CrowdStrike, Palo Alto, Zscaler (ZS), SailPoint (SAIL), and Radware (RDWR) as companies that would benefit from a surge in AI-focused cybersecurity spending. As detailed above, some of these stocks have soared in 2026.

The Agent Supernova is poised to hit our economy like a tidal wave. It will create enormous change and opportunity. Investing in businesses that keep agents operating safely and securely is a big way to benefit. And right now, the market is saying “so far, so good” to the long cybersecurity thesis.

This cheap, beaten-up sector could start paying investors soon

Credit: chittaratlert

Are the beatings over?

Can we start making money in the residential home business again?

The new, strong price action in many leading homebuilding materials and equipment suppliers implies that the answer to those questions is “YES.”

Although 2025 was a strong year for many stock indexes and industries, the homebuilding sector was a loser. In 2025, most housing-related stocks badly lagged the broad market. We’re talking companies involved in outdoor decking, appliances, hardwood floors, HVAC systems, plumbing supplies, roofing, insulation, tiling, and water heaters.

 This underperformance was driven by two factors:

1. A lack of new home supply means most newly built homes are unaffordable to most people.

2. Existing home sales have stalled because current homeowners have low mortgage rates they don’t want to lose after selling. This dynamic has “frozen” many housing markets.

This situation brought doom upon the housing trade in 2025.

Stocks such as Trex (TREX, decking), Whirlpool (WHR, appliances), Owens Corning (OC, insulation), JELD-WEN (JELD, doors & windows), Lennox (LII, HVAC), American Woodmark (AMWD), and Builders Firstsource (BLDR, diversified building products) all declined in 2025.

The S&P Homebuilders ETF (XHB) was one of the worst-performing funds in 2025.

This weak performance attracted interest from investors who like to buy cheap, beaten-down “cyclical” industries in anticipation of better times ahead. These bargain-hunting investors are starting to get some good news… and to see rays of light in the darkness of the homebuilding industry. 

Shares of Mohawk Industries (MHK) – America’s largest flooring manufacturer jumped 6% this morning after reporting solid earnings. The stock reached a five-month high.

Shares of Sherwin-Williams (SHW) – America’s largest paint manufacturer are close to breaking out to a five-month high.

Shares of Owens Corning (OC) – a giant in home insulation – are close to reaching a one-year high.

Shares of Trex (TREX) – a giant of outdoor decking – are in a bullish series of higher highs and higher lows. The stock is close to breaking out to a new 10-month high.

Power tool giant Stanley Black & Decker (SWK) just broke out to a one-year high.

The stock market is the world’s greatest forecasting mechanism. It tends to look ahead 6-12 months. When an industry is in a recession, its stock prices will rise before the news media announces it is recovering. When an industry seems to be doing well, its stock prices will decline before the news covers its downturn. This is often called “discounting” or “pricing in” the future.

The emerging strength in homebuilding product and materials stocks tells us this beaten-down industry may be exiting its big downturn.

Over the past eight months, I’ve written over a dozen research notes analyzing the soaring share prices of highly economically sensitive industry groups, including trucking stocks, railroad stocks, regional banks, manufacturing stocks, steelmakers, shopping mall operators, and hotel chains.

At the end of each note, I pointed to their soaring stock prices and told readers that the U.S. economy is doing much better than most people think.

These economically sensitive firms are important “real world” indicators. They almost always do a better job of telling us what is happening in the economy than any media outlet or economist. And their uptrends are moving in a bullish upward direction for the U.S.A.

It would be great to add the homebuilding products and materials industry to this list. I’ll keep you apprised of how this important trend develops.

Market Notes

• Online retail and cloud computing giant Amazon (AMZN) reached a new all-time high today.

• The American consumer lives. Retailer Target (TGT) reached a new all-time high today.

• High-end cruise operator Viking Holdings (VIK) reached a new all-time high today. This shows the high-end consumer is spending with enthusiasm.

• Full-service restaurant giants Texas Roadhouse (TXRH),Brinker (EAT), and The Cheesecake Factory (CAKE) reached new all-time highs today. These are signs that the U.S. economy is strong.

• Warren Buffett’s conglomerate Berkshire Hathaway (BRK/A) reached a new one-year high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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