Category Penny Stocks

Let’s hop in a time machine and take a trip back to October 2009…

We’re at the San Jose Fairmont Hotel, where a little-known conference called GPU Technology Conference (GTC) kicked off its first year.

Hosted by a company called NVIDIA Corporation (NVDA), the event draws about 1,500 people. Not a bad showing, considering it’s mainly geared toward tech geeks who are fascinated by these things called graphics processing units (GPUs).

These GPUs are earning raves from gamers. But they also have the potential to help solve some pretty complex computing challenges.

Now fast-forward to last week.

Who would have guessed that this event would become an annual mainstay in the tech world? Or that tens of thousands of people would attend – from CEOs to Wall Street analysts to rabid fans and investors?

For example, this year’s event hosted a record-breaking 25,000 people. As founder and CEO Jensen Huang joked during his keynote, “GTC used to be compared to Woodstock. Now, it’s more like the Super Bowl. But here, everybody wins.”

Now, I’ve talked a lot about NVIDIA’s Quantum Day recently – especially in last Friday’s Market 360, where I shared my key takeaways from this day.

But GTC wasn’t just a one-day thing. And the reality is that there were a lot more announcements NVIDIA made during the week that we need to cover.

So, in today’s Market 360, I want to talk about everything else NVIDIA shared last week and why these announcements are so important. I would be remiss if I didn’t also address the fact that the stock is also down year-to-date currently. But as I will explain, I’m not concerned and you shouldn’t be either. In fact, as I’ll explain in a moment, we have a completely new wave of the AI Revolution on the horizon, and investors need to prepare…

Core PCE inflation runs hot … Big Oil execs aren’t happy … is gold in for a breather? … where crypto goes next … a “rare chance” to get into leading AI stocks

This morning, the Federal Reserve’s favorite inflation gauge came in hotter than expected, and the market isn’t taking it well. As I write Friday early afternoon, all three major indexes are sharply lower, led by the Nasdaq’s 2.7% decline.

The February Personal Consumption Expenditures (PCE) Price Index showed prices remaining above the Fed’s target rate.

Though the all-items PCE data were in line with forecasts, core PCE, which strips out volatile food and energy prices, increased 0.4% on the month and 2.8% on the year. Dow Jones Economists had forecasted respective numbers of 0.3% and 2.7%.

The monthly increase was the largest gain since January 2024.

Meanwhile, the Bureau of Economic Analysis report released this morning found that consumer spending rose just 0.4% for the month. This was below the 0.5% forecast.

At least there was good news with personal income. It climbed 0.8% for the month, much better than the estimate for 0.4%.

As always, the question is, “how will this impact the Federal Reserve’s interest rate policy?”

The market’s answer appears to be “not much.”

As you can see below, the CME Group’s FedWatch Tool shows that traders are still putting heaviest odds on the Fed enacting three quarter-point cuts in 2025.

As I write, the probability clocks in at 32.9%. For context, one week ago it was 34%.

Regular Digest readers know that legendary investor Louis Navellier believes this undershoots how many cuts the Fed will ultimately deliver.

Here’s Louis from last week:

I still expect four key interest rate cuts this year.

The reality is that global interest rates will collapse given weak economic growth in Asia, as well as economic contractions in the U.K., Canada, France, Germany and Mexico.

Global central banks like the Bank of England and the European Central Bank will need to continue cutting key interest rates to shore up their respective economies.

And Treasury yields will continue to decline as global central banks slash key interest rates. Since the Fed does not fight market rates, I expect our central bank will follow suit and cut rates four times this year.

As we’ve highlighted in the Digest, if Louis is right, we’ll face a new question:

Will Wall Street interpret four rate cuts as a bullish, proactive measure from the Fed that’s promoting steady growth by aligning interest rates with the neutral rate…

Or will four cuts be seen as a bearish, reactionary move from a Fed that’s playing defense against a looming recession?

The market’s answer will drive your portfolio value.

We’ll keep you updated.

Welcome to our new running segment: “Uncertainty Watch”

In recent weeks, we’ve been highlighting the widespread uncertainty facing investors and corporate planners today. Much of it stems from President Trump’s tariff plans.

The fogginess is so pervasive that, today, we’re launching a new running segment: “Uncertainty Watch.”

(Hopefully, it’s a very brief running segment.)

The longer that corporate planners and U.S. consumers remain uncertain about upcoming economic conditions, the greater the likelihood that they hold off on capital expenditures and big-ticket purchases.

Enough of that and corporate profits fall… sentiment multiples contract… and our portfolios suffer the consequences. So, we’re going to track this uncertainty.

For today’s take, let’s zero in on Big Oil.

Yesterday, the Federal Reserve Bank of Dallas released the results of its quarterly survey of anonymous oil executives. I’ve read all the comments and they’re overwhelmingly negative.

The response below is, in my opinion, the best summation of the various issues, also tying in the investment impact:

As a public company, our investors hate uncertainty. This has led to a marked increase in the implied cost of capital of our business, with public energy stocks down significantly more than oil prices over the last two months.

This uncertainty is being caused by the conflicting messages coming from the new administration.

There cannot be ‘U.S. energy dominance’ and $50 per barrel oil; those two statements are contradictory.

At $50-per-barrel oil, we will see U.S. oil production start to decline immediately and likely significantly (1 million barrels per day plus within a couple quarters). This is not “energy dominance.”

This contradiction has been on our radar since I first read about “Drill, baby, Drill.”

Why would Big Oil drill more when the outcome would be lower oil prices?

Sure, there’s a hypothetical point at which lower prices might goose demand, resulting in higher overall consumption that increases Big Oil’s bottom line. But one step over that perfect supply/demand balance would eat into profits.

It appears that for many Big Oil executives, the risks associated with lower and lower prices outweighs the potential benefit of higher volumes.

We’ll keep tracking both oil and uncertainty and will report back.

Is gold due for a breather?

Gold continues to have a banner year.

As I write, it’s notching the latest in a series of all-time highs here in 2025.

As you can see below, gold is up 17% on the year while the S&P has fallen more than 4%.

But if master trader Jeff Clark is right, the yellow metal is due for a pullback.

For newer Digest readers, Jeff is a market veteran with more than four decades of experience. In his service, Jeff Clark Trader, he uses a suite of indicators and charting techniques to profitably trade the markets regardless of direction – up, down, or sideways. And one of them is signaling a potential reversal in gold.

From Jeff:

The gold sector is overbought.

The Gold Bugs Index (HUI) is trading historically far above its 50-day moving average line. It recently rallied 10% in just one week.

There’s negative divergence on the technical momentum indicators. And it looks vulnerable to a swift pullback.

Take a look…

HUI rarely strays more than 8% away from its 50-day moving average (the squiggly blue line on the chart) before reversing and heading back towards the line.

The red arrows on the chart point to the multiple times last year HUI traded 8% or more away from its 50-day MA.

Each time, the stock move reversed back towards the line almost immediately.

Now, if you’re in gold already, we recommend you snooze your way through any upcoming pullback. Given our federal government’s financial position, as well as soaring debt from global central banks, we anticipate far higher gold prices to come.

But if you’ve missed gold’s bull run this year, keep an eye on this over the coming days/weeks. Any substantial pullback could be a good entry point for a longer-term investor.

What’s the latest on “digital gold”?

As you can see below, after sinking to roughly $78,000 earlier this month, bitcoin has been edging higher. As I write, it trades just north of $84,000.

Source: TradingView

For where it’s headed next, let’s go to our crypto expert, Luke Lango. From his latest issue of Crypto Investor Network:

We think cryptos put in a durable bottom last week. We think the worst of the 2025 sell-off is over. 

And, most importantly, we think cryptos – Bitcoin and altcoins – are due to a big rally over the next few months. 

Luke lays out a handful of reasons. Two of them you’d expect: coming relief from Trump’s tariff-related uncertainty and a shift back to risk-on sentiment.

But the third is a little different – a “Fed Bump.” Here’s Luke:

Cryptos are a risk-on asset, and as such, they have developed a strong correlation with money supply. When money supply is robust and growing, investors have more money to pour into risky assets and they pile into cryptos, pushing crypto prices up.

When money supply is constrained and shrinking, investors have less money to pour into risky assets and they rush out of cryptos, pulling crypto prices lower…

Money supply growth is very closely tied to the Federal Reserve’s interest rate actions.

When the Fed is cutting rates, money supply growth expands as more money enters the economy through more lending and more spending. 

Luke explains that the Fed has moved to the sidelines and held rates steady since December. This has slowed money supply growth, which, uncoincidentally, has happened alongside a big drop in crypto prices. 

Luke doesn’t expect this to last:

Money supply growth should pick-up over the next few months because the Fed will get back into rate-cutting mode. 

The market is calling for about three rate cuts over the next 12 months. 

If we do get three rate cuts over the next 12 months, then money supply growth should expand over the next 12 months.

History says that should boost crypto prices. 

And that brings full circle to today’s PCE report and its potential impact on the Fed’s interest rate policy.

Finally, don’t miss this “rare chance” to get into leading AI stocks

Yesterday, Louis Navellier, Eric Fry, and Luke Lango sat down to discuss the emerging divide between the “haves” and “have nots” in the market – and in our society. One of the most influential factors behind this growing divide is wealth generated from cutting-edge technology and artificial intelligence.

Our three experts delivered the step-by-step playbook you need to follow to make the most of the opportunity (If you missed it, I encourage you to check out the replay here).

A quick note on why this presentation was especially timely…

AI is not a trend. It’s not going away.

As we pointed out yesterday using an example from Microsoft founder Bill Gates, AI’s capabilities will render most human labor unnecessary far sooner than many people realize.

Having your wealth aligned with AI is a critical defense against such economic creative destruction.

Today, fear is weighing on the prices of leading AI stocks. For example, AIQ, The Global X Artificial Intelligence & Technology ETF, is down almost 15% since mid-February.

But with a longer-term perspective – and the awareness of the enormous changes AI will bring – such a pullback is just a more attractive entry price.

Could AI stocks go lower? Absolutely – and investors should be prepared for that.

But the more important question is whether today’s prices are ones that are likely to reward investors, say, five or 10 years from now.

Here’s Louis’ overall take (not on AIQ, but on top-tier AI stocks in general):

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 yesterday.

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).

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Just when the market was starting to regain some upward momentum, President Trump announced another new wave of tariffs. Now stocks are sinking once again. 

Indeed, this past Wednesday, March 26, Trump issued a 25% tariff on all cars made outside the United States. That same day, the S&P 500 shed 1%, and the Nasdaq crashed 2%. 

As a result, both indices broke a three-day winning streak – their first such streak since the market peaked (and this whole tariff drama began) on Feb. 19. 

With these auto tariffs… and even more to come next week – Wednesday, April 2; what Trump is calling “Liberation Day” and “the big one” – we could be on the cusp of a global trade war bigger than anything we’ve seen in the past 100 years. 

We think it’s time to prepare for that potential outcome. 

The Stakes Are Rising

A 25% tariff on all imported vehicles is significant. 

Estimates vary. But generally speaking, about 50% of cars purchased by Americans are made in the U.S., and 50% are made abroad – a roughly equal split. That means 1 out of every 2 cars bought in America is now subject to a 25% tariff. 

If all those costs pass through to the consumer, then 1 in every 2 cars will now be 25% more expensive. As Newsweek estimates, “the tariffs could raise vehicle prices by as much as $12,500… With average prices already near $49,000, many households may be priced out of the new car market.”

That’s a big deal. And it may be just the tip of the iceberg here…

Because 25% tariffs on most Mexican and Canadian goods are also set to resume next week. 

These are two of America’s three biggest trading partners. Together, they import about $900 billion worth of goods into the U.S., including lots of household appliances, air conditioners, electrical components, surgical equipment, fresh produce, beer, oil, natural gas, timber, aluminum, and grains. In other words… just about everything. 

All those goods and supplies will now be subject to a 25% tariff, potentially making them 25% more expensive to buy.

Not to mention, Trump is expected to enforce multiple reciprocal tariffs against major U.S. trading partners, such as the European Union, India, and others. 

Those could dramatically disrupt global trade flows and create huge production bottlenecks… 

For the majority of 2024, the stock market enjoyed relatively smooth sailing. While stocks endured a few substantive pullbacks of 5%-plus, the S&P 500 rose nearly 20% between January 1 and October’s end.

But the U.S. presidential election and Donald Trump’s subsequent victory threw a wrench into the mix. The market’s once-steady rise quickly became more like a wild roller coaster ride.

Stocks began falling at the start of the new year, only to rally strongly into mid-February as the S&P gained more than 5%. But then another selloff began. And over the past month, the market has crashed almost 7% lower – its worst selloff since 2022. 

The dust may not have settled yet; but we believe stocks are approaching their next turn on this roller coaster – and we think they’ll be roaring higher into the summer. 

There are five important reasons driving this bullish outlook…

Ending With a Fizzle 

First and foremost, we expect the ongoing tariff drama should soon pass. 

The first two months of Donald Trump’s second term as president have been dominated by tariff announcements. For a while, it seemed the president was threatening fresh duties every single week.

All that drama has created significant economic uncertainty, driving slowed economic activity and depressed consumer confidence and stoking inflation fears.

We expect this will all come to a head next week, on Wednesday, April 2 – what Trump is calling “Liberation Day.” That’s when he plans to launch his biggest wave of tariffs yet. According to President Trump, this is the “big one.” It will include reciprocal tariffs on multiple countries, potentially even sector-level tariffs (though recent reporting suggests those could be off the table for now). 

But we think this show will end with more of a fizzle, not a bang. 

Treasury Secretary Scott Bessent recently said he expects the U.S. to negotiate trade deals with its major trading partners soon after April 2, meaning the tariffs wouldn’t stay in place for long. If he’s right, then all this drama should end quickly. 

After all, this is the “big one.” Once Trump negotiates his intended deals on this next batch of tariffs and they are repealed, what happens after? In our view, probably nothing. That’s because there is no “other shoe to drop,” if you will. This is the finale. Once it has concluded, this story should be over. 

So, here’s what we see as the base-case scenario. “Liberation Day” comes. New tariffs are enforced. The U.S. negotiates trade deals with its major trading partners. The tariffs get repealed, and we put all this nonsense behind us. 

The ensuing relief should help boost stocks into summer. 

Two Major Shifts to Boost the Stock Market

Once the policy uncertainty is behind us, the White House will likely shift its focus to tax cuts. 

Wall Street abhors tariffs; but it certainly loves tax cuts. That’s why stocks initially soared after Election Tuesday – investors were celebrating the potential major cuts to come. 

Much to Wall Street’s chagrin, the White House has been squarely focused on tariffs since Inauguration Day, not making progress on a big tax cut package. But we think that will change by late April. 

We expect that once we see resolution to the impending “Liberation Day,” there will be a lot of headlines about politicians inching closer to tax cuts over the summer.

This policy shift from the White House should boost stocks throughout April, May, and June. 

And this isn’t the only major shift coming down the pike… 

The third bullish factor driving our outlook is that the U.S. Federal Reserve should pivot back into rate-cutting mode shortly.

The Fed did cut interest rates a few times in 2024, but it has been on pause over the past four months amid worries about sticky inflation. 

It now appears those inflationary pressures are subsiding, with oil prices dropping below $70 a barrel and the Truflation rate collapsing below 2% in March. Meanwhile, the economy has started to show some signs of stress recently via a slowdown in consumer spending and a big crash in consumer confidence. 

As such, it seems likely that the Fed will resume its rate-cutting campaign soon. 

In fact, Wall Street thinks another rate cut will happen by July and that the central bank will cut interest rates between two and three times this year. We happen to think that the Fed will cut rates even earlier than that, in June, and believe it could cut up to four times in 2025. 

Either way, multiple rate cuts are most likely on the way. And that should help stocks greatly. 

Editor’s Note: Before we get to today’s Market 360 article, I want to thank everyone who joined us for the Technochasm broadcast earlier today.

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

In the event, we delivered a step-by-step playbook you need to follow to make the most of this opportunity, so I hope you took advantage.

If you missed it, I encourage you to check out the replay here.

Now, back to today’s article… where I’ll explain how the current market environment fits into the Technochasm – and how you should handle it.

Enjoy.

Bill Gates on where AI is going … a “free intelligence” economy … more uncertainty from Trump’s auto tariffs … checking in on the U.S. consumer

How will AI impact your day-to-day life in the near future?

Last month, Microsoft founder Bill Gates was a guest on The Tonight Show with Jimmy Fallon.

When asked about the future of artificial intelligence, Gates responded:

[Today,] intelligence is rare – you know, a great doctor, a great teacher. With AI, over the next decade, that will become free, commonplace. Great medical advice, great tutoring.

And it’s kind of profound because it solves all these specific problems… But it brings with it so much change.

What will jobs be like? Should we just work, like, two or three days a week?

I think it’s a little bit unknown. Will we be able to shape it?

And so, legitimately, people are like, “wow, this is a bit scary.”

Fallon responded, “Will we still need humans?

Gates’ response?

Not for most things.

It’s critical that we see the big picture

Our last two Digests have dug into various aspects of the coming age of AI in the run-up to this morning’s roundtable discussion with experts Louis Navellier, Eric Fry, and Luke Lango.

During this fantastic, eye-opening conversation, our experts detailed how AI is exploding the “Technochasm.” This is Eric’s term to describe the stark – and expanding – wealth gap in the United States that has been driven by technology.

They also named a handful of stocks they believe will benefit from this massive, AI-related wealth shift (You can catch a free replay right here).

Returning to Bill Gates, to flesh out his “humans won’t be necessary” point, here’s Harvard Magazine, reporting on another interview Gates conducted recently at his alma mater:

Unlike the first PCs, which merely amplified human capabilities, AI has the potential to replace them.

Gates pointed out the existential shift: “Intelligence will be completely free.”

What does that mean?

Computing was once about making existing tasks more efficient, he explained, but AI could fundamentally redefine what tasks humans delegate to people or to machines.

Now, if humans won’t be necessary “for most things,” and intelligence will be “completely free,” then what will be our source of economic value?

In other words, how will Americans earn a paycheck?

Is an AI utopian future achievable?

Some readers may already be pushing back:

Jeff, you’re missing the point. Personal economic value won’t be necessary. AI will create, do, and achieve everything for us, so no paychecks will be needed.

Even if that’s true, let’s not overlook something…

That utopian scenario exists on the other side of an incredibly messy transition period.

Think about that chaotic “in between” where a tiny fraction of people controls AI, reaping enormous financial rewards at the expense of the majority that AI has rendered economically unnecessary.

Even if AI’s eventual outcome is utopian, we could experience enormous social/economic turbulence before we achieve it through government legislation or whatever means it arrives. “Heaven” for those who own AI… “Hell” for everyone else.

If so, then one of the best (and potentially, only) protective steps we can take today is to align our wealth with AI.

After all, if you and I lose our livelihoods to AI as we transition to Gates’ “free intelligence” future, then investing in the technology that will replace us appears to be a critical economic protectant.

This morning, Louis, Eric, and Luke mapped out what they’re doing from an investment perspective, providing a blueprint for how to benefit from the “chaotic in between” rather than be victimized by it. You can check it out right here.

We’ll continue updating you as this Technochasm widens.

“Uncertainty” continues to weigh on the economy and the investment markets

In recent Digests, we’ve highlighted how uncertainty is a massive headwind today.

The question marks relate to many things: President Trump’s tariff plans, inflation’s upcoming direction, the Fed’s interest rate policy, and whether consumer spending can hold up, to name a few.

Trump added to the uncertainty yesterday.

On Wednesday, he said that tariffs would be “very lenient,” even suggesting that tariffs on China could drop to further a deal for TikTok.

But last night, he announced a 25% tariff on all imported cars and car parts.

Here’s The New York Times:

The tariffs will go into effect on April 3 and apply both to finished cars and trucks that are shipped into the United States and to imported parts that are assembled into cars at American auto plants.

Those tariffs will hit foreign brands as well as American ones, like Ford Motor and General Motors, which build some of their vehicles in Canada or Mexico.

Nearly half of all vehicles sold in the United States are imported, as well as nearly 60 percent of the parts in vehicles assembled in the United States. That means the tariffs could push up car prices significantly when inflation has already made cars and trucks more expensive for American consumers.

We’re seeing increasing evidence that “uncertainty” is weighing on economic activity.

For more, let’s go to legendary investor Louis Navellier and his Growth Investor Flash Alert yesterday. Here he is highlighting recent economic data pointing toward an uncertain consumer:

The economic news has not been good this week.

The Conference Board consumer confidence survey dropped for the fourth month in a row, and the drop was huge. It went from 101.1 in February to 92.9 in March. Economists were expecting 94.5, it was a huge disappointment.

The expectations component in the Conference Board’s consumer confidence index is now at its lowest level in 12 years. The present situation component also declined.

So, that means that consumers are not very certain on anything, and so that’s dangerous.

We have to keep an eye on this. If I was on the Federal Reserve Board, I’d cut interest rates right now just based on that report.

Now, it’s not all bad news. Louis points out that Trump’s tariffs are having some desirable effects:

A good example is Vietnam, [which] has the third largest trade deficit with America. 

Based on the fear that Trump’s going to impose tariffs on them, Vietnam has cut its tariffs on vehicles, liquefied natural gas (LNG), ethanol and various agricultural goods. Furthermore, Vietnam has tried to placate the Trump administration by not having any limit on U.S. imports.

So, this is going to be happening with all the countries. They’re all going to be trying to adjust things.

Despite the progress, Louis and I share the same opinion on tariffs: Let’s use them briefly, effectively, and then get back to free trade.

Here’s Louis:

Hopefully, after [President Trump’s] “Liberation Day,” April 2, when the tariffs are put on, all the uncertainty diminishes.

In a perfect world, we would have free and fair trade with no tariffs.

So, let’s get this Liberation Day over with so all the uncertainty disappears. And let’s go onward and upward.

Circling back to the consumer, keep your eyes on a few new developments…

Data on the U.S. consumer is mixed. Let’s ping-pong our way through some recent headlines.

On student loan defaults, here’s the latest from CNBC yesterday:

Around 9.7 million student loan borrowers became past due on their bills after the Covid-era payment pause expired, according to a new estimate by the Federal Reserve Bank of New York…

The New York Fed estimates that the volume of past-due federal student loans hit 15.6%, with more than $250 billion in delinquent debt.

Meanwhile, though our overall unemployment number remains relatively low and stable, there are issues to watch.

Here’s hiring placement service Challenger, Gray, & Christmas from earlier this month:

U.S.-based employers announced 172,017 job cuts in February, the highest total for the month since 2009 when 186,350 job cuts were recorded…

February’s total is a 245% increase from the 49,795 cuts announced one month prior. It is a 103% increase from the 84,638 cuts announced in the same month last year.

Now, much of this is related to DOGE’s federal job cuts. So, while we feel for the federal workers who have lost their jobs, these losses don’t necessarily represent a wider trend in the overall labor market. Plus, there is some good news out of the report…

Though Federal Reserve Chairman Jerome Powell referred to our labor market as “low hire, low fire,” the Challenger, Gray, & Christmas report suggests robust hiring is on the horizon:

Companies’ hiring plans surged in February to 34,580.

So far this year, companies plan to hire 40,669 workers, an increase of 159% from the 15,693 hiring plans announced during the same period last year.

But even for people who have jobs, a recent report from Bank of America Institute finds that nearly half of Americans believe they are living from paycheck to paycheck.

Now, the article explains that the definition of “paycheck to paycheck” is vague. Some Americans might use the term despite putting money into savings accounts (because they see zero disposable dollars left over at the end of the month).

So, let’s ignore those specifics and focus on the broader trend. Here’s USA Today:

In the Bank of America surveys, the share of consumers who said they lived from paycheck to paycheck has gradually risen, from about 35% in early 2022 to 47% in the third quarter of 2024.

Let’s end today by coming full circle to AI and the Technochasm-fueled wealth gap

Regular Digest readers are familiar with our “K”-shaped economy. The “haves” at the top end of the “K” have done very well over the last several years as their assets have risen ride atop inflation.

However, “have nots” at the lower end of the “K” have been stretched financially as inflation has eroded the purchasing power of family budgets.

Here’s Bloomberg with the latest data on this “haves” and “have nots” divide:

The richest half of American families owned about 97.5% of national wealth as of the end of 2024, while the bottom half held 2.5%, according to the latest numbers from the Federal Reserve.

For as lopsided as this is, AI and the Technochasm will only exacerbate it…at least during the “chaotic in between.”

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Hello, Reader.

Tom Yeung here with today’s Smart Money.

If you ask the average retail trader how they feel about the market today, you can expect to get a list of four-letter expletives.

Since the start of the year, the percentage of people surveyed by the American Association of Individual Investors (AAII) who are bearish about the market has surged from 34% to roughly 60%.

The mood has also shifted among average Americans, with around half of survey-takers feeling the economy is getting worse, up from a third in January.

And why wouldn’t they feel awful? Shares of companies like Nvidia Corp. (NVDA) trade 23% below their January highs, while those of Tesla Inc. (TSLA) are 40% underwater.

Every day seems to bring another round of uncertainty over which country will face tariffs next… or which government agency will get the ax.

But the broader stock market paints a different picture.

The S&P 500 index trades just 6% below its all-time high reached in mid-February. Many emerging markets will drop by more in a single day. In fact, over a third of S&P 500 companies have risen over that period.

The reason for this divergence is straightforward:

The selloff in expensive, well-known tech stocks is being offset by a pivot into lesser-known value stocks.

So today, let’s dig into why market uncertainty is reshaping investment strategies, pushing formerly overlooked trades into the spotlight… and how the move toward value investing pays off.

Then, I’ll share an even bigger story playing out in the markets.

It’s causing a big divide among investors… and you don’t want to get caught on the wrong side.

The Revenge of Value

Since the S&P 500 peaked on February 19, prices of cheap companies have held up far better than their expensive counterparts. In fact, this divergence has been noticeable with even the most basic metrics.

Over the past month, prices of the lowest-quintile of S&P 500 companies by current price-to-earnings (P/E) ratio have lost just 4%. This compares to an 8% loss among the highest S&P 500 companies by P/E ratio.

The split is even starker on a sector-by-sector basis.

Over the same period, shares of biopharmaceutical companies are up 3%, energy companies have risen 4%, and water utilities have jumped 12%. Meanwhile, IT services are down 19%. 

So, the upshot of market uncertainty is that formerly “conservative” trades are becoming hot again.

For instance, shares of recommendation Bristol-Myers Squibb Co. (BMY) – a recommendation in my paid service Fry’s Investment Report – are up 7% since February 19 on no particular company news. Analysts have largely kept their 2026 earnings per share estimates constant at $6.16.

The rise of gold is even more noticeable. Since February 19, prices of the safe-haven metal are up 4%. Shares of companies with leveraged exposure, such as miners, have risen even further.

The key change is the way investors are now viewing stable streams of cash. Profit-producing companies like pharma and mining firms are suddenly seen as a safe way to store and make money, rather than as money-sinks that get left behind.

In a sense, this return to unpopular stocks is a return to more “classic” markets like those seen in the 2010s in the aftermath of the financial crisis, or the mid-2000s with the rise of China. Value companies with solid cash flows are performing well, while riskier moonshot assets are not.

It’s a market where the Warren Buffetts of the world will succeed, while the Cathie Woods do poorly.

In a Smart Money at the beginning of the year, Eric predicted that 2025 would see the “Revenge of Value” – where the richly priced “Magnificent Seven” stocks would underperform. In turn, value stocks, precious metals, and drugmakers would surge.

That’s why over the past several months, Eric has recommended his Fry’s Investment Report members and other readers to exit Mag 7 positions and add lower-priced tech alternatives in addition to holding onto gold and other commodity picks.

We’re now seeing these moves pay off.

Though other investors might have plenty of four-letter words to go around, we’re maintaining our focus on one of the most important five-letter words in investing: v-a-l-u-e.

The Coming Tech Divide

And while tariffs, or even a full-blown trade war with several countries, is nothing to be ignored, most people are missing an even bigger story playing out… 

Since 2020, Eric has been tracking a phenomenon he calls the “Technochasm.” This phenomenon refers to the deep divide that technology is creating within the market.

On one side of the gap are the companies (and investors) who leverage rapid technological innovation. On the other: Investors and businesses that get caught off guard and fall behind.

Then, artificial intelligence came along and lit a match under the Technochasm, turning it into an abyss.

But Eric, along with his InvestorPlace colleagues Louis Navellier and Luke Lango, see a big opportunity amid this disruption. One they are capitalizing on in their shared research service AI Revolution Portfolio. (To learn more about this service, click here.)

The last time Eric went public with the Technochasm phenomenon, he helped his readers get in front of winners like 1,350% in only 11 months from mining company Freeport-McMoRan Inc. (FCX).

That is why, this morning, Eric, Louis, and Luke held an important broadcast to explain exactly how this massive capital shift will create the next generation of tech millionaires – and potentially leave millions of others behind.

If you want to learn more about this opportunity – and the six stocks at the center of it – click here to access the free replay.

Regards,

Tom Yeung

Markets Analyst, InvestorPlace

A software engineer with two decades of mastery, Sarah was the backbone of her company — until her firm traded network infrastructure for AI-driven systems.

Now, in her 40s, she’s reskilling from scratch, piecing together a fractured work life while execs toast a stock surge. Her story is foreboding, as tech layoffs continue to spike and investment in artificial intelligence continues to surge.

Then there’s Jay. A Midwest coder with no fancy degree, he tinkered in his garage with free AI tools in 2023. By 2024, he’d built a marketing automation gem that landed him a multimillion-dollar VC check. No corporate ladder, no Silicon Valley ZIP code — just a guy who saw the wave coming and surfed it to the top.

Reports from the IMF (International Monetary Fund) reveal that in countries where 60% of jobs are exposed to AI (like the U.S. and the U.K.), there’s a rough split between those who benefit from AI and those who are at its mercy. Some high-skilled workers are leveraging AI to command higher salaries. While lower-skilled workers are increasingly being displaced by AI. Meanwhile, the World Economic Forum says artificial intelligence will spawn 170 million jobs like Jay’s by 2030…

The tech world is splitting in two. The question is: Which side of the chasm are you on?

On one side, execs pop Champagne as AI turbocharges stocks and mints new fortunes. On the other, workers like Sarah watch their careers vaporize overnight, replaced by algorithms they don’t understand. The rules of work and wealth are being rewritten, and most people are still playing the old game.

Five years ago, Eric Fry, Louis Navellier, and myself, spotted this tectonic shift ripping through the economy. We dubbed it the “Technochasm”… and we warned it would split the world into winners and losers.

What we didn’t fully grasp then? Artificial intelligence would pour jet fuel on this divide, turning a chasm into an abyss — overnight.

Forget what you think you know about technology “leveling the playing field.” AI isn’t here to save everyone — it’s here to crown winners and bury losers.

So, today we’ll dig deeper into how exactly artificial intelligence is widening the gulf between the haves and the have nots…

And how you can get to the other side unscathed.

AI’s Next Act: From Brute Force to Intelligent Application

The AI boom started with brute force — big data, bigger budgets, and chipmakers like Nvidia (NVDA) cashing in as data centers sprouted like weeds.

This worked … for a while.

That’s why, starting in late 2022, Louis Navellier, Eric Fry, and I first focused on the “picks and shovels” of the AI Revolution — the hardware companies, like Nvidia, that built the infrastructure on which artificial intelligence stands today.

These “AI Builders” saw their stocks soar as data centers expanded across the country. In hindsight, we nailed that phase.

But we’ve now entered a new, more sophisticated phase of the AI Revolution.

As Yann LeCunn, one of the “Godfathers of AI,” noted, we’re reaching a point where simply scaling up AI models produces diminishing returns. In other words, it’s time to move past the developers and the hardware firms that make their work possible.

The real value is shifting to what we call “AI Appliers” – nimble firms weaving imperfect artificial intelligence into real-world solutions.

Think less “supercomputer” and more “street-smart disruptor.”

This shift is where fortunes will be made — or lost. It’s no longer enough to simply adopt technology — companies must now integrate AI intelligently into their business models or risk obsolescence.

The proof is in the numbers. Goldman Sachs predicts AI could axe 300 million jobs worldwide. While this may sound like fear mongering, the job losses are already piling up…

In 2024 alone, 200,000 jobs evaporated due in large part to artificial intelligence — Cisco Corp. (CSCO) slashed 7% of its staff while pumping $1 billion into AI startups.

But there’s two sides to this coin: While some are losing jobs, like Sarah, others are building fortunes, like Jay.

It’s estimated that the AI-fueled stock boom has helped create at least 500,000 new millionaires in the U.S. alone. I suspect the actual number is much higher.

Just look at some of the returns from AI-focused companies:

• AppLovin Corp. (APP), which uses AI for marketing optimization, has skyrocketed over 3,000% since the AI boom began.
• Dave Inc. (DAVE), a digital bank using AI for credit analysis, climbed as much as 500% in roughly one year.
• IonQ Inc. (IONQ), which makes components for AI computing, saw its stock surge almost 600% in just four months.

Meanwhile, the losers are bleeding out, stuck in yesterday’s playbook.

This stark dichotomy between winners and losers is exactly what we predicted with the Technochasm thesis – but AI has accelerated and amplified these trends beyond what anyone imagined.

And we’re just getting started…

Editor’s Note: As the waves of tech innovation ripple through our economy and society, it’s going to create unfathomable opportunities.

But it will come at a cost.

You don’t want to find yourself on the wrong side of this gap, which is why I’ve teamed up with my InvestorPlace colleagues Louis Navellier and Luke Lango to help you prepare for the shift.

The reality is this “Technochasm” is about to drastically accelerate… so we’re stepping forward to not only warn investors but help them thrive during this next chaotic chapter of AI.

It all leads up to our urgent briefing on Thursday, March 27, at 10 a.m. Eastern where we will be sharing three critical steps you must take now to stay on the right side of this. The event is only a day away, so this is your last chance to sign up.

Click here to save your seat for this free event.

Yesterday, we heard from Luke. So, today I have asked Louis to share his views on the unprecedented waves of change that are headed our way – and how investors can prepare.

Take it away, Louis…

We’ve seen this pattern before…

An essential business tool emerges, and companies begin to integrate it to make better decisions, cut costs and boost profits.

Winners emerge and losers go out of business.

When the internet took off, brick-and-mortar retailers like Borders and Blockbuster collapsed, while Amazon.com Inc. (AMZN) surged.

The rise of smartphones wiped out BlackBerry Ltd. (BB) and Nokia Oyj (NOK), but Apple Inc. (AAPL) and Alphabet Inc. (GOOG) soared.

Tesla Inc. (TSLA) forced the auto industry into a complete reset, and those that failed to adapt paid the price.

The same pattern is unfolding now with artificial intelligence.

Companies across healthcare, finance, energy, retail and manufacturing are adopting AI and improving their margins.

Companies using AI in ways most investors aren’t even thinking about yet could emerge as the biggest stock market winners.

For example, some companies are starting to thrive as new AI-powered efficiency makes them more profitable.

Large businesses are changing to generate tens of billions of dollars in revenue through the work of just a few hundred people leveraging AI.

Other businesses with a large headcount will begin employing AI – rather than humans – to achieve massive cost savings.

Now, I don’t like it when people lose their jobs, folks. But the reality is that this is happening whether we like it or not.

In this new world, there will be two kinds of companies

1. Those that master AI and employ fewer and fewer people while generating huge amounts of revenue.
2. And companies that go out of business.

Case in point: Amazon.

This online retailer behemoth is the second-largest private employer in the U.S. – 1.5 million people.

It’s also one of the largest investors in AI.

It’s building out fully autonomous warehouses… it’s working to automate the delivery process with self-driving vans and delivery drones… and 30% of its “workforce” are already robots.

Here’s a look at one robot Amazon uses, called Sparrow, that picks and sorts hundreds of thousands of orders at a warehouse in San Marcos, Texas.

Source: Amazon

So, let me ask you this: How much longer until Amazon decides these robots are ready to take on the full workload of its 1.5 million remaining workers? And what do you think will happen when 1.5 million hardworking Americans are suddenly out of a job?

TechCrunch reports that 2024 saw more than 150,000 job cuts across 549 companies due to AI. And so far this year, 22,000 workers in the tech industry have been laid off –16,084 of those cuts took place in February alone.

As more and more companies make these changes, a chasm is opening up.

On one side are the companies leveraging AI to unlock efficiency and boost profitability. This will allow some companies to cement their market leadership, while others will use it to supplant the current king of the hill.

On the other side of the divide will be those that fail to adapt. They will stagnate – or even collapse – under the weight of increased competition.

The reality is there is a shift ripping through the economy, and this split is going to create a vast chasm between the haves and have-nots. This is what my InvestorPlace colleagues, Eric Fry and Luke Lango, and I call the Technochasm. It’s something we’ve been talking about for five years now.

We warned it would split the world into winners and losers… but at the time, we didn’t foresee the impact that AI would have.

Now today, we stand to see the biggest wealth shift since the Industrial Revolution. And it’s happening right now due to the Technochasm. So in today’s article, I want to share with you why this is, and how you can prepare for it to make sure that you’re on the right side of the divide.

Finding the Winners of the Technochasm

So, how can you position yourself on the right side of the chasm?

That’s where Eric, Luke, and I come in.

Eric has a unique “macro” approach. By looking for big-picture trends that drive huge, multiyear moves in entire sectors of the market, he is able to extract and exploit the moneymaking opportunities a regular Wall Streeter would miss.

And Luke believes that technology – whether existing now or in development for the future – can compound exponentially, change lives and alter generations of wealth.

Now, if you combine my proprietary stock-picking system with the investing styles of my colleagues Eric and Luke, you get an unstoppable team.

Together we have a perfect way to find AI stocks that can help you keep from falling into the Technochasm (click this link to sign up for our free briefing).

Playing the Next Chapter of the Technochasm

So, with the AI wave of the Technochasm upon is, it is important you are backed by sound investing strategies. That’s why, on Thursday, March 27, at 10 a.m. Eastern, Eric, Luke and I will be sharing a groundbreaking AI announcement that could make or break investors moving forward. (Click here to sign up now.)

During this broadcast, we will:

• Show you three critical steps you must take now to stay on the right side of the Technochasm,
• Share where the big money will be made in AI moving forward,
• How the Trump administration just kicked off a modern-day Manhattan project… and why it could lead to US dominance,
• Why the AI Revolution has yet to deliver its biggest stock market winners,
• And so much more…

Essentially, we will give you the blueprint you need to follow if you want to make the most money possible in this next chapter of the Technochasm. We’re hosting that urgent free briefing on Thursday, March 27, at 10 a.m. Eastern.

You can reserve your spot now by clicking here.

Sincerely,

Louis Navellier

Editor, Market 360

Corporate euphemisms for firing people … Amazon and record profits … Louis Navellier’s stock market binary … tomorrow’s “Technochasm” event

“Corporate Ozempic.”

That’s how marketing professor and public figure Scott Galloway describes AI.

And just as some Ozempic users are shy to reveal they’re taking the drug, many corporate managers are hesitant to admit they’re using AI to trim their workforce.

Instead, we’re getting phrases like “cost-cutting efforts”, “focus on efficiency”, and the latest buzzword, “cost avoidance.”

But make no mistake – what we’re seeing is a swap-out of human workers for AI/robotics.

Here’s The Wall Street Journal:

Businesses are starting to link their artificial intelligence initiatives with paring back hiring plans, or so-called cost avoidance, in an effort to justify investing in the technology…

Cost avoidance is an appropriate term, according to Thomas Bodenski, chief operating officer of financial software company TS Imagine, because “we have this mindset: doing more with the same.”

Rather than hiring more knowledge workers for repetitive tasks such as filtering emails, Bodenski said, implementing a new AI-based sorting process has allowed TS Imagine to hold headcount at existing levels…

TS Imagine receives 100,000 email alerts each year, Bodenski said, and manually sorting them requires 4,000 hours of work—roughly equivalent to 2½ full-time workers.

AI can do the work at 3% of the cost of the employees, he said.

As you’d imagine, when AI enables corporate managers to achieve the same output at just 3% of the human workforce cost, people lose jobs and companies get rich.

Here’s Galloway:

Recent financial news features two stories: layoffs and record profits. These are related.

As one illustration, look at Amazon

Here’s Domusweb (a digital newspaper) to establish context:

Amazon.com Inc. is the second largest employer in the world, with 1.5 million employees.

Compared to its 2021 peak, however, it has seen a reduction of more than 100,000 employees in parallel with the expansion of its robotic fleet, which grew from 200,000 machines in 2019 to 520,000 in 2022, and now stands at 750,000.

Tying in “record profits,” let’s jump to Fortune from last month:

After posting a record-breaking $20 billion in profits during the fourth quarter of 2024 alone, almost double its $10.6 billion from the same quarter the prior year, Amazon is once again looking like the version of itself that many of its rivals should fear…

[Amazon CEO Andy Jassy] told analysts on an earnings call Thursday that Amazon will spend around $100 billion or more on capital expenses in 2025, up at least 20% from 2024.

The “vast majority” of this year’s capex will go toward supporting Amazon’s broad and deep investments into artificial intelligence infrastructure as the tech giant competes for what Jassy called “probably the biggest technology shift and opportunity since the internet.”

Earlier this week, legendary investor Louis Navellier weighed in on this shift, speaking directly about Amazon

For newer Digest readers, Louis is one of the most respected analysts in our industry. His ability to see what’s coming – and get his subscribers there ahead of time – has helped him amass one of the most envied newsletter performance-records in our business.

Here’s Louis:

Amazon is building out fully autonomous warehouses… it’s working to automate the delivery process with self-driving vans and delivery drones… and 30% of its “workforce” are already robots.

So, let me ask you this: How much longer until Amazon decides these robots are ready to take on the full workload of its 1.5 million remaining workers?

And what do you think will happen when 1.5 million hardworking Americans are suddenly out of a job?

I don’t like it when people lose their jobs, folks. But the reality is that this is happening whether we like it or not.

In this new world, there will be two kinds of companies:

1. Those that master AI and employ fewer and fewer people while generating huge amounts of revenue.
2. Those that go out of business.

And let’s be clear, this isn’t limited to struggling companies using AI as a lifeline to right the ship and return to profitability.

Most of the companies incorporating AI today are profitable. But AI can help them become even more profitable.

Here’s Forbes making this point in an article highlighting corporate job cuts:

Michael Ryan, a financial advisor, says that AI is a big driver in the [job cut] announcements…

“It’s not like these companies are struggling to stay afloat. They’re making these cuts while their bottom lines look good.

“I think what we’re seeing isn’t just a normal economic hiccup. It feels more like companies are using this moment to fundamentally reshape how they operate.

“They’re thinking, ‘Well, if we can replace these positions with automation, why wouldn’t we?’”

AI is going to widen today’s wealth gap

Yesterday, I highlighted the “Technochasm.” This is the term our global macro expert Eric Fry coined to describe the stark – and expanding – wealth gap in the United States that, in large part, has been driven by technology.

Louis has come to the same conclusion:

As more and more companies make these changes, a chasm is opening up.

On one side are the companies leveraging AI to unlock efficiency and boost profitability. This will allow some companies to cement their market leadership, while others will use it to supplant the current king of the hill.

On the other side of the divide will be those that fail to adapt. They will stagnate – or even collapse – under the weight of increased competition.

The reality is there is a shift ripping through the economy, and this split is going to create a vast chasm between the haves and have-nots.

Tomorrow morning at 10 a.m. Eastern, Louis, Eric, and our technology expert Luke Lango are holding an important roundtable discussion focused on this chasm.

They’ll discuss how to make sure you’re an investment “have” as AI continues to widen the gap between the “haves” and “have nots.”

Together, they have identified a small group of companies that appear best positioned to leverage AI to increase their bottom lines (and by extension, stock prices) – regardless of whether corporate managers admit that’s what’s happening or keep their “corporate Ozempic” hush hush.

Here’s more from Louis on tomorrow’s event:

During this broadcast, we will:

• Show you three critical steps you must take now to stay on the right side of the Technochasm,
• Share where the big money will be made in AI moving forward,
• Explain how the Trump administration just kicked off a modern-day Manhattan project… and why it could lead to US dominance,
• Detail why the AI Revolution has yet to deliver its biggest stock market winners,
• And so much more…

Essentially, we will give you the blueprint you need to follow if you want to make the most money possible in this next chapter of the Technochasm.

To reserve your seat, click here (the click will immediately register/sign you up).

Wrapping up…

Let’s bring today’s Digest full circle to those corporate buzzwords that are camouflaging what’s happening in the labor force. 

If you’re a regular market-watcher, you know that Palantir has been one of the best-performing stocks over the last two years. While the S&P has climbed 39% over this period, Palantir has exploded more than 1,000%.

With that background, here’s the WSJ:

At Palantir Technologies, which sells data-analytics software to businesses and governments, AI has already reduced future headcount by 10% to 15%, according to Chief Information Officer Jim Siders. 

Speaking at The Wall Street Journal’s CIO Network Summit event in October, Siders said “headcount avoidance” and associated savings enabled Palantir to invest in “the next round of experimentation.”

The Technochasm widens…

Have a good evening,

Jeff Remsburg