In 1990, Tim Berners Lee brought forth the World Wide Web. However, it was five years later, with Amazon.com Inc. (AMZN) making its inaugural online sale, that the internet truly entered the global consciousness. Just as the first BlackBerry Ltd. (BB) smartphone emerged in 1999, its "Day One" arrived eight years later with Steve Jobs's iconic iPhone announcement, heralding a new era. Now, as we edge closer to 2025, another momentous event looms on the horizon, set to ignite the most profound and rapid societal transformation in human history. We have christened it "AI Day One."
Understanding the Dynamics of the AI Revolution
I have long observed the AI Revolution unfolding in two distinct waves. The first is the buildout phase, or the AI Builder boom. During this stage, AI-focused companies are investing billions to construct new data centers, acquire AI chips, build fabs, and more. It is a race to create the essential infrastructure for developing novel AI products, services, and applications. The AI Builder stocks, which are responsible for building these data centers and manufacturing those chips, have been the major beneficiaries.Conversely, the application phase, or the AI Applier boom, sees companies spending vast amounts to actually develop and deploy new AI applications on top of this infrastructure. The AI Applier stocks, those making and utilizing these new AI applications, are set to be the next big winners. It is only a matter of time before a "killer app" emerges and sends these "new wave" AI Applier stocks soaring.The Contrarian Approach to the AI Boom
The AI Builder boom commenced during the initial 18 months or so of the AI Revolution, following Chat-GPT's debut in late 2022. Stocks like Nvidia Corp. (NVDA) and Super Micro Computer Inc. (SMCI) were the prominent winners, outperforming AI Applier stocks from late 2022 to summer 2024. But a few months ago, we transitioned into the "second wave" of this revolution. Since July 2024, top AI Builder stocks like Nvidia have faced challenges, while top AI Applier stocks like Axon Enterprise Inc. (AXON) and AppLovin Corp. (APP) have witnessed significant growth. AI Appliers have taken the lead from AI Builders.My paid-up members have reaped substantial benefits from this phase shift. We anticipated the AI Applier boom and held top AI Applier stocks like AXON and APP in our model portfolios well before they took off. In one of my research services, we recently recommended booking partial gains on our AXON recommendation, which has seen a growth of over 350%. APP stock has also surged more than 350% since our recommendation.However, this does not imply that we have overlooked AI Builder stocks. In fact, we believe AI Builders are poised for a significant comeback. The recent slowdown in AI Builder stocks was driven by concerns about the slowing down of spending on new AI infrastructure. But this is not the case. Just this week, Masayoshi Son of SoftBank Group Corp. (SFTBY), the world's largest tech investor, pledged to invest $100 billion in the US over the next four years, with a significant portion likely to go towards creating new AI infrastructure. Amazon also announced an additional $10 billion investment to expand its data center infrastructure in Ohio. Meta Platforms Inc. (META) revealed that it is building a $10 billion AI data center, the largest it has ever constructed, in Louisiana. And right next door in Tennessee, Elon Musk and his xAI startup are building their own multibillion-dollar AI-focused supercomputer project.The AI infrastructure boom in the US is not waning; it is accelerating. This presents a compelling opportunity to purchase beaten-down AI Builder stocks, which are primed to rebound strongly as the market realizes that the AI Builder boom is far from over.We conducted a screen to identify top-notch AI stocks that have struggled recently. Names like Micron Technology Inc. (MU) emerged. MU is up almost 30% in 2024 but has declined 30% over the past six months. Qualcomm Inc. (QCOM) was also a standout, as it is down about 30% over the past six months. Arm Holdings plc (ARM) is in a similar situation, up almost 90% this year but down about 20% over the past six months. Nvidia and Texas Instruments Inc. (TXN) are also on our radar. Smart investors should consider these stocks for an AI Builder rebound in the first half of 2025.The "New Wave" of AI Is Here
We have fewer than 1,000 days until we witness a seismic shift in the global economy that will make the internet boom seem like a minor affair. We have named it "AI Day One." This is not just another fleeting tech trend; it is a fundamental transformation of our world that will generate unprecedented wealth for those with foresight and leave others in the dust.Imagine being able to predict which companies will dominate the AI landscape before Wall Street catches on. Now, you can. My InvestorPlace colleagues and I have identified a select group of "new wave" AI Applier stocks that are poised for explosive growth in the coming months. These are not your ordinary tech giants; they are the hidden gems of our AI-powered future.We recently convened for a special free broadcast to explain what "AI Day One" entails and to disclose how and why we selected this group of "new wave" AI Applier stocks for our newest portfolio. Do not be left behind in the greatest wealth transfer of our lifetime. Learn how to position yourself now, before it is too late.On the date of publication, Luke Lango did not hold (either directly or indirectly) any positions in the securities mentioned in this article.P.S. You can stay updated with Luke's latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.READ MORE