Where the Next A.I. Stock Winners Hide

By TradeSmith Research Team

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This Industry Could Produce the Biggest AI Stock Winners

By Luke Lango, Senior Investment Analyst, Early Stage Investor

Believe it or not, artificial intelligence (A.I.) is becoming as influential as the internet was in the 1990s, promising major economic impacts.

The “smart money” is putting significant investment behind myriad A.I. startups, which further fuels the comparisons to the Dot-Com Boom. Just take a look at the trajectory of internet stocks in the ’90s:

Much like the internet did for efficiency and automation, A.I. is set to transform shopping, work, and travel, among many other industries.

The biggest differentiator between these two eras is that the A.I. Boom is unfolding much faster.

As a result, the only investors making money right now are those who are invested in A.I. stocks. For retail investors, this is your golden ticket to potentially life-changing wealth.

And there’s one industry in particular that is in for a major A.I.-related shakeup…

The Biggest Opportunity in A.I.

For the past few months, most A.I. headlines grabbing Wall Street’s attention have been centered around companies like Nvidia (NVDA) and Microsoft (MSFT). But the biggest A.I. stock boom is happening in an entirely different sector. And it’s going unnoticed by the mainstream media.

I’m talking about biotech stocks.

In about three months, the SPDR S&P Biotech ETF (XBI) has soared more than 35% from its October 2023 lows.

Why? A.I.

The application of A.I. in biology holds the potential to unlock enormous economic value for one simple reason — data.

The more data, the better the A.I.

It’s that simple.

And when it comes to the human body, there is no dearth of quality data. In fact, there is more high-quality data than anywhere else on Earth.

Humans — like computers — are really nothing more than a bunch of data strung together.

At their core, computers are just a bunch of 1s and 0s coded in sequence, with each number corresponding to a certain action for the computer to perform. Humans, similarly, are a bunch of As, Gs, Cs, and Ts strung together — or the four base types found in human DNA molecules — with each determining a person’s characteristics, traits, and even actions.

Apply A.I. to all that data, and you will change the world.

The A.I. Revolution Applied to Medicine

The human body is the greatest mystery of the modern world. A.I. has the potential to solve this mystery and, by doing so, address numerous issues that affect all humans.

Consider the following: Developing a new, successful drug typically requires about $900 million and 13.5 years.

The drug development process is so costly and time-consuming that companies cannot afford to advance many drugs. This results in a significant shortage of drug candidates and programs, despite the vast possibilities presented by human biological data.

However, A.I. could significantly reduce the time and cost of this process.

The search for new drugs takes a long time because the universe of biological data is enormous. Scientists must exert considerable effort to sift through the data, identify the root causes of diseases, and develop compounds to counteract those diseases.

A.I. has the capability to automate this entire process. It can map genetic data, pinpoint mutations, and conduct simulations to discover the appropriate compounds to counteract those mutations, all with near-instantaneous speed.

Researchers could use A.I. to identify new drug candidates much more quickly than is currently possible.

This is already occurring.

Last year, the Japanese pharmaceutical company Takeda Pharmaceutical (TAK) acquired an experimental psoriasis drug for $4 billion — a drug that was developed in just six months with the aid of A.I.

Takeda is not the only company making strides in this area.

Other pharmaceutical giants are actively employing A.I. technology for drug discovery.

The era of A.I.-powered drug discovery begins now.

The Final Word

Research firm Deep Pharma Intelligence estimates that investments in the field of AI-powered drug discovery have tripled over the past four years to nearly $25 billion. Morgan Stanley believes this tech will lead to an additional 50 novel therapies being brought to market over the next decade, with annual sales in excess of $50 billion.

In other words, a $50 billion A.I. drug discovery revolution starts now.

Is your portfolio positioned for it?

If not, you are on the wrong side of the A.I. Boom, and you will be stuck on the losing side, potentially forever.

Revolutionary approaches to drug discovery in healthcare are just the beginning…

A recent breakthrough from OpenAI is propelling us toward the realm of artificial general intelligence (AGI), which marks the start of what I am calling the “A.I. Endgame.”

This pivotal shift presents a window of opportunity that savvy investors cannot afford to miss. To get ahead of this upcoming endgame, it is imperative to act swiftly—before Feb. 29.

Position yourself at the forefront of this wave to capitalize on the explosive opportunities that lie ahead.

Exciting times ahead!

Luke Lango
Senior Investment Analyst, Early Stage Investor