The Profit Column: The “Keep it Simple” A.I. Trade of 2024
Listen to this post
With large-cap stocks, we should expect slow, steady, dependable gains. Yes, even in good times.
But Jason Bodner is not most investors.
He doesn’t trade the way most trade. He doesn’t think the way most think. And he designed quantitative tools that even the most experienced Wall Streeters wouldn’t know how to build.
You see, Jason has deliberately chosen not to cater to the whims of the Street… and instead works to enrich the lives of everyday investors like you and me.
He does it with a sly and undeniably effective method – using a proprietary backdoor that can see what the world’s top moneymakers are collectively doing with their funds… And using it to pounce when the time is right.
That’s how you make gains in a single month that rival the return of the S&P 500 for the entire year. And readers of Jason’s newest research service, the TradeSmith Investment Report, got to enjoy that win to close out December.
As soon as I heard how TradeSmith Investment Report was off to such a rousing start, I got him on the horn for a quick chat on how he came to recommend this stock for his subscribers.
Today, we’ll discuss the ticker symbol of the stock that made a big wave in the last days of 2023, and share what he has cooking for 2024.
The Profit Column: Keeping the 2024 A.I. Trade Simple with Jason BodnerMichael Salvatore, Editor, TradeSmith Daily: Jason, thanks so much for joining this week’s Profit Column.
I’ll act just as you did when you began writing TradeSmith Investment Report and cut straight to the chase…
How in the world, after a year where semiconductor stocks blew the lid off the market, did you manage to rake in a 23% gain in a single month on one of the largest semi stocks there is — Advanced Micro Devices (AMD)?
Jason Bodner, Editor, TradeSmith Investment Report: First of all, thank you for having me, Michael.
And second of all… the answer might disappoint you.
But I did it by keeping things simple.
I’ve had the most success as an investor by simply buying high-quality stocks, participating in overwhelmingly bullish trends, at opportunistic moments. Life’s easy when you stick to a strategy like this.
It’s even easier when you have the greatest force in market history backing you up — the flow of Big Money.
As I sat down to write the December issue, it didn’t take me long to know what I was going to recommend. AMD was at the top of my watchlist from a fundamental and technical perspective. The Big Money was the next checkbox.
But it was the sweeping trend — a growth revolution in semiconductors — that initially pulled me in.
AMD is tightly woven into the most promising technological breakthrough of our time: artificial intelligence. It will be important to this trend, along with other key technological trends, for a long time to come.
Michael: A lot to unpack there… so let’s work backwards a bit. You mentioned the story of AMD. Tell me more about that.
Jason: AMD is often cast in the shadow of its much larger competitor, Nvidia (NVDA). They’re in the same business, but AMD is less than a fifth the size.
They also come from familiar origins. Their founders both trace back to a little-known company called Fairchild Semiconductor. That company was founded in 1957 by a group of eight brilliant young minds and leading scientists at one of the earliest semiconductor companies, Shockley Semiconductor Laboratory, before they defected to form Fairchild.
Shockley didn’t survive the shakeup, but those eight scientists went on to form the bedrock for U.S. semiconductor manufacturing. Fairchild’s top talent eventually founded Intel (INTC), Nvidia, and AMD.
That’s a bit of the history, but what’s much more important is where AMD is today.
AMD, like a lot of tech companies, is front and center in the A.I. arms race. It is, as I put it to my subscribers, all in on A.I.
And in fact, despite the difference in market cap, AMD boasts best-in-class A.I. graphics processing units (GPU) performance and video streaming GPU performance in certain categories — above Nvidia.
So we have a relatively smaller semiconductor company that is making great progress on A.I., yet hasn’t yet grown as much as its main rival… that’s immediately attractive to me.
Michael: Rightfully… Especially when the fundamentals, technicals, and Big Money backing line up as well as they do.
Tell us about that.
Jason: Regular readers ought to know that I built a proprietary rating system that assigns a simple number rating to every stock. I call it the Quantum Score, and it’s determined by the company’s fundamentals, technicals, and Big Money inflows.
If a stock rates between a 70 and an 85, that’s a “sweet spot” where you want to buy. It indicates a stock is hot, but not too hot that it presents more risk than reward.
When we recommended it, AMD’s Quantum Score was a nearly perfect 82.8, at the upper end of our target buy zone. That’s where we want to buy.
The fundamentals were equally strong at 79.2. That’s in part because annual revenue and gross profit more than doubled from 2020 to 2022.
The technicals rated the highest, 85.3. Price action has been strong, as shares rallied in November following the company’s earnings report and the overall market turning higher. AMD beat on the bottom line and forecast higher-than-expected revenue for its A.I. data-center chips.
And when it comes to Big Money inflows, AMD has been a magnet…
These signals come from my proprietary market scanner, which shows me the telltale sign of a large amount of money pouring into a stock — so large, it could only come from one of the top institutions on Wall Street.
These institutions are incredibly well-connected, with resources most people can’t even fully comprehend. When they make a big move, we have to pay attention.
Michael: As a longtime owner of AMD myself, this is exactly what I was hoping to hear. I can see it’s been getting Big Money buy signals since all the way back in February… even before the A.I. trade really took off.
Now, I want to circle back to something you mentioned earlier on — a couple key technological trends that AMD is also working toward. What can you share about that?
Jason: I don’t want to give away the whole TradeSmith Investment Report playbook here. It would be a disservice to my subscribers.
But I will say this… and your readers should stick this one in their pockets for the coming years.
Quantum computing has been a very quiet, under-the-radar tech trend for some time now. It’s a whole new method of computing that’s just now starting to manifest in high-tech hardware.
I think, down the road, quantum computing could become just as big of an investment trend as A.I., if not even bigger.
Quantum is what I call the “second leg” of a three-legged technological stool. The third leg is something I’ll save for my subscribers, but I can tell you it’s intimately tied to both A.I. and quantum computing… and it’s an area we cover with another of our portfolio picks… which happens to be our biggest winner at the moment.
Michael: Fascinating stuff, Jason…
I appreciate how you’re able to boil down these high-tech concepts into something immediately accessible.
So, what do we have to look forward to in TradeSmith Investment Report?
Jason: Michael, we’re so fortunate to live in a time of mind-blowing innovation and growth. There’s so much in the works that’s set to change our lives and provide incredible opportunities for investors — everything from A.I., to robotics, to space tourism, and everything in between.
When you invest in the highest-quality companies leading the way in these transformative trends, you stand the best chance of making a lot of money. And that’s exactly what we’re looking forward to in TradeSmith Investment Report.
Semiconductors and quantum computing are just two trends out of dozens — all of them highly investable. And even here we’re seeing incredible innovation. One stock I just recommended is on the bleeding edge of semiconductors that push past what were previously the physical limits of these devices, so that’s incredibly exciting.
Michael: I’m gonna go check that one out right now… I love geeking out about this stuff. Thanks for taking the time to chat today, Jason.
Jason: Always a pleasure, Michael. Talk soon.
I stumbled across something incredible while doing research for this interview. Take a look at this:
Almost 94% of Jason’s recommendations are in the “Strong Bullish” camp. The remainder fall under “Bullish.”
The BQS considers a number of fundamental and technical factors to grade stocks. The higher the score, the better that stock is set to perform.
Suffice to say, if you’re looking for a group of high-potential growth stocks, TradeSmith Investment Report is a must-read. And as a Platinum subscriber, you already have access.
Go right here to check out the latest research.
To your health and wealth,
Editor, TradeSmith Daily