Soaring AI demand is bullish for these five stocks

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Today’s issue in preview:

• Soaring AI demand is bullish for these five stocks

• Millions of investors are being harmed by AI. How to make sure you’re not one of them.

• This trend has huge upside potential… and a strong buy signal just fired

• Learn our Top Themes to buy now

Millions of investors are being harmed by AI. How to make sure you’re not one of them.

Credit: Bill Oxford

How do you lose $114 billion in less than six months?

You could start 2026 by owning one of the world’s largest, most successful software companies… and then watch its market value plummet amid fears that AI will wreck the business.

This is precisely what has happened to leading tax preparation software firm Intuit (INTU) this year. It entered 2026 with a market cap of $184 billion.

Thanks to fears that AI will allow upstart competitors and Intuit’s own customers to create cheaper versions of its premium products (such as TurboTax), Intuit’s stock is down 60% YTD, and its market value has plummeted to $70 billion. This week, the stock hit a new one-year low.

Intuit is not alone in its AI misery. Many large software firms – including Salesforce (CRM), The Trade Desk (TTD), Adobe Systems (ADBE), and Procore Technologies (PCOR) – have suffered the same fate. They have fallen victim to a megatrend I’ve detailed many times in these pages. They are all getting hit by the supersonic tsunami that is AI. They all hit new one-year lows yesterday.

When Elon Musk talks about the fast-moving, world-shaping effects of AI, he often calls the technology a “supersonic tsunami.” AI is the fastest developing technology in history… and it promises to reshape the world in massive ways. Plus, its progress is being fueled by the largest collective investment effort of all time.

Over the past five months, we’ve detailed how stocks in the KIDS category are the most vulnerable to the supersonic tsunami. KIDS is my acronym for Knowledge work, Information collection and analysis, Data collection and analysis, and Software.

Generally, these businesses sell digital products and services. We’re talking consulting firms. Credit rating agencies. Financial data providers. Software firms. You can’t stub your toe on what they sell.

These companies sell products and services that AI programs could produce for a very low cost soon. If someone using AI can code a product or service into existence, then any business related to it is in danger.

AI will put some of these KIDS work companies out of business. But keep in mind, it doesn’t have to put them out of business to make them stock market losers. AI only needs to lower the cost of producing what they produce over the long run. This will enable hordes of AI-centric competitors to throw a heavy wet blanket over their growth rates, profit margins, and P/E multiples.

Concerns over this trend have manifested in the steep market-value declines of the companies listed above.

Inuit’s role in this story is particularly incredible. For years, the company was a stock market darling. Its TurboTax and QuickBooks products dominated their markets… which made Intuit one of the highest-quality businesses in America. Its market value climbed more than 1,600% from 2012 to mid 2025. Then it was hit with the AI tsunami and lost 60% of its value in less than six months. Incredible.

Technological disruption isn’t producing just a “K-Shaped economy.” It’s also creating a “K-Shaped stock market” full of big winners and big losers. This week’s declines in the companies above are a serious reminder: Much of your investment success over the next decade will depend on whether you are positioned to greatly benefit or be seriously harmed by the supersonic tsunami that is AI.

Soaring AI demand is bullish for these five stocks

Credit: alejomiranda

It turned out that being bullish on the “soon-to-be-neocloud” theme was a great idea.

Yesterday, leading “soon-to-be-neocloud” firm WhiteFiber (WYFI) surged 16.3% to reach a new all-time high.

This gain has helped drive our “soon-to-be-neocloud” stock index to a massive 66% gain in less than two months.

On May 5, we detailed the emerging uptrend in “soon-to-be-neocloud” stocks, aka Bitcoin miners.

Neocloud businesses own and operate AI data centers. Traditional cloud providers (AWS, Azure, Google Cloud) are general-purpose platforms designed to meet every computing need. Neoclouds are purpose-built to serve AI companies with enormous computing needs.

Big customers like Meta use neocloud data centers so they can train and operate bleeding-edge AI models. Neocloud businesses do all the logistical work of securing, building, and operating AI data centers so AI model builders can focus on building models. In industry speak, neoclouds provide “compute” to big tech. And their businesses are booming thanks to growing demand for AI features and products.

This is bullish 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. In the AI infrastructure boom, these assets are soaring in value.

The biggest bottleneck in AI is not demand. Demand for intelligence is virtually infinite. 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 are exactly the areas where these Bitcoin miners already have an edge.

To track and trade this trend, we included WhiteFiber, Cipher Mining (CIFR), Riot Platforms (RIOT), Hut 8 (HUT), and CleanSpark (CLSK) in our in-house stock index. As you can see, Big Tech’s soaring demand for “compute” is driving this index to new highs. We expect to see more of them soon.

This trend has huge upside potential… and a strong buy signal just fired

Credit: Oselote

The bull case for biotech just got stronger.

This morning, many leading industry groups and themes suffered brutal selloffs. The benchmark tech ETF we follow, the Technology Select Sector SPDR Fund (XLK), dropped 3.4%.

Leading semiconductor stocks dropped by 5%+. Leading optical networking stocks dropped 7%+. Leading memory stocks dropped 8%+. Robotics, solar, gold mining, copper mining, and emerging-market stocks all dropped.

Meanwhile, the SPDR S&P Biotech ETF (XBI) ignored the broad market weakness and climbed 1.25% to reach a new one-year high. This is yet another bullish development for one of our biggest winning trades.

On August 18, I sent a research note to colleagues outlining my bullish view of the biotech sector’s price action. Since then, I’ve written more than a dozen updates on the biotech bull market, as XBI has outpaced the S&P by an incredible 71% to 18%.

The biotechnology sector comprises companies working on cures and treatments for hundreds of diseases. When investors grow interested in this industry, the returns can be incredible. During the last biotech bull market, the sector soared 300% over four years.

Biotech performed poorly from 2021 through 2025, so most investors are indifferent to it. But I see major potential here. This industry is poised to generate many stock market doubles and triples over the coming decade.

The fusion of AI plus biology will generate dozens of compelling stock narratives over the coming years. Researchers running superintelligent AI programs will be able to run millions of digital simulations of drugs and treatments. This will put medical innovation into overdrive… and create many big stock market winners.

Companies that leverage AI to “crack the code” for various diseases, treatments and drugs will enjoy 100%… 500%… even 1,000%+ stock rallies.

In many cases, these rallies will happen thanks to stories and potential… rather than a company generating revenue or earnings.

Capitalizing on many of today’s biggest stock market trends means focusing on promise over profits. The biotech sector holds the potential for both.

Investors with the time to spend on picking individual biotech stocks and managing the positions can generate large returns in a biotech industry uptrend. For example, over the past year, at least 11 companies with “therapeutics” in their names have delivered returns of 300%+ or more.

If you don’t want to spend time researching and managing individual biotech stock positions, ETFs can get you exposure to this industry. XBI and the iShares Nasdaq Biotechnology ETF (IBB), which focuses on giant biotech firms, are worth considering.

On a day like today – where most stocks and themes suffer large declines – I like to see what stocks held steady or even advanced. The big decline serves as a “stress test” of investment trends.

If the market drops 3%, you want to see what drops just 1%. If the market drops 2%, you want to see what climbs 1%. That sort of thing. This is often called “relative strength.” It allows you to spot the safer, sturdier megatrends for investment.

It’s like looking at a beachfront neighborhood after a hurricane. Some homes lost their roofs, and some homes were blown away. But some homes were unbothered by the storm. Those are safe, well-built homes.

In other words, today’s solid gain for biotech, on a day when most high-growth industry groups are getting hit hard, is a bullish signal.

The biotech industry has tremendous price momentum working in its favor… plus the investment public is largely indifferent to its success. This is a powerful combination that makes more new highs a high-probability bet. I remain bullish on biotech.

Market Notes

• Leading AI defense firm Palantir (PLTR) reached a new one-year low today.

• Leading Chinese tech firm Alibaba (BABA) reached a new one-year low today.

• Leading automaker Stellantis (STLA) – maker of Jeep, Chrysler, Dodge, and Fiat – reached a new one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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