As I mentioned last week, $100 trillion is a lot of money.
That’s almost five times larger than the size of the U.S. economy … and it’s also the size of the industries that leading chipmaker NVIDIA Corp. (Nasdaq: NVDA) is targeting as it expands its reach into artificial intelligence (AI).
Let’s see how AI technology will change these well-established industries, starting with automakers.
AI Will Change the Way We Drive
Over the past decade, the global auto industry sold about 70 million cars per year. Last year, those sales totaled about $2.7 trillion.
This is just passenger cars, by the way. We haven’t said a word about large trucks, buses and other vehicles sharing the road with those cars.
We’re not quite to the point where you can take a nap in the back of your car while it drives itself, but we’re getting there. Autonomous driving technology — which relies heavily on AI to make critical decisions — is still a novelty. All newer Teslas are, at least in theory, capable of driving themselves, and many high-end cars have “semi-autonomous” features like adaptive cruise control, emergency braking and lane departure warnings.
Now think about the massive investment that will be needed in processing power once autonomous driving tech enters the mainstream … when tens of millions of new vehicles every year will use AI to drive themselves.
And this is just one application for AI.
Cars make headlines because we’re a car-driving culture. The idea of owning a self-driving car is both exciting and terrifying. But the auto market is just the tip of the iceberg in terms of what AI can do and how it will change our lives.
10 Times More Disruptive Than the Internet
Mark Cuban, billionaire tech investor and the owner of the Dallas Mavericks, put it like this: “If the internet was 10X in terms of change to business, artificial intelligence will be 100X or MORE.”
Really let that sink in.
I started my career in the post-internet era, so I never experienced life in an office before internet use became the norm.
But I do remember having to do research projects in the school library as a kid … and I think about how utterly foreign that would seem to any young person today.
The internet fundamentally changed the way we consume and process information. It revolutionized the world.
And AI stands to do the same … but 10 times bigger.
Technology this disruptive will make its presence felt in the stock market.
Cathie Wood, founder of Ark Invest and one of the most successful fund managers of recent years, expects AI to add $80 trillion in value to the stock market over the next 10 years. That’s about double the current size of the entire S&P 500!
She isn’t suggesting that the S&P 500 will double over the next 10 years. She’s saying the increase in market value due specifically to AI will create new wealth worth double the value of the S&P 500 today.
And her numbers could end up being conservative!
In Green Zone Fortunes, I’ve been actively looking for opportunities in the AI space but I’m steering clear of autonomous cars for now because I’ve set my sights bigger.
One sector in particular holds the greatest potential for investors that want to follow the AI mega trend.
And I’ve found my No. 1 stock within this fastest-growing sector of the AI industry’s $80 trillion boom over the next decade.
To good profits,
Chief Investment Strategist