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In 1844, American inventor Samuel Morse transmitted the first long-distance telegraph from Washington, D.C., to Baltimore: 

“What hath God wrought?” 

Besides ushering in the age of instant long-distance communication, that message was also one of the first practical applications of electricity. This awesome power (considered an almost magical force for thousands of years) could now be used to send notes about your great aunt’s health. 

Over the next century, scientists would dramatically improve our control over this power. Electricity went from brute-force tasks like pulsing messages along wires to finer ones, like transmitting video across the air.  

But nothing could prepare the world for 1964, the year the MOSFET transistor was invented. 

This “transistor moment” was a game changer. Suddenly, electricity could be used for computing… a task so complex that it had previously been the domain of mechanical contraptions the size of rooms. It was only a matter of time before we saw the first personal computer (1971), the first laptop (1981), and the World Wide Web (1989).  

Investors who bought the right companies in this technological revolution became overnight millionaires. 

We believe that quantum mechanics is about to have that same moment. 

You see, quantum mechanics is a similarly confusing science. Like electricity, it’s: 

1. Usually invisible, 
2. Behaves in totally unintuitive ways,  
3. And has taken decades to understand. 

And just like electricity in 1964, we’re now finally moving from using quantum mechanics in brute-force settings to the finely tuned ones that computing chips need. 

It’s happening faster than anyone imagined. 

In a special presentation later this week, InvestorPlace Senior Analyst Louis Navellier takes a brief break from market jitters to focus on a big-picture idea that he believes will change the world, much like the transistor did. 

On March 20, during the company’s first ever “Quantum Day,” Nvidia Corp. (NVDA) may announce a new breakthrough technology that is poised to ignite the next phase of the AI supercycle 

And one tiny small-cap company is positioned to be crucial to Nvidia’s Q Day reveal, thanks to its technology protected 102 patents. 

So, on Thursday, March 13, at 1 p.m. Eastern, he’s holding a special time-sensitive briefing to get you ahead of the news. Click here to sign up for the free event.  

I know this sounds like a lot. So, in this special Sunday InvestorPlace Digest, I (Tom Yeung) am going to: 

1. Introduce some of the basics of quantum computing, 
2. Explain why it’s so important to watch Louis’s presentation,  
3. And show how to invest your money in preparation for this tectonic shift. 

Let’s start with the what of quantum mechanics: 

What is it, and how does it work? 

It’s Quantum Mechanics, Not Sorcery 

In 1955, the cesium atomic clock became the first machine to rely on quantum mechanics.  

Researchers used finely tuned microwaves to blast cesium atoms into a “superposition” state, where they are in more than one energy state at once (grounded and excited). The physicists converted the energy difference between these two quantum mechanical phases into oscillation periods, creating the second-long “pendulum” that remains the global standard for time today. 

Essentially, quantum mechanics is the science that describes the behavior of atomic and subatomic particles. Physics can get very strange at a small size, and many of the “rules” that apply to our regular world simply do not when you shrink things small enough. For instance: 

• Quantum tunneling. Particles can vanish when they hit an obstacle, only to reappear somewhere else 
• Quantum entanglement. Photons (light particles) can influence each other, even if they are separated by miles of fiber optic cable. 
• Quantum states. Atoms can “exist” in multiple states, much like the cesium atoms in an atomic clock. These states can even change simply by observing them. 
• Electroluminescence. Excited electrons can release energy as photons, turning electricity into pure light. 

Now, I know much of this seems very odd. Some of this might even sound entirely made up… 

But let me be clear: Quantum mechanics is a real phenomenon that’s been known about since 1900. In fact, many common items already use these principles. MRIs… solar panels… and even the LED bulbs in your home rely on some form of quantum mechanics.  

And now, the greatest prize is knocking at our doorstep. 

One that’s going to change how we see the world.  

And that’s because we’re on the verge of using the fantastical “magic” of quantum mechanics in computing. 

So next, let’s consider why quantum computing is so important in the first place… 

Bringing the “Quantum” Into Computing 

The rationale for using quantum mechanics in computers is relatively straightforward: 

Subatomic particles can do things that electricity simply cannot. 

For instance, modern electrically powered computers run on “0”s and “1”s to store data and calculate outputs. It’s the same binary code we’ve used since the days of punch cards, and it makes certain calculations particularly time-consuming.  

For instance, breaking an encryption key involves testing every possible combination, one by one, until the answer is found. 

Meanwhile, quantum mechanics allow things to be “0” and “1” at once… and any number in between. A computer using quantum states could theoretically store far more data in a single place and perform calculations that a binary system can only dream of doing.  

That same encryption key could theoretically be broken within seconds by a quantum computer because these machines could test thousands… if not millions…of password combinations all at once. 

Or consider the physical limitations of modern microprocessors. Today’s chips are essentially billions of tiny grooves etched onto a semiconductor that channel electric charges from one place to another. (Think of a colony of ants delivering information through a maze of tunnels.) 

We’re now reaching a point where these tiny grooves are becoming too small to conduct electricity. In other words, these tunnels are becoming too narrow for these “ants” (i.e., electrons) to squeeze through. 

But what if we could harness the concepts of quantum tunneling or quantum entanglement? Under the right conditions, we could teleport “ants” straight to their destination… or even to an anthill halfway around the world.  

That would shake the very foundation of computing itself (as well as create some very confused insects). 

Where’s My Quantum Computer? 

Of course, moving quantum physics into computers has proved challenging. The original cesium atomic clock required beaming microwaves at a “fountain” of cesium-133 atoms, and modern versions still require supercooled metal streams to be injected in a vacuum. You can’t etch that onto a microchip. 

Even getting these atoms to “calculate” anything has been difficult. Atoms and subatomic particles have a habit of disappearing into their environment, and it took until 1998 for the first “quantum computer” to be built. (Even then, the experimental device could only keep track of its two carbon-13 atoms for several nanoseconds.) 

One big breakthrough came in 1999 after a team of Japanese researchers discovered the “charge qubit,” an electric circuit with quantum mechanical properties. Below is a simplified electrical diagram of this concept. (The electrical engineers out there will quickly recognize it as a variation of an LC circuit that uses a capacitor/inductor combination to create an oscillation.) 

source

Another innovation came in 2007 when researchers at Yale used several charge qubits to create the “Transmon qubit.” This new circuit protected qubits from outside charge noise, allowing them to be stored for usable periods. Below is a diagram of this more advanced idea. 

source

Since then, innovation in quantum computing has accelerated.  

In December 2024, Alphabet Inc. (GOOGL) stunned the world by launching a quantum processor named Willow with 105 transmon qubits. And in the past month, we’ve seen “quantum chip” announcements from Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) claim similar advances.  

It’s only a matter of time before these prototypes turn into a commercially viable product. 

So, that brings us to the final question of this update… 

Where are we now, and what should investors do next? 

Where Quantum Computing Is Today 

Today, the greatest challenge faced by quantum computing is fixing the errors produced by the fragile nature of qubits. 

You see, environmental disturbances and other “noise” tend to produce errors in every few hundred quantum calculations. A single qubit might have a 1-in-500 chance of making an error, while a two-qubit system has a 2-in-500 chance rate, and so on. That means a 1,000-qubit chip would almost certainly make mistakes without error correction. (Most experts agree usable quantum chips will need several million qubits to be useful.) 

Alphabet’s Willow is a leap forward because it uses qubits to monitor each other for errors. In theory, its 105-qubit chip can correct roughly three errors at once – a figure that should grow the more qubits you add. 

Microsoft and Amazon are also exploring other types of qubits that may someday surpass transmons. The former is exploring “topological qubits,” a mesh that can store quantum information on its surface. That would make it exceedingly easy to scale, because adding more qubits can be done by simply adding more surface area. The latter is using “cat qubits,” which use microwaves to keep qubits in a suspended state. 

These efforts are much like those at Bell Labs in the 1950s and 1960s that turned the original 1947 transistor prototype into usable “MOSFET” chips. No one quite knew which approach would work.  

But once they discovered them, MOSFET chips quickly took over. They remain the backbone of every modern microprocessor today. 

Now, Wall Street legend Louis Navellier believes he’s found the “Bell Labs” of quantum computing. 

Or rather… it’s two companies that could end up working together to produce the first-ever commercially viable quantum chip. 

The first is Nvidia Corp. (NVDA), a firm that realizes it faces an existential threat from quantum computers.  

Quantum chips could become supremely good at breaking encryption… solve protein folding… and perform hundreds of other tasks that MOSFET-based chips struggle with. Nvidia’s management realize they need to end up on the right side of history. 

The second company is a tiny firm that Louis will reveal in his exclusive presentation on Thursday, March 13, at 1 p.m. ET (reserve your spot here). 

This startup is working on the bleeding edge of one of the qubit technologies I mentioned above. And Louis believes it just might become the next Bell Labs of the Quantum Age. 

But investors can’t wait long to get in on the ground floor. While Wall Street is losing sleep over the latest tariff news, this innovative firm is pushing ahead with creating the world’s next “transistor moment.” 

Reserve your seat for Louis’s free event by clicking here. 

Until next week, 

Thomas Yeung 

Markets Analyst, InvestorPlace 

Editor’s Note: Many investors are feeling bearish on the market right now. Since the late 1980s, the percentage of bearish investors in the survey has surpassed 60% only six times before: twice in late 1990, twice during the 2008 financial crisis, and twice during 2022’s red-hot inflation plight.

Every previous occasion that investor sentiment was as negative as it is today, stocks were in the process of bottoming after a crash. Then they proceeded to soar over the next 12 months. Average forward 12-month returns? Nearly 30%!

This data doesn’t mean stocks are guaranteed to soar over the next 12 months.

But my InvestorPlace colleague Luke Lango is joining us today to explain why he believes it is a noteworthy data point that suggests maybe we should be greedy now when others are fearful.

Take it away, Luke…

You’ve probably heard Warren Buffett’s famous saying: “Be greedy when others are fearful.” 

Others are certainly fearful right now. According to the weekly American Association of Individual Investors (AAII) survey, ~60% of individual investors are feeling bearish on the market right now. 

Let’s put that number in context… The AAII has been conducting this survey since the late 1980s. In that time, the percentage of bearish investors in the survey has surpassed 60% only six times before. We saw surges like this twice in late 1990, twice during the 2008 financial crisis, and twice during 2022’s red-hot inflation plight. 

In other words, investor sentiment is historically negative right now. 

Who can blame them? 

We’re in the midst of the biggest global trade war in nearly a century. Layoff announcements last month spiked to their highest level since July 2020, surging 245% to 172,017. Consumer sentiment is crashing, -9.8% from January, according to the University of Michigan’s survey. Federal spending cuts are rattling the job market. One estimate for U.S. GDP growth has plunged from +2.3% last quarter to -2.8% this quarter. 

Things look bleak right now. No wonder investors feel so bearish. 

But history suggests that when investors are feeling this bearish, it is always a good time to be buying stocks… 

Bearishness Can Be a Contrarian Indicator

In late 1990, when the number of bearish investors spiked above 60% in the AAII’s weekly survey, the stock market was in the final innings of a big crash. Between mid-July and mid-October 1990, the S&P 500 lost ~18%. Then, over the next 12 months, the index rose more than 20%. 

In late 2008 and early 2009, when the number of bearish investors again spiked above 60%, the market was in the final innings of another big crash. Stocks plunged around 30% between mid-October and mid-March – but soared more than 60% higher over the next 12 months. 

In late 2022, when the number of bearish investors most recently spiked above 60%, the stock market was – you guessed it – in the final innings of a crash. Between mid-August and September’s end that year, stocks slid more than 16%. Over the next 12 months, the market rallied about 20%. 

In other words… every previous occasion that investor sentiment was as negative in the AAII’s weekly survey as it is today… stocks were in the process of bottoming after a crash. Then they proceeded to soar over the next 12 months. 

Average forward 12-month returns? Nearly 30%!

The Final Word

Of course, this data doesn’t mean stocks are guaranteed to soar over the next 12 months. 

But it is a noteworthy data point that suggests maybe… just maybe… we should follow Buffett’s advice and be greedy now when others are fearful.

The S&P 500 is currently languishing right around its ‘ultimate’ support level: the 200-day moving average. If the market bounces here, we think that would be a strong buy signal. 

As for which stocks to buy on the rebound, we like AI stocks a lot. Those assets have enjoyed quite strong and steady growth for the past two years. 

The Global X Artificial Intelligence and Technology ETF (AIQ) is a good proxy for the industry at large. And from March 2023 to today, it has risen more than 40%.

We think there will continue to be strong growth in that sector moving forward. 

But we like a specific subset of stocks even more. 

Learn more about those breakout stocks before they roar higher.

Regards,

Luke Lango

Editor, Hypergrowth Investing

Editor’s note: “2025: The Defining Year for Autonomous Vehicle Adoption” was previously published in February 2025 with the title, “Autonomous Vehicles: Why 2025 Will Usher in the Self-Driving Car.” It has since been updated to include the most relevant information available.

The future isn’t coming—it’s already here. 

Big Tech firms, for example, are spending billions of dollars to develop new AI applications. But thus far, many of those projects are still in development. Therefore, outside of bots like ChatGPT, folks like you and me have largely yet to witness the change that is AI. 

But one technological transformation happening right now is already quite tangible: autonomous vehicles (AVs), or self-driving cars.

Now, I know many folks might be skeptical of 2025 truly being the year this ground-breaking technology finally goes mainstream. After all, self-driving cars have spent years stuck in a cycle of hype, delays, and skepticism. Many believed they were always “five years away” from reality. But in 2025, that changes.

Over the past year, companies at the heart of this industry have made consistent and stunning progress. And now that Donald Trump is back in the White House for a second term, the regulatory landscape is beginning to shift in a highly favorable direction.

That disruption isn’t a distant dream. It’s happening now.

Autonomous vehicles are on track to turn the global transportation services market – estimated to be worth more than $7 trillion – on its head; and the profit potential in this space is absolutely massive.

The companies leading this revolution are making history, and investors who position themselves early stand to reap massive rewards.

That’s why I just put together a brand-new, research-driven presentation breaking down the biggest opportunities in the self-driving car space—and how you can profit. (Click here to check out that video.)

The AV Experience

Let me share a personal experience that illustrates why I’m so confident about the AV Revolution unfolding right now. Rather than making predictions, I’ll show you exactly what these vehicles can already do.

Recently, I was flying back from a work trip into Phoenix Sky Harbor International Airport. It was late. My wife and kids were asleep. So, I fetched a ride from a ride-hailing app. The car arrived. It took me to my home in the suburbs. Dropped me off. 

It was a typical ride-hailing experience. 

Except for one critical detail… 

There was no driver. 

The car that picked me up from the airport, drove me through Phoenix, and dropped me off at my house had no driver. 

It was a fully autonomous vehicle operated by Waymo, the self-driving unit at Alphabet Inc. (GOOG).

It’s been working on developing autonomous vehicle technology for over a decade now. For the past few years, it’s been quietly testing its technology through autonomous ride-hailing in Phoenix and a few other American cities. Folks in those areas can hail an autonomous Waymo and have it drive them from place to place. I bet many of you live nearby one of them and can try this yourself. 

That’s what I did for my trip from Phoenix Sky Harbor International to my house. (And in fact, I filmed that very ride so you can check out the experience for yourself.)

Waymo: Steering Us Into a Driverless Future

Waymo is currently delivering more than 150,000 autonomous rides per week in Phoenix, San Francisco, and Los Angeles. 

That’s a lot of rides! 

And they’re growing quickly. Just a few months ago, Waymo was only completing about 50,000 rides per week – meaning it tripled its ride volume in just a few months. 

We think that number will triple in the next few months, too. 

But we don’t find this technology so compelling based on popularity alone.

Did you know that Waymo’s self-driving cars are also proving far safer than their human-driven counterparts? The company’s autonomous vehicles have driven over 22 million miles. And in those 22 million miles, they have been involved in 84% fewer crashes with an airbag deployment, 73% fewer injury-causing crashes, and 48% fewer police-reported crashes compared to human drivers.

The Waymos have arrived, and they’re exceptionally safe.

Of course, the skeptics in the room may be saying that the firm is only operational in three cities. That’s far from being a “national” service.

But Waymo has plans to expand to 10 new metros in 2025, including Las Vegas, San Diego, Atlanta, Austin, and Miami. That means that by the end of the year, the company will be operational in 13 cities. 

There are only 17 cities in the U.S. with 750,000-plus people. And by the time 2026 comes around, Waymo will be delivering rides in 75% of them. 

It seems this is the year that Waymo goes national.

The stock market is in disarray right now, to put it mildly.

This week, the S&P 500 and Nasdaq both temporarily lost their 200-day moving averages – a potential signal of a major market trend reversal. 

Driving this negative price action are fears that the current administration’s policy changes – including federal spending cuts, tariffs, deportations, and more – could plunge the U.S. economy into a recession. 

We understand and share those concerns. The odds of a recession and bear market are rising rapidly. Caution is warranted given these risks. 

But at the same time, we think the odds of an economic recovery and stock market rebound are far higher. And stocks could be preparing to bounce right now.  

These Stock Market Wounds Are Self-Inflicted

Just a few months ago, the economy was in great shape. 

Unemployment was low. Job growth was high. Consumer spending was resilient. Real wage growth was positive and strong. Inflation was turning lower. Interest rates were dropping. Consumer and business sentiment were improving, and corporate earnings were running higher. 

While most of those things remain true today, investors fear that President Trump’s policy changes will reverse a lot of those positive economic trends. 

But such reversals would be the result of self-inflicted wounds. And the thing about self-inflicted wounds is that usually, you can stop imposing them at any point. 

We can stop issuing tariffs and widespread federal spending cuts at any point. And it seems like the current administration is moving to gradually stop – or at least stall – some of these things. 

Trump has now twice delayed some tariffs on Mexico and Canada and granted exemptions to a variety of sectors, like the auto industry. He also said that future job cuts in the government will be done with a “scalpel” and not a “hatchet,” implying more strategic, smaller cuts. 

It seems the tide is turning at the White House. Radical change will become less radical. If that continues, it should ease Wall Street fears about a potential recession in the coming months. 

That’s why we believe the odds of an economic recovery here are far greater than the odds of a meltdown. 

But we also aren’t smarter than the market… so we will listen to its cues about where the economy and stocks could go. And based on our technical analysis, the market will offer a lot of information over the next two weeks… 

What to Watch: the Nasdaq 100

The bellwether index we’re watching closely right now is the Nasdaq 100. 

We view it as even more important than the S&P 500. That’s because it includes the world’s largest 100 tech companies. And since we live in a tech economy, those are the most important, most powerful companies in the world. 

This week, as we mentioned, the Nasdaq 100 closed below its 200-day moving average – for the first time in over a year, signaling a potential major market trend reversal. 

It has done the exact same thing precisely 11 times before since 1990. 

All 11 times, the stock market was either on the cusp of a big rebound or a big breakdown – and which way it went depended on how stocks acted in the subsequent two weeks. 

If the Nasdaq 100 played strong defense and stayed within 4% of its 200-day moving average over the subsequent two weeks, stocks always rebounded over the next 12 months, with average gains of over 25%. 

This happened in early 1992, early ‘96, late ‘97, early 2004, mid-2010, late 2014, and late 2018.

But the outcome isn’t always so bullish…

Editor’s Note: The market may be turbulent, but innovation never stops — and that’s exactly why InvestorPlace Senior Analyst Louis Navellier remains confident. Amazon recently unveiled Ocelot, its first quantum computing chip, joining Microsoft and Google in a race to dominate this emerging tech frontier… and the next big investing opportunity. 

But let’s be honest — quantum computing is complex, and understanding its real impact on the market can be challenging. That’s why Louis is holding an urgent briefing on Thursday, March 13, at 1 p.m. ET… just one week before Nvidia’s big “Q Day” announcements. Click here now to register your spot for this free event.

Further, Louis and his team have put together a special series on quantum investing for his own e-letter… and he’s agreed to let us run one of those pieces here today.

“Generals always prepare to fight the last war, especially if they won it.”

French Prime Minister Georges Clemenceau supposedly said that during World War I.

The same applies to investing. Investors will often look at what worked before and assume it’ll keep working.

We’ve seen this happen with the dot-com bubble in the late 1990s. Investors threw money at any company with “.com” in its name, only for many of them to crash and burn. Then, in the 2000s, investors bet big on brick-and-mortar retail giants like Sears and JCPenney, missing the rise of e-commerce and Amazon.com Inc. (AMZN).

During the beginning of the AI Revolution, arguably the biggest technological shift of our time, some investors stuck with legacy tech stocks like Intel Corp. (INTC).

This was once an iconic American company. But take one look at Intel’s chart below. The chipmaker’s stock is down about 63% over the past five years.

What makes this drop even more shocking is the fact that all of Intel’s missteps happened as the AI Revolution picked up steam.

So, competitors like NVIDIA Corp. (NVDA) came along and revolutionized the semiconductor industry and become the clear-cut leader of the AI race.

Intel was fighting the last war.

Meanwhile NVIDIA surged ahead, dominating the AI Revolution, thanks to its graphic processing units (GPUs), which proved to be far superior to CPUs (central processing units) for AI work. That’s when everything changed. All of a sudden, everyone doing AI was clamoring for NVIDIA’s chips, and the AI arms race was on.

As a result, few companies have profited from this profound shift more than NVIDIA. In my 40-plus years in this business, I’ve never seen a company as monopolistic as NVIDIA.

It’s why I went on record saying that NVIDIA is the “Stock of the Decade.” Its pace of innovation is unmatched.

But you have to wonder: How much longer can NVIDIA keep this up?

By the end of this decade, I predict the transistors in each of NVIDIA’s chips will be approaching the “atomic” level. That’s when the laws of physics will get in the way of making its chips any faster.

So, is NVIDIA fighting the “last war”?

I don’t think so.

I think NVIDIA plans to utilize quantum computing to dominate the next phase of the AI Revolution.

Now, you are going to start hearing more about quantum computing very soon. And that’s because, on March 20, NVIDIA will hold the first ever “Quantum Day” at their annual AI conference…

Or what I’m calling “Q Day.”

According to the company, it will bring together experts to consider what we should expect from quantum computing in the coming decades.

I believe this will be when NVIDIA makes its biggest announcement of the year…

And that announcement won’t just be great for NVIDIA. It’ll also be great for select “pure play” quantum computing companies that are partnering with NVIDIA.

Remember: The biggest gains will likely come from smaller “pure play” quantum computing companies.

These are the ones that could become the next NVIDIA.

So, make sure you block off your calendar for Thursday, March 13, at 1 p.m. Eastern. That’s when I’ll share all the detailsyou need to know about Q Day in a special summit – including my top pick, a small-cap stock protected by 102 patents with close ties to NVIDIA.

You can reserve your spot by clicking here.

In the meantime, to understand what’s coming, I’ll explain the ins and outs of quantum computing, including how NVIDIA is getting in on the action. It’s important to understand what quantum computing is and how it works.

Plus, I’ll share two ideas for how you can profit.

Let’s dive in…

What Is Quantum Computing?

I want you to think about a maze for a moment.

A classic computer will run a simulation by choosing a path. It will start all over again when it hits a dead end in the maze. It will repeat this process again and again until it finds the solution.

But if you can teach the computer how to reason like a person, then it could take a more efficient approach. Theoretically, it could automatically weed out the obvious dead ends, for example, and optimize the simulations even further.

That’s what British mathematician Alan Turing had in mind when he laid the foundation for artificial intelligence by suggesting building a program to simulate a child’s mind. In other words, teaching it to “think.”

This level of reasoning is basically what we refer to when we’re talking about artificial intelligence.

But here’s where things get interesting, so stick with me.

What if you could test ALL paths of the maze simultaneously, giving you the correct answer in just a fraction of the time?

Then you’d really have something on your hands, right? That’s quantum computing.

The idea is simple: Solve hard problems much faster than regular computers.

This ability to exist in multiple states at once is the key. It allows quantum computers to generate many solutions at the same time. And instead of traditional bits, which are either 1 or 0, quantum computers use something called qubits, which can be 1 and 0 simultaneously – a property called superposition.

Now, I want to be clear that many of today’s technologies already use quantum mechanics. Atomic clocks… MRI machines… lasers… even the humble LED lightbulb rely on quantum mechanics to work. We’re not talking about some theoretical power or outright sorcery.

But what’s different today is that we’re finally reaching a stage where quantum states can be harnessed to perform computing tasks. Electricity went through its own “transistor moment” in the 1950s – leaping from the blunt task of driving bulky electric motors to the ultra-fine role of powering the advanced semiconductors that run in every modern computer.

Quantum computing is now ready to make that same jump.

In fact, we’re already seeing real-world breakthroughs…

Quantum’s Move to the Mainstream

For years, quantum computing was limited to government agencies and university research labs because the hardware was too big, too expensive, and too unstable for real-world applications.

But thanks to some key advances, that’s changing.

Big Tech companies like Alphabet Inc. (GOOG), Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN) are developing custom quantum chips that can perform computations in seconds that would take classic supercomputers thousands of years to finish.

There have been other advances in quantum computing, too. Ones that have the potential to bring this to market at a mass scale that researchers only once dreamed about…

Now, I promise I won’t bore you with any more physics or technical lingo. The critical thing to know is that recent breakthroughs are putting us closer than ever to bringing quantum computing out of the lab and into profit-making Corporate America.

Major governments, tech firms and institutional investors are betting big on quantum computing.

That’s because the implications are staggering:

• Biopharma companies could discover breakthrough drugs faster than ever before.
• Automakers could develop driverless car systems that really work.
• Chemical companies will develop materials we can’t even imagine.

And that’s just the tip of the iceberg, folks. With quantum computing, we’re going to start solving problems we don’t even know we have.

And that brings us to the investment opportunity.

I’m Looking for the Next NVIDIA…

Now, as I mentioned earlier, I expect NVIDIA to begin the shift to quantum computing soon.

In fact, I predict a major turning point will take place on Thursday, March 20.

That’s when NVIDIA hosts its first-ever Quantum Day.

This is a big deal, folks.

My prediction is that NVIDIA will figure out a way to marry AI with quantum computing in a way no one has ever done before. We’re talking about the possibility of a new technological breakthrough that could affect industries worth a combined $46 trillion.

That means NVIDIA is still a solid “Buy” for long-term investors. That’s my Profit Idea No. 1.

But if you really want to make big gains, you have to start looking at the “pure play” quantum companies that NVIDIA and other Big Tech companies are partnering with. That’s my Profit Idea No. 2.

To learn more about that strategy, join me at my special Next 50X NVIDIA Call. Again, it’s on Thursday, March 13, at 1 p.m. Eastern. (You can click here to reserve your spot now.)

My goal for this briefing is to get you ahead of the crowd… ahead of the news outlets…

Because by the time the crowd has heard about this, it will already be too late.

Go here to reserve your spot NOW.

Sincerely,

Louis Navellier

Senior Analyst, InvestorPlace

Louis 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)

The Next Market Move that Could be Bigger Than AI

I’m old enough to remember 1992, and maybe you are too. If not, imagine…

There is no Google, no Amazon and certainly no smartphones.

Maybe you watched Seinfeld on TV, and went to see Batman Returns at the movies.

I was listening to Nirvana’s Nevermind album on CD.

Although it existed, most people had not even heard of the Internet.

In those days if you wanted to send a message, you didn’t sent email – you picked up the phone or sent a fax. Email was used mostly inside businesses. AOL started to offer email access in the mid-‘90s.

Services we take for granted now either didn’t exist or were in their infancy.

Imagine if you could have seen what was coming. Imagine if you could have foreseen all the online services we take for granted today.

And what if you had invested in them?

If you had foresight, you might have bought Cisco Systems (CSCO), the company that built a lot of the infrastructure the Internet needed. Cisco went public in 1990 at a split-adjusted price of 6 cents. In 1992, CSCO was selling for around 31 cents.

By the start of 1997, the stock had gained more than 10X. By 2000, it had soared 100x.

Right now, we’re experiencing another revolution – this time in artificial intelligence (AI).

And the next step in the revolution is just now emerging on the horizon.

Just like Cisco built the plumbing for the Internet, a new pioneer is laying the groundwork for technology that will impact trillions of dollars in the global economy.

The “Magnificent 7” stocks are making big bets on this tech, and Louis Navellier is pointing toward this opportunity now.

Nvidia’s Next Big Move Could be Bigger

If you’re new to the Digest, Louis Navellier is a growth investing legend. MarketWatch hailed him as “The Adviser Who Recommended Google Before Anyone Else.”

And we’ve often highlighted his 2016 recommendation for his subscribers to buy Nvidia (NVDA).

Since that call, NVDA has become one of the biggest companies in the works, surpassing a $3 trillion market cap.

If you’ve held on since 2016…NVDA has soared as high as 7,000%.

Now, Louis is focused on the next phase of this technological breakthrough, and it’s adjacent to the trend that made NVDA a market leader.

It’s all about quantum computing.

Here is Louis’ explanation of Nvidia’s next move and the opportunity ahead.

Through the end of this decade, I predict the transistors in each of NVIDIA’s chips will be approaching the “atomic” level. So, sheer physics may prohibit it from making its chips any faster.

That’s a way off. But looking beyond this decade, NVIDIA plans to utilize quantum computing – a form of computing that essentially utilizes ones AND zeroes to perform calculations instead of either a 1 or 0, like traditional computing.

Why is that important?

Quantum computing has the potential to solve complex problems exponentially faster than traditional computers.

Not just a little faster… quantum computers can solve problems in minutes that would take classical computer years, or even centuries!

That means new possibilities in:

• scientific discoveries in the material behavior
• faster drug development
• revolutionary advances in materials science, and
• enhanced fraud detection and risk analysis in financial transactions.

Here is more from Louis:

I predict NVIDIA will help lead the charge to a breakthrough in this field to help speed up generative AI after its GPUs hit their physical limits. In fact, NVIDIA has a quantum cloud simulator up and running right now.

The point is that you are going to start hearing more about quantum computing in the years to come. And while NVIDIA is a remarkable company, and I anticipate holding this stock through the end of the decade, the biggest gains will likely come from smaller, dedicated quantum computing companies.

How Early Investors in Booms Get Rich

Louis has a long track record of finding just those kinds of “smaller, dedicated” companies in his Breakthrough Stocks service.

Louis launched Breakthrough Stocks in 1980. It’s the service that put his quantitative investing strategy on the map! Since then, it has evolved into Louis’ premium service dedicated to finding small-cap, early-stage companies that are setting up to be the market leaders of the future.

As always, the essence of Louis’ strategy is the same – invest only in companies with stellar fundamentals.

But with small-cap stocks, not every variable is equally weighted.

Small-cap stocks with strong sales and earnings growth routinely outperform the market.

When you combine fundamental strength factors with an emerging technology, the impact on a stock’s price can be explosive.

Below are some of the winners from Louis’ recent closed trades:

• Rambus Inc (RMBS), 1/3 position closed for a 159% gain in 16 months.
• CECO Environmental Corp (CECO), closed for a 152% gain in 25 months.
• e.l.f. Beauty, Inc. (ELF), closed for a 69% gain in 16 months.

Here is how Louis describes his next big opportunity:

If you really want to make big gains, you have to start looking at the “pure play” quantum companies that NVIDIA and other Big Tech companies are partnering with.

To learn more about that strategy, you need to be prepared. So, that’s why I want to join me on Thursday, March 13, at 1 p.m. Eastern.

That’s when I’m hosting my exclusive briefing: The Next 50X NVIDIA Call.

My goal for this briefing is to get you AHEAD of the crowd… AHEAD of the news outlets…

Unlike the early internet days, where only a few visionaries saw what was coming, this time you have a chance to invest early.

Reserve your seat now for Louis exclusive briefing The Next 50X NVIDIA Call!

Enjoy your weekend,

Luis Hernandez

Editor in Chief, InvestorPlace

Editor’s Note: Everyone dreams of finding that 10X winner.

The reality? Many investors have owned a stock that would go on to be a 10X winner, but they sold it somewhere along the way due to fear.

Today, my colleague Louis Navellier will provide a great illustration: Nvidia Corp. (NVDA). Since Louis recommended it in May 2019, the stock has surged over 3,000% – but not without massive volatility (the latest example is the 20% pullback in recent weeks after the arrival of Chinese AI firm DeepSeek).

As Louis details, market narratives shift, but fundamentally strong stocks recover, which Nvidia has done. The chip giant remains a powerhouse, leading the AI revolution. And though Louis believes it still has room to run, it won’t be the only next big AI winner.

Louis has identified seven under-the-radar companies primed for massive gains as AI has its Crossover Moment – expanding beyond digital applications into real-world automation, infrastructure, and industry.

The biggest profits will go to those who see what’s coming next. Take it away, Louis…

If you could make a better than 1,000% gain in a stock, would you invest in it?

Virtually every investor would answer that question with a resounding “Yes!”

But holding a stock long enough to get that big of a return is much easier said than done. The reality is that a stock never moves straight up. To walk away with a 1,000%-plus profit, you have to endure swings in stock prices, sometimes so severe that they’ll have you reaching for your antacids.

Case in point: Nvidia Corporation (NVDA).

In my 47 years on Wall Street, Nvidia is my biggest winner – up more than 3,000% since I recommended it back in May 2019.

In today’s note, I want to remind you of NVIDIA’s somewhat obscure origins (unless you’re a gamer)… and how a surprising twist in how its technology worked brought it to my attention.

That’s an interesting story.

A more crucial story is what exactly hit NVIDIA’s share price earlier this year… and where its next leg up will come from. So, we’ll take a look at that, too.

That said, while I still think it has plenty of room to run, the next chapter of the AI story won’t be written by NVIDIA.

So, I’ll also start digging into where the next wave of AI profits is coming from. NVIDIA’s CEO says it’s a $100 trillion opportunity.

And I’ve identified seven fast-rising ways to play it already.

Take a look…

Why I Recommended Nvidia

Nvidia is a leading computer graphics company that makes graphics processing units (GPUs).

Originally, graphics were only prized by video game enthusiasts. But it turns out that GPUs have a wide range of powerful applications. They can be used to aid computers in applications like financial modeling, oil and gas exploration, virtual reality and even self-driving cars.

So, in the late 2010s, Nvidia began receiving some unusual orders. Not only were crypto enthusiasts buying up high-end GPUs to mine bitcoin… but machine-learning researchers were also using the cards to train their models.

It turns out that GPUs are really good for something called “parallelization.” This is where you break down a large computational task into smaller ones that can be calculated independently and simultaneously. That makes GPUs extremely powerful – far more than even the best central processing units (CPUs) in these types of computations.

Data storage provider Pure Storage estimates that GPUs are roughly three times faster than an equivalent CPU for machine-learning algorithms. That is an enormous advantage in a world where large models can require months to train and cost millions of dollars.

That put Nvidia on the fast track to success. Thanks to its portfolio of valuable patents and internal research, Nvidia got an enormous head start on the AI Boom. No company came close.

What originally got me excited about Nvidia was what it was doing with the development of autonomous vehicles. My son was an engineering student at Stanford when that university debuted an autonomous race car named “Shelley” that used Nvidia chips.

Back in 2019, when I learned what Nvidia was planning to do with AI, I pulled the trigger and added it to the Buy List at my large-cap newsletter, Growth Investor.

Now, as I mentioned, it’s now up more than 3,000% since my recommendation, but those gains didn’t come easily. As you can see in the chart below, NVDA has experienced some wild swings…

One of those swings came just a couple of weeks ago, on January 27, when shares of Nvidia lost 17%. That’s a staggering $589 billion loss in market cap – the largest one-day value destruction for a single stock in market history.

The reason? A Chinese AI company called DeepSeek.

Here’s the story…

How to Survive a Painful Drawdown

On January 20, a Chinese AI company, DeepSeek, released a new AI model called R1 that it claims is nearly on par with American AI models. In fact, DeepSeek claims the R1 model has a comparable performance to OpenAI’s o1-mini model for ChatGPT.

What’s more, it utilizes inferior Nvidia chips, called H800s, that are compliant with the export bans that were put in place by the Biden administration.

Oh, and the company claims it was built in about two months and cost just $5.6 million to train.

As a result, DeepSeek became the No. 1 app downloaded from the Apple Inc. (AAPL) App Store.

Wall Street and the tech world began to put all of this together at the end of January. And it hammered AI stocks… and the market as a whole. The fact is that DeepSeek caused everyone to start questioning the entire roadmap of how AI is supposed to evolve.

Some investors began wondering whether the U.S. tech sector will win the AI race – for two big reasons…

1. Cost Efficiency: If DeepSeek’s AI models perform similarly to American AI models at a fraction of the cost, then it means American programmers and engineers missed something. And it throws into question the U.S. lead on AI development.
2. Reduced Hardware Usage: DeepSeek has stated that it uses far fewer chips for AI training. A report released in December showed it only used a cluster of more than 2,000 Nvidia chips to train its V3 model, while five times that number is typically used for similar AI training models.

Both raised concerns that Nvidia was overvalued… and triggered questions about the necessity for more data centers and an electricity grid buildout.

However, we have since learned that DeepSeek isn’t as great as it was made out to be. For one, the app crashes about 99% of the time. Apparently, DeepSeek doesn’t have the cloud computing capacity needed to run it. It’s also been the victim of a cyberattack.

Most importantly, the narratives that DeepSeek could use the old Nvidia chips and that Nvidia’s new ones weren’t necessary were completely false.

Once this was revealed, AI stocks came roaring back. NVDA has gained 11% in less than three weeks – which is impressive for such a large company.

The point is, if you want to bag a 1,000% gain, there are going to be bumps along the way.

There will be headlines, setbacks, naysayers, you name it… Any one of these could derail a stock.

But the fundamentally superior stocks – like Nvidia – always bounce back.

The Next Leg Higher – and a $100 Trillion Opportunity

Now, I have gone on record saying that there will be more gains ahead for NVIDIA. In fact, I have even called it the Stock of the Decade.

In other words, this stock will change your life.

The fact is that NVIDIA’s pace of innovation isn’t slowing down, folks. It’s accelerating.

Eventually, the transistors in each of Nvidia’s chips will approach the “atomic” level. Then, the laws of physics will come into play. But that’s OK, because then Nvidia will move on to quantum computing.

We’re still a ways off from that. But the good news is that there is another major catalyst that should not only help NVDA recoup its DeepSeek losses, but also get back to new highs.

I’m talking about its fourth-quarter earnings report on Wednesday, February 26.

Analysts are calling for earnings of $0.85 per share on revenue of $38.13 billion, up from earnings of $0.52 per share and revenue of $22.1 billion a year ago. That translates to 63.5% year-over-year earnings growth and 72.5% year-over-year revenue growth. Analysts have upped earnings estimates over the past three months, so a fifth-straight earnings surprise is likely.

Now, Nvidia has a history of posting positive earnings surprises. So, I’m expecting big things from the stock as we approach its earnings announcement.

I will also be particularly interested to hear from its superstar CEO, Jensen Huang, and his thoughts on what he has previously referred to as a $100 trillion opportunity…

Specifically, Huang was referring to a critical turning point for artificial intelligence – one where AI breaks out of the digital world and steps into the real one – running self-driving cars and equipment, automating factories, training robotic workers… even building “digital twins” of entire cities.

This shift is massive. And investors who see where it’s headed right now stand to benefit the most.

I call this AI’s Crossover Moment – and it could create more wealth than any other tech boom in history.

This is where AI stops being a “cool tool” and starts actively transforming industries, infrastructure and daily life.

That means the biggest profits won’t be in just NVIDIA’s chips…

They won’t necessarily be in Big Tech at all.

But my proven system has generated Buy-grades on seven under-the-radar companies that I believe are ready to surge as this $100 Trillion AI Crossover moment unfolds.

Go here for details NOW.

Sincerely,

Louis Navellier

Senior Investment Analyst, InvestorPlace

A small group of people in a quiet New Hampshire office spends their days making deals that have ripple effects across the country.

The work they do influences what you pay at the grocery store, in restaurants and at diners.

Day after day, they connect buyers and sellers in one of the most important markets in the country.

This market isn’t stocks or real estate. It’s not oil or gold, either.

But when it goes haywire, everyone feels it.

And it all happens out of a tiny, nondescript office building.

Here’s what it looks like in the Street View on Google Maps.

This is a picture of the Egg Clearinghouse, or ECI. It operates as a “middleman,” connecting egg buyers and sellers in an online marketplace.

But this isn’t some boiler-room operation for Wall Street operators. Only farmers and egg buyers are allowed to trade.

And as The Wall Street Journal recently reported, last year it processed trading orders on 2.6 billion shell eggs and 39 million pounds of egg products. That’s roughly $600 million in transactions.

That may sound like a lot, but it actually only represents about 5% of the egg market.

However, given that America is facing a historic egg shortage, the work the folks at the ECI do is becoming increasingly important because bulk buyers for restaurants and supermarkets are having trouble acquiring the eggs they need.

I’m sure you can sympathize.

Maybe you’ve taken a trip to the grocery store recently and experienced sticker shock as you paid $7 for a dozen eggs. Or, as you strolled down the aisle, maybe you saw a sign that read something like this:

Or perhaps you’ve been to a restaurant recently and noticed they raised prices or scrapped menu items with eggs altogether. Even Waffle House – famous for its resilience during hurricanes and disasters – has been forced to pass rising costs onto customers, recently adding a $0.50 surcharge to dishes with eggs.

So, in today’s Market 360, I’m going to discuss what’s behind the egg shortage and the shocking jump in egg prices. (Hint: It’s the age-old story of supply and demand.) I’ll also share how one of my top picks in my Breakthrough Stocks service is profiting from this historic shortage. Plus, I’ll explain how it’s leveraging a monumental event I’ve been calling the AI Crossover to not only survive the shortages – but to dominate the market.

HOW Much for Eggs?!?

Let’s start with what’s been happening with egg prices lately…

Most folks have probably noticed that they’ve been particularly volatile over the past couple of years. But recently, the price of eggs hit a 45-year high.

According to the U.S. Bureau of Labor Statistics, a dozen eggs cost $3.65 in November and $4.15 in December. By January 2025, the price of a dozen eggs reached a whopping $7.09 – up 22% since the start of the year, an increase of $1.28 per dozen in just a few weeks.

The reason for the price surges is pretty simple.

Over the past three years, a terrible avian influenza epidemic has been tearing through farms across the country.

Avian Influenza, or the “bird flu,” in chicken flocks typically occurs when migratory waterfowl pass over farms. The bird flu usually spikes in the spring and fall. And while it doesn’t typically infect humans, it’s a serious health risk for chickens.  

The CDC reports that about 147 million birds in the U.S. have been affected by the disease since January 2022. Specifically, about 108 million egg-laying hens have been lost.

To put this into perspective, there are about 303.4 million egg-laying hens in the U.S. right now. So, this is a staggering number, folks.

In the fourth quarter of 2024 alone, outbreaks spread throughout 10 states, affecting more than 36 million egg-laying hens. So, over the past four months, nearly 12% of the U.S.’s egg-laying hens have been culled.

Now, with smaller egg-laying flocks of chickens, there are fewer eggs to keep up with Americans’ seemingly insatiable appetite. According to Statista, the average American ate 281.3 eggs in 2023, which was expected to rise to 284.4 in 2024.

The result has been the worst crisis in decades for the poultry industry.

Consumers are scrambling to find alternatives. Some are even going as far as buying chickens and raising them on their own in their backyard.

But for producers, rebuilding supply isn’t as simple as flipping a switch. There’s no quick fix.

That’s where one of my top picks in Breakthrough Stocks comes in.

How We’re Profiting From the Egg Shortage

Now, this company partners with family farms to produce a variety of ethically-produced foods, with a specific focus on pasture-raised eggs. 

What’s more, it has largely been insulated from the avian flu outbreak. According to the CEO, only one of its farms had reported cases within the last 12 months, and those flocks were culled in accordance with government regulations.

Less than 0.3% of this company’s egg-laying chickens have been affected by the avian flu.

In fact, as of right now, there have been no reported cases of avian flu on any of its properties.

That might have something to do with the fact that it uses a decentralized network of more than 425 family farms throughout the U.S. So, if an outbreak happens, it doesn’t ravage the overall supply.

So unlike competitors who have had to destroy entire flocks, this company remains well-positioned to benefit from increased egg prices.

Even better – it’s using cutting-edge technology to scale production faster than ever before. And believe it or not, it’s actually using artificial intelligence to help…

The AI Crossover Angle

As egg producers work to restore supply and meet rising demand, this company is taking a technology-first approach, using AI and automation to scale more efficiently than ever before. 

For example, itprocesses 6 million eggs daily with robotic automation and AI-driven quality control at one facility. 

It also has an AI egg grading system (no, you’re not misreading that). We’re talking about automation technology used in washing, sorting and packing shell eggs that is set to boost production by 30% in 2025.

This will give the company a massive competitive edge as egg demand continues skyrocketing. 

For an industry that desperately needs a solution, this company is ahead of the curve. And AI is helping them along the way.

Now, I realize that using AI to help with eggs may seem like a bizarre example. But the reality is AI is launching into a whole new realm and will touch our everyday lives in ways we haven’t even though of yet – like eggs.

That’s going to create a gargantuan opportunity for investors. In fact, NVIDIA Corporation (NVDA) CEO Jensen Huang said it could amount to a $100 trillion market.

That’s why I included it as one of the picks in my exclusive report about the AI Crossover Moment: The 7 Must-Own Stocks for AI’s $100 Trillion Proliferation.

Now, I share more details on what you need to do to prepare in my special presentation. But you’ll need to act fast, because my publisher is taking this briefing down tonight.

Go here to get all the details now.

Sincerely,

Louis Navellier

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)

Earnings drive stock performance … Luke Lango is bullish on earnings … but what about Walmart? … Louis Navellier sells an AI energy play … Grok-3 for the win

We can speculate about Trump tariffs… inflation… interest rates… geopolitical risk… or any other market influence on your mind…

But at the end of the day, whether your stocks go up or down depends on one thing:

Earnings.

In the long run, the strength (or weakness) of earnings drives stock performance.

To illustrate this, below is a chart spanning from 1945 to Q3 of last year. It compares the S&P’s price to its trailing 12-month operating earnings.

Notice two things…

First, over the long-term, these two lines have an amazingly strong correlation. This underscores our point: In the long-run, earnings drive stock prices.

Second, notice how the S&P’s earnings line (in blue) is smoother than the S&P’s price line (in green). And though price bounces around, it always eventually returns to its earnings line, a bit like a magnet.

Price can deviate from earnings for stretches due to investor euphoria or despondency, but it always reverts to earnings…eventually

This is what’s behind much of Luke Lango’s current bullishness.

For newer Digest readers, Luke is our technology/hypergrowth expert, and the analyst behind Innovation Investor.

From Luke:

Over the past few weeks, companies across America have been reporting fourth-quarter earnings results. So far, those numbers have been very strong. 

About 80% of companies in the S&P 500 have reported earnings so far this season. More than 75% have beaten Wall Street’s profit estimates, meaning they made more money last quarter than analysts expected. 

Meanwhile, the blended earnings growth rate is nearly 17%, which marks the index’s highest profit growth rate since 2021.

More importantly, trends are expected to stay strong for the foreseeable future. 

That is, next quarter, earnings are projected to rise about 8%, then another 9% in Q2. They are expected to rise almost 15% in the third quarter and about 13% in the fourth.

Bearish pushback

A bear’s first rebuttal might be, “Well, what about Walmart this morning?”

If you missed it, shares of the retail giant sunk after the company’s forward guidance disappointed Wall Street. As I write, the stock is on pace for its worst day in nearly three years.

(Full disclosure: I own Walmart.)

Let’s be clear about what happened…

Walmart’s numbers were strong. The company beat on both profits and revenues and hiked its dividend by 13%. So, earnings are, in fact, healthy…which is partially why Walmart set an all-time high earlier this month.

The possibility of reduced earnings/revenues in the future is what sunk the stock this morning. But the reduced guidance feels more like “lowering the bar given economic uncertainty” rather than “waving a red flag.”

From CNBC:

Chief Financial Officer John David Rainey described consumer spending patterns as “steady” and said, “there’s not any sharp changes that we’ve seen.”

Yet he acknowledged “there’s far from certainty in the geopolitical landscape.”

Plus, we should remember that one company’s forward guidance doesn’t represent the entire earnings landscape. Even if Walmart’s earnings slow, that doesn’t mean that another company won’t see explosive earnings growth.

Now, a second rebuttal could be, “But the earnings growth Luke references merely ‘catches earnings up’ to elevated prices that had already surged way ahead, stretching valuations.”

Even if we accept that as true, a closing of the gap between earnings and price takes pressure off those stretched valuations. And that gives stock prices room to push even higher, returning to yesterday’s stretched valuation before today’s earnings growth.

Either way, robust earnings are supportive of conditions that push stock prices higher.

This broad snapshot of earnings growth is bullish, but the earnings for each of your stocks is more important

And this is where legendary investor Louis Navellier just showed us why professional investors tend to outperform average investors.

On Tuesday, Louis recommended his Growth Investor subscribers sell Eaton Corporation plc (ETN) for a loss.

It wasn’t a big loss – only about 2% after you include dividends. But Louis was willing to take the loss because ETN no longer met his strict criteria for a strong stock.

For newer Digest readers, Louis is one of the early pioneers of using quantitative algorithms to scour the markets for strong stocks. Forbes even named him the “King of Quants.”

As a quantitative investor, Louis’ market approach is rooted in cold, impartial numbers. When his algorithms identify an attractive opportunity, he dives in, deciding whether it’s attractive enough to recommend.

Similarly, when his systems warn him of flagging fundamental weakness, he analyzes whether it’s time to get out to sidestep a potential pullback.

“Get out” was the takeaway for ETN.

From Louis’ Sell Alert:

Earlier this month, Eaton Corporation plc (ETN) slipped to a D-rating in Stock Grader despite reporting record results for its fourth quarter in fiscal year 2024…

ETN shares pulled back in the wake of the quarterly and yearly results since the company missed analysts’ sales estimates…

Add in the fact that analysts have lowered earnings estimates for the first quarter in the past month and buying pressure remains minimal (as evidenced by its D Quantitative grade), and I recommend that we go ahead and sell our position into today’s strength.

Why many investors would have a hard time making the same choice

Eaton is a great company that’s well-positioned to ride the AI-related data center boom. It provides power distribution and backup solutions, ensuring reliable energy flow to AI-driven data centers. But it’s also a player in energy transition, making it a strong long-term leader in power management.

Many investors would make this their single focus. Instead, Louis follows his system and the numbers, prioritizing “proven strength now” over “potential strength later.”

His “sell” decision represents a market approach that many of the most successful traders follow: Trade the market that’s in front of you, not the market that you hope will be in front of you.

I will note that Louis is still focusing on AI’s power needs and the resulting investment opportunities…

The next wave of AI will require unprecedented computing power. And there’s one company in Louis’ crosshairs that’s developing the crucial hardware that could power these advances. Its solutions could dramatically reduce power consumption while increasing processing power. Louis will give you more details on it right here.

Finally, the latest AI bots are arriving, and their capabilities point toward a continuation of today’s AI bull

Earlier this week, Elon Musk’s xAI released its updated Grok-3 chatbot.

Here’s Bloomberg with how advanced it is:

Across math, science and coding benchmarks, Grok-3 beats OpenAI’s GPT-4o, Alphabet Inc.’s Google Gemini, DeepSeek’s V3 model and Anthropic’s Claude, xAI said via a live stream on Monday.

Grok-3 has “more than 10 times” the compute power of its predecessor and completed pre-training in early January, Musk said in a presentation alongside three xAI engineers.

But Grok-3’s computing power leadership could be short-lived. Let’s jump to our technology expert Luke Lango:

Meanwhile, the world’s leading AI company – OpenAI – just announced that it will soon unveil its latest-and-greatest model, ChatGPT-4.5, within the next few weeks.

Reportedly, ChatGPT-4.5 is designed to process and remember more information, leading to more fluid and coherent conversations – an improvement particularly beneficial for multi-step processes.

It also aims to engage in more natural and dynamic interactions, making it a powerful tool for customer service, virtual assistance, and other dialogue-based applications.

Luke goes on to report that ChatGPT-4.5 will integrate with OpenAI’s newest Operator feature. This is an AI agent designed to autonomously perform web-based tasks by interacting with on-screen elements – think buttons, menus, and text fields.

What Grok-3 and ChatGPT-4.5 mean for the AI stock boom

After profiling the capabilities of Grok-3 and ChatGPT-4.5, Luke pivots to a critical point for investors…

These cutting-edge chatbots are paving the way for the emergence of hundreds of new AI applications over the next few months.

These new AI apps should proliferate throughout the global economy by late 2025…resulting in more sales and profits for their developers, more spending on the AI data centers that power them (so, greater profits for data center plays), and more demand for the surrounding infrastructure that enables the computing power (more profits for related components plays).

And this brings us full circle to how we opened this Digest:

At the end of the day, there’s one thing that will make or break your portfolio:

Earnings.

Despite some market overhangs today, earnings forecasts are up as we look ahead to the rest of 2025.

That doesn’t give us a license to just “stay in the market” without thoroughly analyzing our current stocks. We still must do the hard work of separating the fundamentally superior stocks from all else – same as Louis did with Eaton.

But if you own a great company that’s posting robust earnings growth, that’s a strong indicator of a higher stock price ahead.

Here’s Luke to take us out:

As go earnings, so go stocks.

With more fantastic earnings growth on the horizon, stocks are likely on the launching pad to fresh highs. And for those investors who get in early, before those gains continue, the profits could stack up fast.

That’s why we think this is a great time to be buying stocks.

Have a good evening,

Jeff Remsburg

Editor’s Note: Anyone familiar with my work knows I’m a numbers guy. I don’t buy and sell stocks based on a news article or a gut feeling. My quantitative stock system helps me identify fundamentally superior stocks best positioned to grow in value. The numbers tell me where to look for the best stocks.

That’s why I’m such an admirer of TradeSmith CEO Keith Kaplan.

To improve his own investing, Keith developed software to help him identify the best times to buy and sell a stock.

In a guest essay today, Keith shares an amazing story about how the system he helped develop saved his portfolio before the Covid crash of 2020, and how it helped him to grow his wealth in the historic run that followed.

After you read this, you’ll want to sign up for Keith’s event on Thursday, February 27 at 8 p.m. Eastern. He’s calling it The Last Melt-Up – and in this special event, you’ll learn how Keith’s system works and why it’s so accurate. You’ll also learn why he’s got his eye on an ultra-rare pattern that has only appeared in the markets three times going back 125 years. You can click here to sign up for your free spot now.

In the meantime, I’ll let Keith share his story and tell you more about the alert that saved his portfolio.

**************************

It was one of the most difficult moments of my professional life … but I had saved my portfolio!

It was early 2020 and I had flown to Florida to meet with a group of 50 of my peers where each of us pitched our best and biggest investment ideas.

Person after person was pitching greedy parts of the market that they believed were ready to soar.

When it was my turn, I told them all “I sold almost all my stocks on Friday.”

As you would imagine, I was not the most popular person in the room.

I urged people to protect their investments and consider warning their subscribers that a bear market was rapidly approaching.

I even showed them proof of how I knew we were headed toward the fastest bear market in history — one that would catch everyone by surprise and destroy years of wealth building.

I showed them the alerts I received and then how accurate these alerts have been over the last 20 years.

I was laughed at and told not to panic. Not a single person in the room wanted to hear what I had to say. And I understand why; the CNN Fear and Greed Index at the time was nearing extreme greed levels.

Why would they want to hear a bearish alarm?

But anyone who acted on my system’s advice saved their portfolio … and then made even more money when the system signaled it was time to get back in.

In the last 20 years, we’ve only made the system better…

And we are on the verge of another change in the market’s direction. One that you can be ahead of, while everyone else depends on outdated indicators.

The Alert that Saved my Portfolio

I remember it like yesterday.

On a Friday, Feb. 27, I had received a big, bearish alert from our system.

It basically said, “Run for the hills and sell your stocks.”

At the time I knew almost nothing about COVID-19 and I didn’t know how markets would react to what was coming.

But I did know that I trust our system, so the very next day, I sold nearly all my stocks.

Over the weekend, a quick stop into Target with my family gave us an early glimpse into the world of panic buying and hoarding we can all remember. We noticed a woman with a cart FULL of nothing but Clorox wipes.

Clearly, there was panic in the air, and we were just starting to see and feel it for the first time.

But I knew I didn’t have to panic about my portfolio.

Our system’s alerts are based on proprietary algorithms we created years ago and that routinely test and update. They’re based on momentum and short- and long-term trends. And they’re eerily accurate!

Here are the five most recent drawdowns prior to that day …

Obviously, a lot has changed since then. Indeed, we experienced the fastest bear market onset in history.

But we also experienced one of the fastest recoveries in the history of markets. We haven’t looked back, except for a few small setbacks.

The Alert that Led to Profits

In 2020, my personal portfolio was saved a huge loss thanks to the indicators I got.

And, just a month later, our indicators did it again, alerting me to a bullish set up in the markets.

This signal has been almost always right over 40 years of use and testing:

By this time the CNN Fear and Greed Index had plummeted to extreme fear and people were nervous.

Heck, I was nervous!

But again, I trusted the math and these signals, and I took action. I started gobbling up stocks that had big pullbacks and were noted “healthy” in our system by their green designation.

Boy was that the right decision!

Look what the market did the rest of the year!

As you can tell, I love our products and can’t wait to reveal more to you over the next few days.

In fact, it all started for us years ago when we invented what I call the “single most important number in investing.” And next week, on Feb. 27 at 8 p.m. Eastern, I’ll be unveiling the prediction in TradeSmith’s 20-year history. You can register to hear this prediction for free right here.

Thank you and all the best.

Warm regards,

Keith Kaplan

CEO, TradeSmith