A Clash of AI Narratives

Which should you believe? [Total Wealth] BROUGHT TO YOU BY MANWARD PRESS The Tech Sector Selloff Is All About the Money [Shah Gilani] Shah Gilani Chief Investment Strategist Imagine a force so powerful it could reshape our understanding of technology, business, and perhaps life itself. That force emerged in late 2023: AI. It has been THE narrative guiding the markets since. But as with any compelling story, there's always another layer waiting to be revealed. The initial AI boom has given way to a more nuanced - and potentially concerning - secondary narrative. Here's what it means for investors and the tech industry at large. SPONSORED [Amazon's $794M Bombshell: Nvidia's Secret Partner Revealed]( [Seattle Spheres on May 2018]( Amazon has quietly poured $144 million into a secretive AI chip company, and committed to buying a staggering $650 million of their product. Why? Because this obscure startup holds the key to unleashing the full potential of Nvidia's revolutionary Blackwell chip. [Discover the company at the heart of the AI arms race.]( A Groundbreaking Force AI emerged in late 2023 as a groundbreaking force... and it has since driven an unprecedented tech-driven rally from November 2023 to today. That's the power of a good narrative... the headline mega-narrative I'm calling "The AI Narrative." Since ChatGPT's launch in late 2022, it has captivated the imagination of investors, technologists, and corporate executives. This surge in enthusiasm has done three things... - Driven tech stocks and chipmakers to new heights - Placed a spotlight on the strategic investments of major tech companies in AI infrastructure - Signaled a new era of technological dominance and economic transformation. The market quickly recognized the potential of generative AI... from enhancing customer service to automating complex workflows... and so much more. That sent certain tech stocks soaring... - Hardware manufacturers - Network providers - Cloud companies - Chipmakers - And data center operators. And the big tech firms made major commitments to bolster their AI capabilities. Big Spenders They announced plans to dramatically increase capital expenditures (or capex). Alphabet alone projected an increase to $48 billion on mostly on AI-related infrastructure. The spending is a strategic shift toward building robust AI data centers. These capex investments are aimed at enhancing AI offerings and securing a competitive edge in the burgeoning market for AI-powered solutions. Combined, the spending by tech giants like Alphabet, Microsoft, Amazon, and Meta is estimated to reach a staggering $104 billion in 2024, according to New Street Research. This scale of investment speaks volumes about the perceived importance of AI technology in maintaining and expanding technological leadership. But now a new narrative has emerged on top of "The AI Narrative," which has sparked investor concern. SPONSORED [Nvidia's Secret Partner... This Is The New AI Chip Powerhouse]( [Chatbot conversation]( I bet you've never heard of it... but this newly public company is set to become key to Nvidia's seat on the AI throne. And for now... you can get in while it's still cheap. [Details Here!]( Uncertain Payoff This new narrative is the fear that the massive spending by big tech companies - in fact, all tech-related companies and industries chasing "The AI Narrative" - will have two big consequences... The spending could weigh down earnings of some companies... And sink the earnings of others that won't be able to translate their heavy investments into profits. The stock market's reaction to this new narrative has been swift and significant. The big tech companies that have powered the market higher on "The AI Narrative" have sold off. The Nasdaq fell by 4% the day after Alphabet's earnings call, marking the biggest one-day drop since October 2022. Such volatility reflects the market's sensitivity to the big financial commitments involved and the uncertain payoff timeline of AI investments. In other words, the new AI narrative was making its presence felt. And its presence is widespread. Beyond the tech giants, a sprawling ecosystem of suppliers - from chipmakers like Nvidia to server manufacturers and even power utilities - have reaped the benefits of "The AI Narrative." The demand across the AI supply chain has led to a huge increase in capital expenditure relative to sales. It's evidence of a robust industry-wide commitment to scaling AI capacities. But this rapid expansion has not been without its challenges. The heavy reliance on companies like Nvidia has posed risks of supply bottlenecks. And the massive power requirements for AI data centers raises practical and environmental concerns. Plus, the surge in market expectations - reflected in rising P/E ratios - suggests that any failure to meet those expectations could lead to market corrections. What we're witnessing right now is a clash of narratives. "The AI Narrative" is being challenged by a new, more cautious narrative. So, what's an investor to do? Should you trust "The AI Narrative"... or take profits because the new narrative is making headlines? Here's where I stand... SPONSORED [The David to Nvidia's Goliath: Tiny Startup Solving AI's Biggest Challenge]( [CPU concept]( While Nvidia grabs the headlines, a little-known company is quietly reshaping the AI landscape. Their cutting-edge technology is tackling the biggest bottleneck in AI adoption, attracting customers like Intel, AMD, Microsoft, and more. As the AI boom accelerates, this tiny startup could be the ultimate winner. [Get in early on the AI revolution's best-kept secret.]( The Future Is Clear The strategic AI investments made today will have long-lasting effects on the tech landscape. The fundamental shift in how companies invest in and use AI will have a huge impact on operational efficiencies and competitive dynamics. And the market will continue to experience volatility, thanks to ongoing adjustments and alignments within the tech industry. But fundamentals rule in the end. "The AI Narrative" is not just about the technological capabilities of AI... but also about a strategic shift of the tech industry toward an "everything AI" future. Suffice to say... I remain bullish. For investors and companies alike, the key is to be optimistic yet exercise caution. Follow the narrative... but use fundamentals to find the strongest players that are positioned to capitalize on the AI revolution's full potential. That potential will be owned by the companies investing the most in AI now. Cheers, Shah P.S. The biggest winner (so far) of "The AI Narrative" has been Nvidia, up 90% year to date despite the recent tech pullback. But its success wouldn't be possible without what I'm calling "[Nvidia's Secret Partner](... a little-known AI startup that could dominate the potential $25.6 trillion per year AI market. Get the full story now [right here]( before this company becomes a household name. Want more content like this? [YES]( [NO]( Shah Gilani Shah Gilani is the Chief Investment Strategist of Manward Press. Shah is a sought-after market commentator... a former hedge fund manager... and a veteran of the Chicago Board Options Exchange. He ran the futures and options division at the largest retail bank in Britain... and called the implosion of U.S. financial markets (AND the mega bull run that followed). Now at the helm of Manward, Shah is focused tightly on one goal: to do his part to make subscribers wealthier, happier and freer. You are receiving this email because you subscribed to Total Wealth. To unsubscribe from Total Wealth, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here](mailto:mailbag@manwardpress.com). Please do not reply to this email as it goes to an unmonitored inbox. To cancel by mail or for any other subscription issues, write us at: Manward Press | Attn: Member Services | [14 West Mount Vernon Place | Baltimore, MD 21201](#) North America: [1.800.682.5210](#) | International: [+1.443.353.4263](#) [Website]( | [Privacy Policy]( Keep the emails you value from falling into your spam folder. [Whitelist Total Wealth](. © 2024 Manward Press, LLC | All Rights Reserved Nothing published by Manward Press, LLC should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed personalized investment advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after publication before trading on a recommendation. Any investments recommended by Manward Press, LLC should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Manward Press, LLC, 14 West Mount Vernon Place, Baltimore, MD 21201.