Own these stocks and get paid to power AI

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Today’s issue in preview:

• Own these stocks and get paid to power AI

• This chart shows why you should be bullish and buy stocks

• AI is dangerous. Here’s how that can make you a lot of money

• Learn our Top Themes to buy now

This chart shows why you should be bullish and buy stocks

Credit: Art Wager

If you’re looking for an excuse to celebrate this evening, the stock market supplied one today.

The iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) advanced to an all-time high. This is a big, big deal.

Since the current bull market began in 2023, a whole doom-and-gloom industry has been built on bearish stock and recession forecasts. Anyone who listened to the “prophets of the apocalypse” and avoided stocks has missed a historic wave of wealth creation. The bears have sounded clever, but they’ve been very, very wrong.

Sure, the U.S. economy has imbalances and problems. But it also has tremendous forces working in favor of prosperity. Energy independence. Food independence. The world’s most dynamic system for creating and funding new businesses. The world’s largest and most innovative technology industry. A system that rewards hard work, risk-taking, and value creation.

These “forces for good” are manifesting themselves in IAI’s all-time highs.

IAI is a unique ETF focused on companies that function as the business and investment world’s “support system.”

The fund includes investment banks, securities exchanges, stock brokerages, financial index providers, and credit rating agencies. Major holdings include diversified giant Goldman Sachs (GS), fellow giant Morgan Stanley (MS), brokerage firm Robinhood (HOOD), credit rating agency Moody’s (MCO), and financial exchange giant CME Group (CME, formerly Chicago Mercantile Exchange).

These firms provide the grease and gears of the world’s financial markets engine. They eventually get a substantial “cut” of all kinds of financial activities like IPOs, 401(k) management, stock index administration, ETF management, stock purchases, commodity transactions, wealth management, debt issuance, and credit ratings.

Their fortunes rise and fall with the health of global financial markets. The new highs reached by their ETF are a bullish economic signal.

Over the past four months, I’ve written over a dozen research notes analyzing the soaring share prices of highly economically sensitive industry groups, including trucking stocks, regional banks, manufacturing stocks, diesel engine makers, 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.

This exceptional price strength in key components of America’s economic machine means the economy is doing much better than the news you hear from the mainstream media.

We can add IAI’s new highs to this long list of positive market trends. The business of money, investment, and corporate finance is booming. Manage your financial affairs accordingly!

AI is dangerous. Here’s how that can make you a lot of money

Credit: imaginima

As we expected, it’s a bull market in securing the world’s AI, computers, and data centers.

As evidence, I present today’s new all-time high reached by Cloudflare (NET).

In our March 16 issue, we introduced our Agent Supernova thesis… and how companies such as Cloudflare are positioned to benefit from the trend.

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.

Soon, a restaurant could have five different agents working in it. One agent to manage the cooking schedules of meals. One agent to manage accounting. One agent to manage the staff. One agent to manage the ordering and tracking of supplies. One general-purpose agent to manage the specialized agents and interact with the restaurant owner.

At home, another set of agents can perform tasks to help the heroic American mom. A “mom helper” agent could schedule dentist appointments for the kids, pay bills, renew the car insurance, write and send thank-you cards, order groceries, and remind the kids to do their homework.

Meanwhile, another set of agents will transform American factories. They will have agents managing logistics, accounting, production schedules, component part ordering, hiring and firing workers, and other critical functions.

Now, take those three examples and extrapolate that activity across the economy. We are on the cusp of an explosion of agents working 24/7/365 for individuals, businesses, and governments.

In addition to restaurant manager agents, mom agents, and factory management agents, our lives will soon feature legal agents, government agents, tax agents, teacher agents, negotiator agents, airport agents, hospital agents, writing agents, marketing agents, and the list goes on for days.

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.

Over the past four months, we’ve detailed how the Agent Supernova is creating opportunities in data traffic, semiconductors, and neocloud stocks. It’s also poised to boost Cloudflare’s market value.

Cloudflare is one of the world’s leading Content Delivery Network (CDN) firms. A CDN is a network of physical servers deployed across the country that speeds up the delivery of website content. It reduces latency and bandwidth costs by bringing data and content closer to users.

In addition to this business, Cloudflare provides in-demand cybersecurity services, AI agent management services, and AI agent transaction services. This is a huge component of the business, since nobody will want to use AI if they think it will be used to steal their identity.

This diversified suite of hardware and agent management services makes Cloudflare something of an AI agent “conglomerate,” and uniquely positioned to benefit from the coming agent boom.

Cloudflare’s unique position is driving strong growth. In 2024, its revenue grew 29%. In 2025, it grew 30%. Wall Street expects Cloudflare to maintain this high revenue growth through 2026 and 2027, with revenue projected to reach approximately $2.79 billion in 2026 (roughly 29% growth) and rise toward $3.6 billion by 2027. After a sideways consolidation over the past 10 months, the stock has broken out to new highs.

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. Cloudflare’s new all-time high is a clear demonstration of this trend.

Own these stocks and get paid to power AI

Credit: Ron and Patty Thomas

This week, investors have nervously followed the chaotic war in Iran, the volatile action in AI infrastructure stocks, and the first moves of earnings season.

Meanwhile, the nation’s big utility firms quietly go about their business of producing electric power and generating steady dividends for their shareholders. It’s one of the most powerful trends you don’t hear enough about.

Back in July 2025, I highlighted the emerging uptrend in the Utilities Select Sector SPDR Fund (XLU) and said AI power demand was poised to drive it higher. This ETF holds a diversified basket of large, dividend-paying U.S. electric power producers. Major holdings include NextEra Energy (NEE), Constellation Energy (CEG), and Duke Energy (DUK).

Given AI’s enormous promise, big tech firms Meta (META), Google (GOOG), Amazon (AMZN), OpenAI, and Microsoft (MSFT) are racing to build the world’s best AI models and infrastructure. They’ve already spent more than a trillion dollars. This year, they are on pace to spend over $700 billion on AI infrastructure, with more than $3 trillion expected to follow.

All that AI infrastructure is poised to consume huge amounts of electricity. Goldman Sachs forecasts global power demand from data centers will climb 50% by 2027 and as much as 165% by the end of the decade. This demand is driving a big bull market in virtually every form of electric power production.

One of my recommended ways to invest in this megatrend is via electric power producers… aka “electric utilities.” When you invest in utilities, you are not risking your money by trying to pick the company that creates the best AI model or the best AI-powered fintech application.

Instead, you’re making the safe bet that every company and every individual using AI ends up buying some electricity to power it. It’s the old “selling picks and shovels to Gold Rush miners” strategy applied to AI.

Much more important than what I think of the bull case for utilities is what the market thinks of it. There’s good news here.

As you can see in the two-year chart below, XLU has enjoyed a series of higher highs and higher lows within a long-term uptrend. The fund trades within a dollar of its all-time high. In other words, it’s a bull market in energy production.

The enormous business, technological, demographic, and political trends that shape our world play out over years, not months. This means the financial market trends they manifest tend to persist for years, not months. I remain bullish on utilities and getting paid to power AI.

Market Notes

• Major global banks Bank of America (BAC), JP Morgan Chase, (JPM), HSBC (HSBC), UBS (UBS), Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group (MUFG), KB Financial Group (KB), and Nomura Holdings (NMR) climbed to new one-year highs today. These are bullish economic signals.

• The bull market in Canada continues: Canadian banks Royal Bank of Canada (RY), Bank of Montreal (BMO), Bank of Nova Scotia (BNS), and Canadian Imperial Bank of Commerce (CMS) all hit new highs today. 

• Our October 8^th recommendation to own the Boomer health care theme is still paying off. Elevance Health (ELV) just hit a new high. It’s now up 26% over the last year. 

• The railroad industry is booming. Union Pacific Corp (UNP), CSX Corp (CSX), Norfolk Southern Corp (NSX), and Canadian Pacific Kansas City (CP) all hit new highs today. 

• Oil refining giants Valero (VLO), Marathon Petroleum (MPC) and Philipps 66 (PSX) reached new three-month highs today thanks to the resumption of armed conflict in Iran.

Regards,

Brian Hunt
Editor, Money & Megatrends

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