Category Penny Stocks

Editor’s Note: Market volatility can be scary – much like a rollercoaster ride. As we weather the ups and downs, it can sometimes be difficult to decipher when a pocket of opportunity presents itself, especially during the drops.

Today, my InvestorPlace colleague Louis Navellier is joining us to discuss how the recent market panic has overshadowed strong AI earnings and growth outlooks. He’ll share the five steps you can take to protect your portfolio.

Take it away, Louis…

In 1994, Disney’s Hollywood Studios in Florida opened one of its most ambitious rides yet: 

The Tower of Terror. 

True to its name, the giant elevator ride took audiences on a tour through a towering hotel inspired by The Twilight Zone. Mind-bending stories… haunted tales…. eerie music… 

And once riders reached the 13th floor, the elevator would suddenly stop… then plummet back down the shaft. 

“Tower of Terror” is a fitting description of markets today.  

Unlike roller coasters, where you can usually see what’s coming, the Disney Tower ride gives little indication of the sudden drop about to happen. It’s designed to be unusually terrifying.  

And here’s the most interesting thing: 

While the elevator ride drops as fast as 39 miles per hour, it doesn’t fall very far. Only six stories are actually used as the shaft’s “fall height,” and special illusions are used to fool people into thinking things are worse than they seem. 

So, riders never drop as far as it feels, and they never hit the ground. 

Sound familiar?

It certainly feels like we’ve been on our own terrifying ride in the market here lately. Thanks largely to the “tit for tat” game of tariffs playing out between President Trump and other nations on the world stage, investors are growing concerned about inflation, slowing growth… even the dreaded R-word (recession) is coming up in some discussions.

As a result, the markets have been in seesaw mode. The S&P 500 set a new record high on February 19. But after that, the overall stock market was in a seemingly downward spiral.

Then, last week, the stock market broke a four-week losing streak. Things got off on a positive note this week, as major indices were all broadly higher on Monday and Tuesday, only for things to turn south on Wednesday as a new round of tariff threats emerged.

Today, I want to focus on how this all feels for investors right now – and the five steps to take to protect your portfolio.

A Quick Word of Caution 

Before we begin, it’s important to acknowledge that selloffs are still negative events (I don’t like it when my stocks go down either, folks). 

So, even though the following five things to do during selloffs paint a rosy picture, I recognize that pullbacks still have real costs. Warren Buffett might love selloffs because he has billions in the bank to spend; I understand that most Americans have no such luxury. 

With that said, let’s get to No. 1… 

1. Remember That Markets Are Manic 

The stock market has ignored a lot of great AI news lately. On March 10, for instance, Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) reported that February revenues had surged 43.1% to 260 billion Taiwan dollars. This is a historically strong forward indicator for chip-designing firms like Arm Holdings plc (ARM) and NVIDIA Corporation (NVDA).  

Separately, the Financial Times noted on March 9 that U.S. startups are raising more cash than at any point since 2021 on red-hot AI demand. These fast-growing firms now have more capital to invest – a positive sign for AI infrastructure firms. 

And let’s not forget that NVIDIA wrapped its week-long developers conference last week. There was a host of important announcements made, from the company’s next-generation chips to a critical partnership related to self-driving cars, and more.

But investors have only focused on the negatives lately (mainly tariffs). The media only adds fuel to the fire in situations like this, because every setback in talks, and every ensuing pullback, is covered like it’s a full-blown crisis.

This has sent the prices of many world-class AI stocks into correction territory. As a result, we’re now facing a grossly oversold stock market where phenomenal companies like NVIDIA are trading at incredible discounts. 

2. Keep Your Eyes on the Fed 

Over the past two months, bond yields have decreased as investors have piled into safe-haven assets. (All else equal, a stampede into bonds raises their prices, depressing their yield.) Lower-than-expected inflation reports recently have also further weighed down on yields. 

The upshot is that the Federal Open Market Committee (FOMC) has become much more dovish. In their recent meeting on March 19, Fed Chair Jerome Powell said the Fed would scale back its quantitative tightening efforts. Although the Fed only anticipates two rate cuts this year, most analysts now anticipate three rate cuts.

Now, I expect four cuts. That’s because I expect global interest rates to plummet this year. The fact is economic growth is weak (or contracting) in Asia, much of Europe, as well as Canada and Mexico. As a result, I expect other central banks to continue to slash rates. This, in turn, will cause Treasury yields to decline, and the Fed will not fight market rates.

This is a typically bullish signal for stocks because lower interest rates reduce the “discount rate” applied to cash flows and increase present value. Put simply, falling interest rates make stocks more desirable. 

The effect is even more pronounced for innovative early-stage companies. That’s because their profits are projected far into the future. These positive cash flows must be “discounted” to present value, so even tiny drops in the discount rate can have an enormously bullish effect. (In that sense, pre-profit firms are much like long-duration bonds.) 

3. Rebalance Your Portfolio 

The recent bout of volatility now gives everyone a chance to rebalance portfolios.

“Set-and-forget” investors often leave money on the table. They fail to take profits from overly pricey stocks and miss opportunities when lower-priced opportunities arise. In fact, studies have shown that investors can add more than 100 basis points of annual performance simply by regularly rebalancing their portfolios. (Doing so also comes with the benefit of lower volatility.) 

That’s where my simple 60%/30%/10% rule comes into the picture.  

In my paid services, I like to divide my portfolio holdings into three distinct risk categories: Conservative, Moderately Aggressive and Aggressive. Everyone’s risk tolerance is different, but I recommend allocating 60% of your portfolio to Conservative stocks, 30% to Moderately Aggressive stocks and 10% to Aggressive stocks.  

When you do this, you give your portfolio the perfect mix that will protect and grow your wealth while giving exposure to the kind of home run stocks that will jolt your returns.  

One more thing… Many investors fall into the trap of having too much exposure to one stock. When you have a big winner, it can easily dominate your holdings. While I fully believe in letting your winners run, you have to do it safely. A good rule of thumb is to never let a single company represent more than 10% of your portfolio. 

4. Watch the Technical Factors 

I want to make a comment to folks who are thinking of “buying the dip.” 

Eric and Luke, as well as myself, all fully believe that recession fears are overstated. America’s labor market remains strong, with unemployment at just 4.1%. Manufacturing output is on the rise; February’s ISM Manufacturing PMI rose to 52.7 up from 50.3 the month before. (Any number above 50 represents an expansion.) And even bond markets are only giving a 27% chance of a recession over the next 12 months – not an unusual figure once you realize a recession generally happens every seven years. 

However… 

You should know that stock markets are not rational calculating machines. Again, markets are manic. They’re made up of emotional traders and peppered with stop-loss orders designed to sell indiscriminately when prices fall. Both have a habit of triggering even lower prices, creating even more stop-loss selling, and so on. 

That’s why it’s helpful to pay attention to technical factors – the price movements that influence human and algorithmic traders alike. Specifically, take a look at the 250-day moving average (250MA) on the S&P 500. Nothing good tends to happen below that, and we temporarily dropped below that level on March 10 when the S&P 500 sank below 5,645.  

Last week brought a convincing retake of that level. On Monday, the S&P 500 briefly moved above the 250MA threshold, and then surged above 5,675 on Wednesday after the Fed’s dovish comments. This should be seen as a “green light” to dive back into markets. 

5. Focus on the Fundamentals 

This might be the most important one of all, folks.

For example, of the 11 AI Revolution Portfolio companies that reported earnings last month, nine beat expectations, and another met forecasts. As a group, these 11 firms posted 18% revenue growth and 24% earnings growth, and they are set to increase profits by another 77% by 2026. 

In comparison, the S&P 500 grew earnings 7.1% in the first quarter, while revenue increased 4.2%.

These are phenomenal numbers and serve as a reminder that great investment themes will outlast any market wobble. 

A Rare “Second Chance” on the AI Revolution

Together, these five actions should make you feel more secure… even when it seems like the whole world is falling down.   

Let’s face it: Wall Street’s Tower of Terror has unduly pressured AI companies. Traders are rotating into “safe haven” assets like gold, while turning their back on the high upside promise of the market’s best AI plays. 

The upshot is that when markets bounce back, we believe our fundamentally superior stocks will mount an equally strong rise.

As I like to say, fundamentally superior stocks bounce like fresh tennis balls… And that’s exactly what we hold in our AI Revolution Portfolio. 

So, if you missed out on the big gains from AI stocks since 2023, this is a rare “second chance” to get in on some of the most innovative companies in the world. In fact, our latest batch of picks easily has triple-digit upside in just a handful of months.

That’s why I teamed up with Eric and Luke to deliver a rare special broadcast earlier today.

In it, we revealed why nearly a trillion dollars of new investments could soon flood two little-known corners of the AI Revolution… how it could accelerate the lucrative AND destructive force behind the phenomenon known as the Technochasm… and what you need to do to prepare (and profit).

I urge you to check out our conversation before it’s too late.

Click here now to watch our special broadcast now.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA)

A global trade war has been brewing for weeks. And just a few days from now – on Wednesday, April 2 – it’s about to heat up in a major way. 

That’s the day that U.S. President Donald Trump is set to launch a new set of sweeping reciprocal tariffs against our nation’s trading partners. 

This ongoing drama could end with a fizzle – with the parties involved reaching a solid deal – or a bang – wherein hefty tariffs remain in place and weigh down our global economy. 

Trump has referred to it as “Liberation Day.” From his perspective, these tariffs will free America from its numerous bad trading deals with countries across the globe.

Recent reporting suggests Trump will target the “Dirty 15” on Wednesday – the 15 trading partners with which the U.S. has the largest bilateral trade deficits. That may seem small, as the U.S. does business with over 100 countries. But together, those 15 partners account for more than 75% of all U.S. imports. 

So, by targeting these nations with tariffs, Trump is going after the bulk of America’s imports. 

And if importers pass that cost onto consumers, the pain could be drastic and widespread…

The Three Major Avenues

There are three ways Trump can go after the “Dirty 15.” 

First, he can enact “matching tariffs,” wherein he would simply enforce levies on countries to close the tariff rate differentials. For example, let’s say a country tariffs the U.S. at 5%, but the U.S. only tariffs that country at 2%. With a matching tactic, Trump would slap an additional 3% tariff to match the overall rate at 5%. 

Second, Trump could attack value-added taxes (VATs). These are indirect taxes imposed on goods and services at each stage of production or distribution, rather than just at the point of final sale. Europe has a lot of VATs, and they tend to hit U.S. goods going into European markets. Trump could attack these by exacting new tariffs on countries equal to their VAT rate. 

Third, Trump could pursue non-tariff measures. That is, across the world, there are a lot of regulatory statutes that limit free and fair trade, such as country-specific sanitary standards, quotes, licensing obligations, etc. This is a complex web, but Trump could aim to alter these measures as well. 

Those are the three major ways Trump can go after the “Dirty 15” on Wednesday. 

Tom Yeung here with your Sunday Digest. 

On Wednesday, OpenAI launched a new AI image generator for ChatGPT. 

The system has noticeably few guardrails. Users can ask it to make photorealistic images of celebrities… edit existing images… even trick it into violating copyright laws. Social media feeds have become flooded with AI-generated memes in the style of Studio Ghibli, the popular Japanese animation studio behind films like Spirited Away. 

Source

OpenAI’s newfound “creative freedom,” as its CEO Sam Altman put it, is a response to growing competition from fast-moving AI outfits like Elon Musk’s Grok and China’s DeepSeek. These smaller firms care far less about ruffling feathers than getting ahead, forcing larger players to do the same.  

Even Alphabet Inc. (GOOGL), a company known for its conservative approach to AI, has begun launching semi-complete products to keep up. (Google’s own AI image generator can be used to remove watermarks.) 

This is obviously concerning for those worried about AI ethics and safety… 

• Amazon.com Inc.’s (AMZN) Alexa+ AI devices will have control over smart home devices, including thermostats and cooking ranges.  
• Alphabet’s Gemini AI will soon replace its traditional Google Assistant, giving AI virtually unfettered access to people’s private information.  
• We’re even seeing the development of AI-powered weapons that can shoot drones out of the sky.  

(Will road-raging self-driving cars be next?) 

But the flip side of AI innovation is that it’s creating staggering amounts of new benefits for companies that use AI, their customers, and their investors.  

• Dozens of AI-developed drugs are now in late-stage development.  
• Students can get free homework help from AI chatbots.  
• And hundreds of AI companies have turned thousands of investors into millionaires. 

Shares of Nvidia Corp. (NVDA) have surged nearly 2,500% since May 2019 after InvestorPlace Senior Analyst Louis Navellier added the GPU maker to his Growth Investor Portfolio… saying “AI, is what has me really excited about NVIDIA right now.”  

We’re only getting started.  

In a new special VIP report, The Next 3 Big Winners in AI, Louis, along with fellow senior InvestorPlace analysts Eric Fry and Luke Lango, cover why we’re now moving from an “AI Builders” era to an “AI Appliers” era – and pinpoint three industries that are undergoing this groundbreaking change: 

The first wave of the AI Revolution was focused on the “AI Builders” – the chips, servers, and infrastructure that make AI possible. But the companies that leverage AI to disrupt traditional industries will deliver the next generation of extraordinary returns. We call these companies the “AI Appliers.” 

Our three top analysts put that VIP report out as part of their recent urgent Technochasm briefing. During that free broadcast, Eric, Luke, and Louis went deep onthe emerging divide between the “haves” and “have nots” in the market – and in our society.  

And on how artificial intelligence is pouring jet fuel on that divide. 

During the event, they delivered a step-by-step playbook you need to follow to make the most of this opportunity. 

Check out the replay here.

Now, I’ve been given permission to share the three stocks in that VIP report.  

These are firms that learned to harness the often uncontrollable power of AI. And as the tech world puts their collective foot on the R&D gas, we’re going to see these firms surge ahead. 

Stock No. 1: Powering the AI Revolution 

The first recommendation is a leader in power management chips – the devices that regulate the electricity fed into other integrated circuits. 

It’s an essential task. Spikes in voltage or current can damage or destroy processors, and the risks only grow when more transistors are packed tightly into advanced chips. 

That’s where Monolithic Power Systems Inc. (MPWR) comes in.  

In the late-1990s, the Seattle-based company developed a single (i.e., monolithic) integrated power chip that combined analog, digital, and memory components onto a single device. This technology, known as bipolar-CMOS-DMOS (BCD), is now in its sixth generation and remains the core of Monolithic Power’s competitive edge. 

Monolithic’s focus on BCD technology has worked. The company has grown into a $30 billion firm and is a leading supplier of power chips to data centers, particularly those focused on AI. MPWR also has a strong presence in autonomous vehicles and driver-assisted technologies, where reliability is key.  

In fact, the company raised its guidance during its 2025 investor day on March 20. Management now expects $635 million in first-quarter revenues (up from $625 million) and for adjusted operating profits to come in roughly $10 million higher than previously expected. 

Analysts expect growth to remain strong. Current Wall Street forecasts call for another round of 40% growth in revenues this year, and for full-year operating earnings to almost quadruple to $880 million. That’s because the company is at the forefront of both the data center and “physical AI” trends.  

AI-powered devices like robots, self-driving cars, and security systems will become increasingly prevalent, and all these devices will need the type of power chips that Monolithic provides. So will the data centers that run these devices. 

Of course, broader macroeconomic fears have affected MPWR stock. Shares of the firm have fallen 15% since February on growing concerns over U.S. tariffs on imported vehicles; MPWR generates roughly 20% of its revenues from the automotive sector. This comes on top of a 30% selloff last October after investment firm Edgewater Research warned that Monolithic’s allocation to Nvidia’s Blackwell chips might be affected by quality issues. (So far it has not.)  

So, shares now trade at just 20X forward earnings – well below those of other chipmakers. 

That makes Monolithic Power a rare combination in the AI world: a high-growth innovator trading at a value price. 

Stock No. 2: The Human Factor 

This company’s life began after database firm Oracle Corp. (ORCL) made a hostile takeover bid in 2003 for PeopleSoft, a human resource management system. After a two-year battle, the smaller firm eventually agreed to the takeover, and Oracle would go on to cut 5,000 of their 11,000 employees within a month of the early 2005 acquisition. 

So began Workday Inc. (WDAY), a cloud-based human resource management company founded by jaded former PeopleSoft executives.  

“We didn’t go overboard trying to be profitable,” former PeopleSoft CEO David Duffield later recalled in an interview with Bloomberg. “We earned our profitability from having our employees be happy working hard, loving what they do, and our customers loving what we did for them, and telling others about us.”  

Duffield would become the founder and CEO of Workday. 

The result was the first-ever cloud-native human capital management (HCM) platform. Users could log into Workday’s management system from any device, anywhere in the world, and access the same high-quality software as they would in the office. Workday customers do not have to worry about updates, security patches, hardware, or storage because everything is managed in the cloud. 

That’s turned Workday into the largest HCM company in its class. The firm now serves more than 60% of Fortune 500 companies, and its flexible software allows it to cater to medium and small businesses as well. 

That’s why rapid improvements in AI will have an outsized impact on Workday. The firm’s cloud-based approach means new AI products can be immediately rolled out to existing customers, and the required AI computing power can be offloaded to the cloud.  

For instance… 

• Recruiting. Workday has products that can assist in reducing manual tasks for recruiters, including automated screening large volumes of job applications and creating new job requisitions. The firm also offers Workday Skills Cloud, which uses AI and machine learning technology to suggest the right job skills for particular roles. 
• Talent management. Workday Skills Cloud (the same one used for recruiting) can also be used to keep track of internal skills, which can be used to suggest individualized gigs, mentors and opportunities for internal mobility. 
• AI assistant. Finally, the firm has developed products like Workday Assistant and Workday Peakon Employee Voice to help across routine HR and finance tasks. Users can ask questions using natural language and receive quick answers based on the context of their role, location, and needs. 

The recent market selloff now provides an unusually attractive entry point for Workday. Shares trade at just 29 times forward earnings, compared to its five-year average of 47X. Much like Monolithic Power, Workday is a fast-growing AI applier trading at an excellent price. 

Stock 3: The “Amazon” of Manufacturing 

For years, 3D printing companies have struggled to turn a profit. There were too many firms (over 1,000 by one count), and they were stuck selling to a market that did not exist.

Large mass producers consume vast amounts of raw materials, so they cannot afford the high prices of the metal powders and specialty resins that 3D printing requires. Meanwhile, smaller players that produce custom parts often cannot afford the high upfront cost of 3D printers. 

Xometry Inc. (XMTR) is beginning to solve that issue. 

Rather than sell 3D printers, Xometry sells the service of 3D printing. Users can log onto the company’s website, upload designs, and receive instant quotes for the number of units they need produced. Xometry then handles the rest without its customers ever seeing a 3D printer. 

At the core of this business is an AI-powered marketplace that matches buyers of custom-manufactured on-demand parts with sellers that can produce them.  

For instance, if a buyer wants a new 3D-printed propeller for a flying drone, they can upload engineering schematics to Xometry’s website. The design is then automatically analyzed and matched with a producer willing and able to make the product. Price quotes happen instantaneously. 

That’s turned Xometry into an incredible growth story. Revenues have surged from $80 million in 2019 to $545 million in 2024. It remains on track to reach $1 billion by 2028. 

As for AI… several trends are converging to help Xometry continue its growth. 

The first is the company’s AI-powered system itself. The company has continued to improve on its matching algorithms, which has helped push gross margins higher. The firm is increasingly able to pair buyers with lowest-cost producers, allowing it to take a larger cut in between. 

The second is improvements in AI modeling. Generative AI can now improve age-old products like shock absorbers and bicycle pedals, and 3D printing is often required to bring these structures to life. 

The final point is more long term. As Eric, Louis, and Luke explain in their special report, global manufacturing is shifting toward AI-driven, on-demand production, and Xometry is perfectly positioned to capture massive growth. 

The AI Revolution Is Happening… Don’t Miss Out 

In 2020, Eric, Louis, and Luke released a series of videos outlining a concept they called the “Technochasm.” This was a warning that technological progress would create an enormous divide across ordinary Americans. 

On one side are the “haves,” or those who got in on the right side of history. These are the people who will benefit from innovations like AI, or invested early enough in these firms. 

On the other side are the “have-nots,” or those on the wrong side of history. This unfortunate group will see their jobs replaced by AI… their portfolios crushed by firms like Nvidia… and end up getting left behind. 

Fortunately, these three picks tell us that the AI Revolution is still only getting started. So, even you didn’t invest in Nvidia in 2019, there’s still time to make up lost ground. (And if you’re one of the lucky ones who did, then you know how important it is to keep staying ahead.) 

That said, we all know that traders are now rotating into “safe haven” assets like gold, while turning their back on the high upside promise of the market’s best AI plays.  

The upshot is that when markets bounce back, fundamentally superior AI stocks will mount an equally strong rise. 

That’s exactly the sort of stocks that Eric, Luke, and Louis are talking about in their new Technochasm briefing.  

So, if you missed out on the big gains from AI stocks since 2023, this is a rare “second chance” to get in on some of the most innovative companies in the world. In fact, their latest batch of picks has triple-digit upside in just a handful of months. 

That’s why Eric, Luke, and Louis just teamed up to deliver their urgent AI broadcast. 

In it, they reveal why nearly a trillion dollars of new investments could soon flood two little-known corners of the AI Revolution… how it could accelerate the lucrative AND destructive force behind the Technochasm… and what you need to do to prepare (and profit). 

I urge you to check out their conversation before it’s too late. 

Click here to watch their special free broadcast now.

And I’ll see you back here next Sunday. 

Regards, 

Tom Yeung 

Markets Analyst, InvestorPlace 

This coming Wednesday, April 2, the global economy could take a lasting turn for the worse. 

American investors and civilians alike have been sweating the ongoing threat of tariffs for more than a month now. And next week could hold the most impactful tariff announcement of all…

If the U.S. and its trading partners walk away from the negotiating table without securing many helpful deals, worldwide trade could freeze. The global economy could plunge into a recession, and stocks could crash into a nasty bear market. 

The financial fallout could be devastating… meaning now is the time to prepare for that potential outcome.

Now, what exactly is about to take place?

“Liberation Day.” 

Of course, that’s what U.S. President Donald Trump is calling it. On Wednesday, April 2, he is set to announce a huge new batch of tariffs that could reshape the global economic system, liberating America from bad trading deals, as he sees it. 

But those tariffs – if they stick around – could have a significant impact on the economy. They could drag us into a recession as bad as – or perhaps even worse than – that of the 2008 financial crisis. 

Here’s why… 

The Potential Outcome of More Sweeping Tariffs

Tariffs are a tax on imports. That means that any U.S. company that imports any good or material will now pay more for it if it is tariffed. And on “Liberation Day,” Trump promises to enforce tariffs on a lot of different imports. 

Companies will be forced to either absorb those higher costs (and shrink profit margins), pass on those higher costs to consumers (and raise inflation), reorganize supply chains (and cause business disruptions), or some combination of the three. 

No matter which path U.S. companies choose, a negative growth shock is likely. 

Look no further than the Institute of Supply Management’s Manufacturing and Services recent surveys from February 2025. They are arguably the two most widely followed business sentiment surveys for the U.S. economy’s manufacturing and services sectors. 

Therein, one accommodation and food services firm said:

“Tariff actions have created chaos in information and pricing measures, forecasting and forward buys, which may artificially inflate purchases to be followed by a drop off.” 

A construction firm noted: 

“Implementation of tariffs will have a significant cost impact to our projects. The majority of the capital equipment we purchase is not manufactured in the U.S., or components that make the equipment come from overseas manufacturers. We are also seeing U.S. prices already rise in anticipation, which is a similar reaction of the U.S. suppliers when the previous tariffs were introduced.”

An information services company commented: 

“Tariffs are going to have a ripple down effect that could severely harm our business.” 

And one machinery firm said: 

“The incoming tariffs are causing our products to increase in price. Sweeping price increases are incoming from suppliers.”

It seems inarguable. A global trade war will slow the economy. If it lasts – or gets worse – it could crush most folks’ financial wellbeing. 

And it could all come to a head in just a few days.

Hello, Reader.

Before we get to today’s Smart Money, I want to thank everyone who joined us for our urgent Technochasm briefing on Thursday.

This is where I joined my InvestorPlace colleagues Louis Navellier and Luke Lango to discuss the divide between the “haves” and “have nots” in the market – and in our society. And it’s all being fueled by artificial intelligence.

During that broadcast, we delivered a step-by-step playbook you need to follow to make the most of this opportunity. Check out a free replay here.

And now that we’ve arrived at the weekend, the first full week of spring has come and gone.

During this time, maybe many of you tackled the seasonally daunting “Spring Clean,” confronting typically sealed junk drawers and closet doors. You know, those abandoned spaces home to chargers of cell phone models past… or a dusty collection of DVDs, cassettes, and their players.

These items have seen their heydays come and go, finding themselves obsolete (or close to it)

This technology cycle is normal. But according to Bill Gates, humans may soon join this list of the obsolete.

In a recent interview, the former CEO of Microsoft Corp. (MSFT) said that he believes humans won’t be needed “for most things.” Over the next decade, Gates said, “great medical advice [and] great tutoring” will become free and commonplace.

And it’s all because of AI… especially now that we’re seeing the rise of physical AI.

And one company is leading the charge.

So, in today’s Smart Money, let’s take a look at this company’s recent physical AI advancements.

Then, I’ll share a timely way that you can take advantage of the growing opportunity in physical AI.

Let’s dive in…

AI, Robot

As its name implies, “physical” AI brings together the digital and physical worlds. It allows autonomous machines like robots and cars to perceive, understand, and perform complex tasks, as the kids say… IRL.

Last week, Nvidia Corp. (NVDA) hosted its annual GPU Technology Conference (GTC). That’s where the AI chip maker showcases its latest hardware, software, and services, drawing together developers, engineers, researchers, and more.

But this year, Nvidia CEO Jensen Huang wasn’t joined onstage by an engineer or researcher during his keynote address. Instead, he was accompanied by “Blue,” a small, physical AI robot reminiscent of Pixar’s Wall-E.

Source: Tech Startups

Blue is built to redefine robotic movement and learning, improving precision in simulations and real-world interactions. It is powered by a physics engine made in partnership with the Walt Disney Co. (DIS) and Google DeepMind.

Blue interacted with Huang onstage, following his direction to move around. (Despite Gates’s warning… keynote speaking, at least, remains very much on our human “can do” list. Blue could only engage vocally with robotic chirps.)

In the beginning of the year, Nvidia launched a new family of foundational AI models called Cosmos, which are specifically designed to train physical AI robots like Blue to navigate the real world.

And at the GTC event, the company released new iterations of the Cosmos models. This includes the world’s first reasoning model for physical AI development.

“Just as large language models revolutionized generative and agentic AI, Cosmos world foundation models are a breakthrough for physical AI,” Huang said. “Cosmos introduces an open and fully customizable reasoning model for physical AI and unlocks opportunities for step-function advances in robotics and the physical industries.”

Physical AI and Your Portfolio

The development of physical AI will have enormous consequences for real-world tasks (and, as Gates predicts, for all of us).

That is why Louis, Luke, and I just released a brand-new special report that details our top three picks prepared to dominate the physical AI space. You can learn how to access this report in our special Technochasm broadcast.

Alongside physical AI, we’re also beginning to see the rise of AI agents. AI agents are essentially like the brain behind a smart assistant or AI robot. These AI models will be able to independently navigate the digital world – analyzing vast amounts of data, making real-time decisions, and executing complex workflows.

These two emerging forms of AI will quickly impact our daily lives in big ways, creating a divide – a Technochasm – so sharp that investors will either leap ahead… or get left behind.

Louis, Luke, and I will keep finding the companies set to benefit from the rise of both physical AI and AI agents… and can help you keep on the right side of the growing technology divide.

Click here for free broadcast and learn more.

Regards,

Eric Fry

Why the AI Boom Isn’t like the Dot Com Era – and What Comes Next

Earlier this week marked a significant milestone in market history.

It was 25 years ago on March 24, 2000, that the Dot Com bubble burst.

On that day, the S&P 500 posted a record level it wouldn’t see again until 2007.

The S&P lost almost half its value before it reached its nadir on October 9, 2002.

The tech-heavy Nasdaq was hit even harder. From its peak on March 10, 2000, the index would drop almost 78% to its bottom on the same date, October 9, 2002.

It wouldn’t recover for more than 15 years.

Many people compare the current AI investing megatrend to the Dot Com bubble. They warn that the AI megatrend is going to have a similar bust soon, and it will be just like 2000 all over again.

Another 15 years lost as the market slowly recovers.

But the comparison doesn’t hold up.

Why This is Not a “Dot Com” Market

The poster child for the Dot Com Bubble is Pets.com. This was an online pet supply retailer, much like Chewy today. Older investors may recall its Super Bowl ad featuring a sock puppet mascot.

In 2000, its IPO had them trading at $11 a share. But they were losing money fast from Day 1 and went bankrupt that same year.

During the Dot Com bubble, companies focused on “eyeballs first” rather than profits. But in too many cases, the profits never materialized.

In contrast, the AI Megatrend winners are companies that are expanding earnings with AI. The poster child is, of course, Nvidia (NVDA).

NVDA has beaten EPS estimates every quarter since the beginning of 2023.

Source: Alphaquery.com

But just because the AI Megatrend isn’t a bubble that doesn’t mean there isn’t danger lurking.

If you’re not careful, you could fall into a familiar trap.

Market Echoes from 2020

It was back in 2020 that InvestorPlace’s big three analysts – Louis Navellier, Luke Lango and Eric Fry – started to warn people about the “Technochasm.”

If you’re not familiar, the Technochasm refers to the vast wealth divide in the United States that is caused, in large part, by technology.

At the heart of this warning was a prediction – the future will be populated by two types of people: those who invested in top tier tech companies who would watch their portfolios grow, and those who didn’t invest in tech, or simply held old-school stocks for much too long, who would watch their balances shrink.

Credit: TarikVision

The skyrocketing inflation of the Biden years only made this warning more ominous. Folks who didn’t own the best tech assets watched the value of their portfolios stagnate or even erode.

This week, our analysts doubled down on this warning.

And the stakes are higher than they’ve ever been.

America’s Best in a Race to the Top

On his first day in office, President Donald Trump rescinded President Joe Biden’s executive order that sought to restrict the development of more powerful generative AI tools.

On his second day in office, Trump met with executives from leading technology firms including Sam Altman, CEO of Open AI; Larry Ellison, chairman of Oracle; and Masayoshi Son, CEO of SoftBank. Together, they announced “Project Stargate” – a $500 billion private sector investment in AI infrastructure.

“Beginning immediately, Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI, and this will include the construction of colossal data centers,” Trump said.

America hasn’t undertaken a project this important since the Manhattan Project – the effort that developed the atomic weapon during World War II.

The brightest minds and most powerful companies in America are all working to ensure that the most powerful technology of our time is controlled by U.S. companies. 

This effort could lead to nearly a trillion dollars of funding and investments into a specific corner of the markets over the next few years.

When that much money is moving around, there are select opportunities for investors to build their wealth quickly. A small handful of stocks could be the biggest winners as this money starts to spread throughout the economy and the stock market. 

The gains we’ve seen from the first two years of the AI Megatrend have been impressive, but the coming gains could be bigger still. 

In this exclusive presentation, Louis, Luke and Eric show the “smoking-gun” evidence that we are nowhere near the top of this epic bull run in AI.

Bottom Line: if you missed out on the big gains from AI stocks since 2023, you have a rare second chance to get in on some of the most innovative companies in the world – through the AI Revolution Portfolio. Our three analysts believe their latest batch of picks easily has triple-digit upside in just a handful of months.

In this presentation, Louis, Luke and Eric reveal why nearly a trillion dollars of new investments could soon flood two little-known corners of the AI Revolution… how it could accelerate the lucrative AND destructive force behind the Technochasm… and what you need to do to prepare (and profit).

The AI Megatrend isn’t the Dot Com bubble.

Your biggest risk may be hesitating to take advantage of this rare second chance opportunity to grow your wealth.

Enjoy your weekend,

Luis Hernandez

Editor in Chief, InvestorPlace

There’s one word that has the uncanny ability to put Wall Street on edge these days.

Utter it once, and investors are spooked. Markets are thrown into a tailspin.

Tariffs.

But it’s not just investors – company executives are concerned, too. Consider this from FactSet. More than half of the S&P 500 companies (259 to be exact) mentioned “tariffs” in their earnings calls from December 15 to March 6. That’s the most in 10 years.

So, I think it’s safe to say a lot of folks are concerned about Trump 2.0’s tariffs. Everyone is nervous about the impact it will have on consumer goods prices. 

What’s more, people worry the tariffs will drag on growth. Add these two together, and it could cause the Federal Reserve to delay cutting key interest rates.

So, I’d like to talk about the ongoing tariff spats in today’s Market 360.

The reality is I expect the uncertainty surrounding the Trump 2.0 tariffs, inflation and economic growth to begin dissipating soon. That’s because once April 2 rolls around – or as President Trump calls it “Liberation Day” – we should get a lot more clarity on the situation.

So, today I’ll cover the latest developments. Then, I’ll explain what the real goal is behind these tariff threats – and why I don’t think investors should be too concerned.

You see, it’s all part of a larger strategy to rebalance the way we do business – and set the stage for a U.S. economic renaissance.

To wrap things up, I’ll explain how I think you can best position yourself to profit.

What’s Happened So Far

Here’s a quick rundown of where things stand.

You may recall that President Trump imposed 25% tariffs on Canada and Mexico as well as 10% on China last month. Initially, Canada and Mexico were able to negotiate deals to delay the tariffs, but they ultimately went into effect on March 4.

China’s 10% tariffs, however, were imposed right away on February 4, and were later raised to 20%.

Then came a 25% tariff on imported steel and aluminum, followed by a retaliatory threat from the European Union – $28 billion in counter-tariffs on U.S. goods. Trump responded with the possibility of a 200% tariff on European spirits.

This past Tuesday, he signed an executive order placing a 25% tariff on oil imports from countries that buy directly from Venezuela. And on Wednesday, he announced a sweeping 25% tariff on foreign-made vehicles and certain auto parts.

But here’s the kicker, folks.

Alongside these measures, President Trump made some vague references to placing “reciprocal” tariffs directly on U.S. trading partners and allies.

The deadline: April 2 aka “Liberation Day.”

What’s Behind “Liberation Day”?

That really put investors on edge. But this week the White House clarified that those tariffs will be more targeted than initially feared. Trump 2.0 is focusing on a list of 15 countries that have had persistent trade imbalances with the U.S.

Treasury Secretary Scott Bessent has dubbed them the “dirty 15.”

Among those countries? China, Mexico and Vietnam.

Mexico’s trade surplus with the U.S. has ballooned in recent years – in part because China has used Mexico as a workaround, doing subassembly there and importing under the old NAFTA structure.

Vietnam, which now has the third-largest U.S. trade surplus after China and Mexico, has already responded. It announced it would lower tariffs on certain U.S. products like liquefied natural gas and vehicles – a clear sign that countries are preparing to negotiate rather than retaliate.

And that’s the point here, folks. The hysterical financial media has promoted the narrative that these tariffs will be catastrophic for the U.S. economy – and that President Trump is hellbent on destruction.

Nothing could be further from the truth.

This is all about leverage, plain and simple.

For example, let’s consider the 25% tariff on imported vehicles.

Trump’s executive order applies the tariff across the board, but there’s an important carve-out. Under the United States-Mexico-Canada Agreement (USMCA), the tariff will only apply to non-U.S. content in vehicles. This is a detail that rewards companies that already manufacture more of their vehicles here at home.

Trump has long encouraged automakers to shift production to the U.S. He’s noted that the U.S. offers cheaper electricity and labor costs, as well as less oppressive regulations.

Now, with these new tariffs, companies like BMW, Mercedes-Benz Group AG (MBGYY) and Volkswagen AG (VWAGY) will have even more incentive to expand their U.S. manufacturing footprint.

What’s the Endgame?

This strategy isn’t limited to cars.

So far, $1.2 trillion in technology onshoring has already been announced. If pharmaceutical and auto companies follow that lead, we could be looking at several trillion dollars in new domestic investment.

That’s the goal here, folks. At the heart of it, Trump’s tariff strategy is two-fold:

1. Level the playing field – “What they charge us, we charge them.”
2. Encourage onshoring to avoid tariffs altogether.

Both goals are designed to strengthen the U.S. economy – and both are already working.

The fact is, once the April 2 “Liberation Day” deadline passes and the rules of the road are better understood, much of the uncertainty plaguing the market should fade away. Clarity, optimism and strong corporate earnings – along with lower interest rates on the horizon – could give stocks the push they need to move higher.

The Bottom Line

So, if clarity is coming, but things are still volatile and uncertain right now, how should you invest?

The answer is simple: Buy fundamentally superior stocks that bounce!

Right now, we’re closing out the first quarter. And that means quarter-end window dressing is in full effect.

This is when institutional money managers clean up their portfolios before client meetings by dumping underperformers and piling into the best names.

That’s where my Accelerated Profits Buy List shines. My stocks are characterized by 155.6% forecasted annual earnings growth and 26.7% forecasted annual sales growth – and they’re backed by strong analyst revisions, which typically lead to earnings surprises.

These are the stocks that hold up when the market gets choppy – and sprint ahead when things turn around.

So, I don’t want you to let the tariff headlines throw you off track.

See, this is all a part of an effort to push for fairer trade, to encourage onshoring and put in place policies that will create long-term growth.

The reality is that once everything is in motion, I expect growth to accelerate drastically – especially as Trump 2.0 clears away more red tape and unleashes the next wave of innovation in the AI Revolution.

You see, I think we’re about to see a massive convergence between Trump’s pro-business policies and the seemingly exponential progress of AI. And as this Trump/AI Convergence happens, I expect it to unlock powerful gains for investors.

My Stock Grader system (subscription required) has identified the companies best positioned to thrive in this new era – stocks with superior fundamentals and persistent institutional buying pressure.

Click here to learn more.

(Already an Accelerated Profits subscriber? Click here to log in to the members-only website.)

Sincerely,

Louis Navellier

Editor, Market 360