This risky technology bet has huge upside

Today’s issue in preview:

• This risky technology bet has huge upside

• Our thematic “smart factory” trade explodes higher. It has room to run.

• Here’s how the true market insiders are saying the Iran War will play out

• Our incredible track record gets even better: Our thematic trades in Solar Energy, Smart Factories, Space, and Semiconductor Equipment generate more gains.

Our thematic “smart factory” trade explodes higher. It has room to run.

Credit: josemoraes

On Aug. 5 of last year, Apple (AAPL) announced plans to invest $600 billion over the next four years into U.S.-based manufacturing capacity. That announcement surely felt like good news to President Donald Trump and other advocates for a greatly expanded U.S. manufacturing base.

It’s also a bullish driver for one of our highest-conviction investment themes: The American Smart Factory Boom.

Back in January, I made the case for investing in companies that supply critical equipment and services for building and operating high-tech, highly automated “smart factories.” The bull case here is simple…

President 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.

Trump has staked his legacy and reputation on expanding our industrial base… and he’s working with business leaders to invest trillions to pursue this goal. In addition to Apple’s plans, Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years. Semiconductor giant Taiwan Semiconductor (TSM) plans to invest $165 billion in U.S.-based semiconductor plants, which would be the largest foreign direct investment in U.S. history.

Any factory competing in today’s economy must be highly automated. This means a large increase in U.S. manufacturing capacity must be matched by a large increase in the use of robotics, specialized semiconductors, AI programs, and machine sensory perception equipment.

This situation has made our recommendation of “smart factory stocks” like those inside the ProShares S&P Kensho Smart Factories ETF (MAKX) a big winner so far.

MAKX is based on an index designed to track companies that provide the equipment and services required to build and operate smart factories. Major holdings include machine sensory leaders such as Ouster (OUST) and Cognex (CGNX). It has a large weighting in Rockwell Automation (ROK), a leader in automated factory systems. The fund also owns specialized semiconductor makers with exposure to “edge computing” demand.

Business is booming for smart factory equipment and service providers. MAKX jumped 4.7% this morning to reach a new all-time high. It’s up 32% since our recommendation four months ago.

The push to make the American economy safer and more secure by greatly expanding our manufacturing base is no “flash in the pan” trend. It will most likely be a decade-long megatrend that directs enormous capital flows into well-positioned leaders. This uptrend has further to run.

This risky technology bet has huge upside

Credit: razihusin

From Jan. 1 this year to early May, the stock price of electrical contracting giant Quanta Services (PWR) soared 85%.

This rally helped make our call to invest in Power Grid Upgrade stocks a huge winner. It’s also confirmation of a larger megatrend that will generate dozens of winning trades over the next five years.

That megatrend is a boom in electric power consumption, driven by the proliferation of AI and the data centers required to use it.

Regular readers know one of the largest and most profitable facets of the AI megatrend is power consumption. Thanks to AI’s enormous promise, giants like Google, Meta, Microsoft, and OpenAI are spending trillions of dollars on data centers, AI chips, and other infrastructure components.

All that AI infrastructure is poised to consume huge amounts of electricity. Goldman Sachs forecasts global data center power demand will surge 220% by 2030 compared to 2023 levels. U.S. data centers already account for 7% of U.S. electric power consumption, a figure that is expected to rise significantly.

This demand is driving a bull market in virtually every form of electric power production. Geothermal energy. Natural gas. Solar energy. Nuclear energy. Hydroelectric energy.

America’s soaring energy demands could even get beaten-down “Small Modular Reactor (SMR)” stocks back up and running.

SMRs are compact nuclear power plants. Unlike conventional nuclear power plants, SMRs are intended to be built in factories and assembled in modules. They take up relatively little space and can safely generate large amounts of power for decades. We know this because SMRs have powered America’s submarine and aircraft carrier fleets for more than 50 years.

SMRs on American soil, however, have not caught on. The technology faces huge regulatory hurdles. Plus, SMRs must be mass-produced in factories to be economically competitive with other power sources. For these reasons, SMRs are currently confined to the hulls of submarines and aircraft carriers.

Bulls on the SMR industry say that’s about to change. They say the technology could play a major role in meeting AI’s soaring energy needs. If the regulatory framework can be worked out, SMRs can be approved, built, installed, and brought online much faster than large, conventional nuclear power plants.

Regular readers know we like to know the bull case for any trend. We like to know forecasts and opinions. However, we care a lot more about what the market thinks of an industry’s merits than what anyone one person thinks.

There’s a handful of publicly traded U.S.-based SMR-related companies. The four highest profile firms are NuScale Power (SMR), Oklo (OKLO), NANO Nuclear Energy (NNE), and X-Energy (XE).

These firms don’t generate much revenue at the moment. Owning these companies is a bet on future breakthroughs, favorable regulatory changes, and future demand. They are more like high-tech science projects than they are profitable operating businesses… and their stocks are extremely volatile. Investing here is like being a venture capitalist in the stock market.

When the market believes in the technology, these stocks can soar hundreds of percent. When there are setbacks with the adoption and progress of the technology, these stocks plummet. SMR stock movements can put roller coasters to shame.

Because of the challenges cited above, SMR stocks have suffered significant declines in market value over the past nine months. NuScale, for example is down 66% over the past nine months. Oklo dropped 70% from its 2025 high.

Recent price action (see below) is encouraging for the bulls, however. NuScale has put in a nascent series of higher highs and higher lows of its recent bottom. Oklo has done the same. Given how virtually all forms of electric power production are enjoying bull markets, now looks like a good time to bet on the speculative SMR theme.

Traders can buy at these levels, set a stop near recent lows, and structure “high upside, low downside” trades on the AI power boom. Widows, orphans, and those with weak stomachs are encouraged to pass.

Here’s how the true market insiders are saying the Iran War will play out

Credit: yujie chen

As of today, May 27, it has been 88 days since the U.S. and Israel began joint military operations against Iran. Despite many White House announcements hinting that a lasting peace deal is close, the war continues.

This means the investment world’s biggest debate of 2026 is still going. You could call this debate “The Doomers vs. The Optimists.”

The Doomers say the Iran War’s constriction of critical Middle Eastern resources such as oil, natural gas, fertilizer, and sulfuric acid will lead to serious economic disruption, then a recession, and then a bear market.

The Optimists say those concerns are overblown… this, too, shall pass… and the economy and stock market will continue to grow.

You can read a thousand opinions and forecasts related to the Iran war and its effects. However, there’s only one source of objective truth: Market prices.

Market prices are the sum total and final expression of all knowledge held by industry insiders, connected money managers, government officials, and bankers who quietly control huge swaths of the economy. These people know 50 times more about their industries of focus than you or I do.

Their knowledge manifests itself through action… and that action that sets market prices. Market prices are not always perfect, but the vast majority of the time, they know hell of a lot more than any economist or investment guru.

If you ever get brain overload from listening to or reading lots of “experts” espousing lots of conflicting opinions about a war, a technology, or the health of the economy, you can easily tune them out and focus on signals that contain more distilled insider knowledge in them than all those experts combined: Market prices.

Last week, I pointed to the extremely strong trucking industry as evidence that the market is siding with the optimists on the Iran War debate.

This week, the market is sending us a similar signal via extremely strong hotel stocks. This morning, the market sent three of the world’s biggest hotel chain operators – Marriott International (MAR), Hyatt Hotels Corp. (H), and InterContinental Hotels Group (IHG) to new all-time highs. Fellow hotel giant Hilton Worldwide (HLT) is a chip shot away from new all-time highs and up 16% YTD.

Big hotel operators are highly sensitive to ups and downs in the global economy. They thrive when people spend lots of money on travel and when businesses are spending freely on conferences, deal-making, and events. As you read this, their stocks are soaring.

Sure, the global economy has problems. It always does. But it also has some positives. And these positives are so strong that the world’s hotel chains are booming.

This is war we are talking about… so anything can happen. But as of right now, the market is siding with the Optimists. Conduct your financial affairs accordingly!

Market Notes

• Our recommendation to invest in the solar energy megatrend remains a huge winner. The Invesco Solar ETF (TAN) jumped 2.25% today to reach a new one-year high.

• Our recommendation to own “soon-to-be-neoclouds” – aka Bitcoin miners – is off to a tremendous start. Riot Platforms (RIOT) sits at a new one-year high today.

• Our March 20 recommendation to get long semiconductor equipment stocks Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC) is still doing well. All three reached new all-time highs this week.

• Our Jan. 21 recommendation to own Redwire (RDW) as a play on the SpaceX IPO has won big. The stock is up 160% over the last month. RocketLab (RKLB), Spire Global (SPIR), and Sidus Space (SIDU) all also hit new highs today. 

• Transportation giant FedEx (FDX) reached a new one-year high today. This is a bullish economic signal.

• Trucking giant J.B. Hunt (JBHT) reached a new one-year high today. This is a bullish economic signal.

• Airline giant Delta Air Lines (DAL) reached a new one-year high today. This is a bullish economic signal.

Regards,

Brian Hunt
Editor, Money & Megatrends

An urgent message from our colleagues:

Critical SpaceX IPO Update: Do this now

Jeff Brown believes the SpaceX IPO (which is set for June 12)… Will unlock the single most explosive artificial intelligence opportunity of this decade. Which is why he’s having an urgent online strategy session this coming Wednesday, June 3, at 8 p.m. ET. Click here to save your seat because he’s going to share details on THREE new recommendations… All with the potential to make up to 50 times more money than SpaceX.

Reserve your seat here.