| DAILY ISSUE
Hello, Reader. Mark Twain once remarked, “The art of prophecy is very difficult, especially with respect to the future.” Echoing that perspective, the witty aphorist Mason Cooley observed, “To be fulfilled, prophecy needs lots of flexibility.” Although I wholeheartedly agree with both Twain and Cooley, future-gazing is as much a New Year’s tradition as making (and then breaking) resolutions. Every January, I, too, like to dust off my crystal ball and present a collection of forecasts and wild guesses about the coming year. Somewhat incredibly, many of these forecasts have landed squarely in the bull’s-eye. Take this prediction that I offered here at Smart Money last year. I prophesized that… AI will trigger a new “Golden Age” of drug discovery and development. This phenomenon will cause a record number of AI-generated therapies to enter clinical trials. And my prediction came true. AI-enabled drug development continued to gain momentum in 2024. Although hard numbers for all of last year are not yet available, leading medical research group Towards Healthcare believes total global investment in AI-enabled drug discovery and development topped $4 billion last year – or nearly 50% higher than 2023 levels. In the current year, AI-enabled drug development continues to expand the power and scope of biopharmaceutical innovation. A significant number of new clinical trials are already underway. AI-enabled drug development is a broad category that encompasses processes like target identification, drug design, predictive modeling, and clinical trial optimization. Because AI can accelerate and optimize each of these processes, it is becoming increasingly essential to the biopharmaceutical industry. Today, I’d like to offer a new prediction for 2025. Then, I’ll delve into a certainty: The arrival of artificial general intelligence, or AGI, is imminent. So, I’ll show you how you can prepare for that technology’s arrival this year. Now, let’s take a look my crystal ball… | Recommended Link | | | | Eric Fry here. I just delivered an urgent report from ground zero of the greatest technology project in human history. An invention so far beyond our current technology — even artificial intelligence — that some believe it will create millionaires overnight. Click here for the details. |  | | A "Magnificent" Prediction In my most recent Fry’s Investment Report monthly issue, I delivered my paid-up members five forecasts for 2025. Today, I’ll share one of those. (To get the rest, you’ll have to learn more about becoming a Fry's Investment Report subscriber.) For the year ahead, I predict that… The “Magnificent Seven” stocks will underperform the broad stock market. The chart below shows the rolling three-month performance of the Magnificent Seven stocks – Apple Inc. (AAPL), Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), Nvidia Corp. ( NVDA), Tesla Inc. (TSLA), Meta Platforms Inc. (META), and Microsoft Corp. (MSFT) – minus the rolling three-month performance of the other 493 stocks in the S&P 500 Index.  Whenever this line is above 0%, the Mag 7 stocks are outperforming the other 493 stocks in the S&P 500. Conversely, whenever this line is below 0%, the Mag 7 stocks are underperforming. As you can see on the right side of the chart, the Mag 7 rose significantly during the final months of 2024. But as 2025 proceeds, I expect the richly valued Mag 7 stocks to lose some of their luster. Two main factors will cause this relative weakness. The first is simply valuation. As a group, the Mag 7 stocks are trading for a princely 37 times earnings, which is 40% higher than the near-record valuation of the S&P 500. Although richly valued stocks can maintain their premium prices for a long time, they usually struggle to do so. All else being equal, these high valuations will create a headwind to additional share-price gains.  The second factor weighing on the Mag 7 stocks is the soaring cost of artificial intelligence leadership. During the last few years, the Mag 7 companies have been reaping the bounty of their past investments in product development. But now, with the arrival of AI, they must embark on a new era of massive investment. Collectively, the major tech companies are spending hundreds of billions of dollars to develop leading-edge AI capabilities. This monstrous investment imperative could stifle their profit growth and hinder free cash flow generation. As the chart below shows, the five leading “hyper-scaler” data center operators have invested an astounding $1.5 trillion during the last five years in research and development, plus property, plant, and equipment (i.e., data centers). And the pace of spending is increasing.  Forecasting AGI Now, this forecast comes with the humble admission that the future is inherently unknowable. What is knowable, though, is that AGI – when AI becomes capable superhuman intelligence – will soon be knocking on our doors. In fact, last year Elon Musk predicted we are just a year or two away from AGI, and my analysis suggests he might be right. Even more, the technology could very well be upon us this year. That’s why I started my 1,000 Days to AGI countdown on September 12, 2024. That was when OpenAI released a series of AI models designed to reason instead of recognize patterns. They work through problems step by step, similar to human reasoning. And I’m convinced 1,000 days is the far end of when we’ll achieve this milestone. Investors who are unprepared will miss the transformative opportunities that AGI will bring. However, those who position themselves correctly could witness the greatest moneymaking opportunity in human history – with the possibility to surpass even the Internet Revolution. I’ve identified several companies that are strategically positioned to capitalize on this coming wave during this current “pre-AGI” market, and I want to share them with you. You can click here to check out my free 1,000 Days to AGI special broadcast, where I discuss the implications of AGI’s imminent arrival… and how you can financially prepare yourself for it. Regards, | 
0 Response to "Smart Money: My Prediction for 2025 – and a Profit-Generating Certainty"
Post a Comment