The biggest AI news you’re not hearing in the mainstream media… is very bullish

Today’s issue in preview:

• Donald Trump is working to make this sector boom. Do you own it?

• The biggest AI news you’re not hearing in the mainstream media… is very bullish

• This ETF lets you benefit from the largest investment effort in all recorded history

The biggest AI news you’re not hearing in the mainstream media… is very bullish

Credit: JustSuper

This week, the bull case for “the world’s most important trend” got a lot stronger.

Almost by the hour, the “AI is a bubble” crowd has taken hit after hit to its bearish outlook.

The bullish signals are coming in the form of many new one-month and three-month highs for critical players in the AI infrastructure trade.

Just yesterday, AI leader Nvidia (NVDA) reached its highest point in three months. The VanEck Semiconductor ETF (SMH) broke out to its highest point since June. AI infrastructure leaders Lumentum (LITE) and Taiwan Semiconductor (TSM) did the same.

And as we detailed on Wednesday, our Heatseeker scan identified more than 30 stocks heavily leveraged to the AI infrastructure megatrend that reached one-month highs this week.

This widespread strength across so many key players is a huge positive development for the AI infrastructure megatrend, which we call “the world’s most important trend.”

Over the past month, we’ve published a special series of research notes analyzing the AI infrastructure trend.

The status of this critical trend has become one of the great sagas of the business and investment world… a source of intense disagreement among industry bulls and bears. It’s a trend whose outcome could have large effects on your portfolio.

Given AI’s enormous promise, large tech firms such as Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $3 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history.

Big Tech’s historic investment boom has made the entire “AI infrastructure” trend responsible for a large share of America’s GDP growth and stock market returns over the past two years. It has also drawn the skeptical scrutiny of many widely followed investment analysts who claim the trend is a bubble… one that will soon explode and cause tremendous damage to stock prices and the global economy.

If this hugely consequential trend isn’t the most important trend in the stock market, then it is certainly in the top three.

I believe the AI infrastructure trend has years to run. I believe the world’s smartest, most connected tech insiders who know the true state of bleeding-edge AI development and have real-time stats on AI investment ROI, such as Elon Musk, Jensen Huang (Nvidia), Satya Nadella (Microsoft) and Andy Jassy (Amazon), perhaps maybe… just might… know far more about AI and their businesses than outsiders know about it.

As much press as AI gets, let’s remember that less than 1% of the global population pays for top-tier AI programs. And I estimate less than 10% of large companies believe AI has made a meaningful impact on their businesses.

This revolutionary technology hasn’t yet proliferated, achieved mass adoption, or had mass impact.

Regular readers know I care a lot more about what the market thinks of any stock, trend or theme than what any one person thinks of it, including me. You can be bullish or bearish on a trend all you like, but if that trend is moving strongly against you, then your idea isn’t worth much in my book.

Over the past few months, we have analyzed price action in critical areas of the AI infrastructure trade – including the VanEck Semiconductor ETF, computer memory giant Micron (MU), and leading optical networking stocks such as Lumentum – to guide our trading.

The price action this week in many of these critical areas is fantastic.

When you add the strength in semiconductors and optical networking to the strength in the Mag 7, and key AI energy stock Bloom Energy (BE), a clear picture emerges: On “the scales of stock market justice,” the weight of the evidence is now tilting heavily in favor of the AI infrastructure trend. Consider us bullish. We expect this trend to persist.

Donald Trump is working to make this sector boom. Do you own it?

Credit: gorodenkoff

Our “Made in America” megatrend thesis received a big vote of approval from the market today. This morning, Johnson Controls (JCI) surged 2.2% to reach a new all-time high.

Johnson Controls isn’t a household name. But it’s a giant of American manufacturing. Its market cap is $93 billion, and it employs over 80,000 people.

Johnson Controls is one of the world’s largest providers of equipment, software, and services used to operate large commercial and industrial buildings. It manufactures and services refrigeration systems, HVAC systems, security systems, temperature control systems, and virtually everything else you need to keep a factory, data center, hangar, hospital, warehouse, or airport running properly. We’re talking high-tech manufacturing on a massive scale.

This makes Johnson Controls a key player in our “Made in America” megatrend.

Back in January, I made the case for going long the Made in America megatrend… for investing in companies that supply critical equipment and services for building and operating today’s high-tech factories.

The bull case here is simple…

President Donald Trump – along with many business and military leaders – believes that the U.S. has outsourced far too much of its industrial capacity to China over the past 25 years. We outsourced significant portions of our semiconductor, appliance, medicine, weapons, and machinery production.

We outsourced the capacity to produce and process critical resources, such as rare earth elements.

The COVID-19 pandemic showed that depending on other countries for critical economic inputs makes the U.S. economy less safe and secure. To put it bluntly, it is very stupid to not make products critical to national security like AI semiconductors within our own borders… especially when we are in an economic and geopolitical “great powers” contest with China.

Trump has staked his legacy and reputation on greatly expanding our industrial base… and he’s working with business leaders to invest trillions to pursue this goal. Apple (AAPL), for example, has committed to invest $600 billion in U.S.-based manufacturing over the next four years. Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years.

Drug giant Eli Lilly (LLY) said it has committed more than $50 billion in domestic manufacturing commitments since 2020, including four additional U.S. plants announced in 2025. Three of them were designed to manufacture active pharmaceutical ingredients (APIs). Lilly says it will be the largest domestic drug manufacturing investment in U.S. history.

In Money & Megatrends, we’ve capitalized on this “Made in America” megatrend with strong returns in robotics, factory automation, and machine component makers such as Cognex (CGNX), Ouster (OUST), and RBC Bearings (RBC). Johnson Controls is proving to be an excellent way to invest in this trend as well.

In its most recent earnings report, Johnson reported 10% organic revenue growth and 37% organic order growth in its Americas business. Its backlog jumped 40% to $15.9 billion. Management attributed a large part of this growth to the AI data center building boom.

The Made in America megatrend involves building huge amounts of new AI data centers, high-tech factories, and electrical infrastructure. JCI’s strong business performance and surging stock price indicate this trend is in full swing. We remain bullish!

This ETF lets you benefit from the largest investment effort in all recorded history

Credit: EvgeniyShkolenko

It’s not just a bull market in a few big technology stocks (see above)… It’s a bull market in the world of “equal weight” technology investing as well.

Back in April, we analyzed the Invesco S&P 500 Equal Weight Technology ETF (RSPT) and described it as an ETF that “lets you benefit from the largest collective investment effort in all recorded history.”

As described above, giant tech firms such as Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) are racing to build the best AI applications and infrastructure. They have invested over $1 trillion in AI infrastructure. They are on pace to invest over $700 billion this year alone and more than $4 trillion after that.

Both the scale and the velocity of this investment boom are unprecedented. It is the largest collective investment effort in history. We have “surfed” this tidal wave of capital and banked many large individual stock wins related to it over the past two years.

However, if you’d rather not spend time and effort tracking the individual stocks and AI infrastructure subthemes we regularly cover, keep RSPT in mind.

This fund owns a diversified basket of leading technology firms across a broad swath of tech industries.

Holdings include cybersecurity leader Palo Alto Networks (PANW), semiconductor leader AMD (AMD), semiconductor design firm Synopsys (SNPS), semiconductor equipment giant Applied Materials (AMAT), computer memory leader Micron (MU), optical networking leader Lumentum (LITE), and software giant ServiceNow (NOW)

Since RSPT is an equal-weighted fund, no giant tech company makes up an oversized portion of it. And it gives its owner exposure to many technology-focused stocks and industries.

Most importantly, the market approves of this fund.

As you can see in the chart below, RSPT enjoyed a huge rally from April to early June. It then corrected and moved sideways during the summer. But in the past week, the fund has broken out to new all-time highs.

This important price move shows that we are not just in a tech bull market… we are in a tech bull market where wealth is being generated by a broad and diversified group of stocks and sub-industries. We remain bullish on tech!

Market Notes

• Our February 17th recommendation to own cybersecurity stocks is paying off. CrowdStrike (CRWD) just hit a new high which puts it up 175% since our recommendation. Okta (OKTA) and SentinelOne (S) just hit new yearly highs as well.

• AI Infrastructure names like Keysight (KEYS), Semtech (SMTC), and ASE Technology (ASE) just hit new highs. This is a good sign for the AI infrastructure trade. Nvidia (NVDA) also just hit a new all-time high.

• The SonicShares Global Shipping ETF (BOAT) remains near an all-time high, and individual shipping stocks like Torm (TRMD) at highs.

• Our February 13th recommendation to own Synaptics (SYNA) is doing well. The stock is up 14% today after a potential merger with On Semiconductor (ON).

• Clothing and footwear giant Nike (NKE) reached a new 10-year low today.

• Defense giant Northrop Grumman (NOC) reached a new one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

An urgent message from our colleagues:

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See his full warning here.