Editor’s Note: Before we dive into today’s Smart Money, I want to thank everyone who joined us yesterday at the The Next $1 Trillion AI Stock strategy session.
During the event, we talked about where the next big application of AI is moving… and what companies will lead the way. We also discussed an AI accelerator strategy that could help you make up to 40 years of Nvidia gains in months.
If you missed it, you can find the replay of the event here.
Hello, Reader.
In the PC industry, a major “upgrade cycle” is just getting underway.
In previous PC upgrade cycles, big businesses and other enterprises simply replaced their aging computers with slightly more powerful new ones. During this cycle, however, office workers are going to see their old machines replaced by an entirely new generation of processing hardware.
The AI PC.
That’s correct: We’ll all soon be getting “artificial intelligence personal computers.”
This week, for example, Microsoft Corp. (MSFT) announced a new class of AI-imbued PCs that will feature “Windows Recall,” which will give Copilot (Microsoft’s AI chatbot) a photogenic memory of anything “you’ve ever seen or done” on the AI PC’s screen.
Advanced? Yes. Invasive? Well, the tech giant assures that it is not. Microsoft promises users the option to filter out activity they don’t want tracked by Windows Recall.
“We’re entering this new era where computers not only understand us, but can actually anticipate what we want and our intent,” Microsoft CEO Satya Nadella says.
The early part of this upgrade cycle from legacy PCs to AI PCs already is producing a windfall for companies like Dell Technologies Inc. (DELL) that have access to AI chips. Dell primarily uses chips from Nvidia Corp. (NVDA).
However, second-to-market players should also benefit from the PC upgrade cycle, as their product offerings enter the marketplace and as the AI PC boom really gains traction.
So, in today’s Smart Money, let’s take a look at one of those players…
The Intel on INTC
Like Dell, Intel Corp. (INTC) is also in a prime position to benefit from the AI PC upgrade cycle.
Intel has been quietly reestablishing its process leadership… and the new AI PC upgrade cycle will shine a light on its progress in this area.
To provide just one example of Intel’s technological renaissance, the company’s Gaudi 2 accelerator was 55% faster in a benchmark test of AI training, compared to the Nvidia A100 and H100 chips. Intel’s upcoming Gaudi 3 will be better still.
As AI PC sales gain momentum, and Intel’s pricey foundry projects pivot from burning cash to generating it, the company’s earnings could skyrocket. Based on current long-term earnings estimates, the company will book a profit of about $1 a share this year, then jump to $1.90 next year, $2.50 in 2026, and $3.35 in 2027.
If Intel comes anywhere close to producing that earnings trajectory, its share price could double easily… or deliver even larger gains. Success is not guaranteed, of course, but I expect the stock to reward patient investors.
However, as we discussed at last night’s The Next $1 Trillion AI Stock, you don’t need patience with my AI accelerator strategy…
The next phase of the AI boom is coming, and it’s revolutionizing more than just the PC industry. With my AI accelerator strategy, you could make up to 40 years of Nvidia gains in months, as the AI Revolution transforms this $13.1 trillion industry.
To learn more about this strategy – and to watch a replay of last night’s event – click here.
Regards,
Eric Fry
