By Graham Summers, MBA | Chief Market Strategist
Mark Zuckerberg is getting frustrated.
As I noted yesterday, Apple (AAPL) has dropped out of the AI race. This means that Microsoft/Open AI, Meta, Alphabet and xAI are now competing for the top slot in the development of AI networks/ learning models. And as leadership at MSFT and META have made clear, this is a “winner takes all” situation, which is why these companies are burning through hundreds of billions of dollars as they build out their AI networks in a bid to emerge as THE market leader.
If you believe this story has played out, you’re mistaken.
Mark Zuckerberg is so displeased with META’s progress in the AI race that he’s allocating nearly $15 billion to partner with a start-up Scale AI to develop a superintelligence lab. Superintelligence is the concept of an AI-model that knows more than humanity’s collective intelligence. And Zuckerberg has deemed this project so critical to META’s future that he is personally hiring the people involved in the project, offering compensation packages of seven to NINE figures.
What are the implications for investors?
The AI race is not over by any stretch of the imagination. Sure, companies like Nvidia (NVDA) and Meta (META) may have seen their share prices trade sideways for the last few months, but that is normal price action after a bull run like the one AI companies experienced from 2022-2024. And assuming that this means the AI revolution is over is a BIG mistake.
See for yourself.
Nvidia (NVDA): this chart is NOT bearish by any means. NVDA shares are on the verge of breaking out of a 14-month consolidation pattern. Does anyone really think NVDA shares are about to collapse when demand for its hardware will be increasing dramatically as AI enters its next phase of development (physical AI/ superintelligence)?
Meta (META) shares are roaring higher after a weak start to 2025. It’s rarely a good idea to bet against Mark Zuckerberg, especially given his new aggressive push to catch up in the AI-race. The man is willing to throw his entire company behind a project if it’s a “winner takes all” situation like the AI race. Again, this is a NOT a bearish stock setup by any stretch of the imagination.
Having said that, it’s worth noting that both NVDA and META are already multi-TRILLION dollar companies. Are they really capable of growing exponentially from here? Is the monetary potential for AI really worth adding another trillion dollars in market capitalization for either company?
I don’t have an answer to that.
What is clear is that there are VERY deep pockets looking to acquire/ invest in smaller, rapidly growing players in the AI space (again, Meta is about to allocate $15 BILLION to a single deal). This means that investors have the potential to lock in extraordinary gains as Big Tech continues to be on a buying spree in its hunt for growth and competitive advantages.
Put simply, there is still a LOT of money to be made from investing in the AI space. Which is why subscribers of our elite stock picking service are putting capital to work in AI opportunities that have truly massive upside potential.
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Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
