Don't Expect a Q4 Breakout from this AI Upstart

Cashing in on phase 2 of the AI mega trend Published By Money & Markets, LLC. October 09, 2024 Published By Money & Markets, LLC. October 09, 2024 [Turn Your Images On] [Turn Your Images On] From The Desk of [Matt Clark, CMSA®]( Chief Research Analyst, [Money & Markets Daily]( Don't Expect a Q4 Breakout from this AI Upstart Money & Markets Daily, If you were starting to think the artificial intelligence (AI) mega trend was losing its luster, then think again: [Turn Your Images On] The chart above shows the number of sentences where AI was mentioned in quarterly earnings reports through Q1 2024. As you can see, the average earnings call now involves at least two mentions of AI. Since ChatGPT first launched (the dotted red line above), investor interest in AI has skyrocketed. So executives across the board are now eager to mention their latest AI initiatives, whether they’re developing cutting-edge software or just upgrading their factory automation. As we can see in the chart, AI is now a hotter topic than ever for the financial “Masters of the Universe.” The biggest winners of this emerging mega trend have so far been those tech stocks directly connected to developing AI hardware and software, including: - Nvidia Corp. (NVDA) — +145%. - Alphabet Inc. (GOOGL) — +31%. - Meta Platforms (META) — +33%. - Advanced Micro Devices (AMD) — +15%. Meanwhile, the returns of the S&P 500 were around 18%. But with the biggest gains for “Magnificent Seven” tech stocks are now in the rearview, a new generation of AI stocks is set to take over… --------------------------------------------------------------- [Turn Your Images On]( From our Partners at Paradigm Press. [James Altucher: THIS is my top AI investment pick]( I’ve been called a “genius investor” by my fans… And an “eccentric millionaire” by some others because I make big predictions that [tend to come true](. Today, I’m making my boldest prediction ever. To show you I’m serious about helping you get in on this opportunity, I’m giving away one of my top 5 AI 2.0 stock picks — free. [See my top 5 picks here.]( But hurry before the wealth window closes October 9. --------------------------------------------------------------- AI’s “Left Behind” Stocks Now on the Launchpad? The stock I’m going to tell you about today is one I first covered in July 2023 and have been following closely ever since. In that first article, I explained how Big Tech companies like Microsoft Corp. (Nasdaq: MSFT) and Google parent Alphabet Inc. (Nasdaq: GOOGL) were pumping billions into AI and creating huge opportunities in the market: [Turn Your Images On] Estimates suggest the global AI market size will go from $227.5 billion this year to $1.5 trillion by 2030 — a 599% jump in six years. At the time, I suggested not taking out a second mortgage on your home to pour into AI stocks. The reason is that, like cryptocurrencies or any other emerging technology, there will inevitably be far more losers than winners over the long-term. I used Adam’s Green Zone Power Ratings system and found one AI-related stock that was underperforming. Interestingly enough, that stock is still underperforming... This AI Stock Can’t Break Through The stock I found was Upstart Holdings Inc. (Nasdaq: UPST). Upstart uses a cloud-based AI platform to match consumers looking for loans with banks. It uses AI models to reduce lending risk by factoring in 1,500 different variables, ranging from credit experience to bank account transactions. When I wrote my initial article, UPST earned a “High-Risk” 2 out of 100 rating on Adam’s system… meaning it would significantly underperform the market over the next 12 months. [Turn Your Images On] Since my essay, UPST’s performance has been nearly flat compared to the S&P 500’s 30% rise. In fact, the broader index has more than doubled the return of UPST over that time. Its current rating isn’t that great either: [Turn Your Images On] UPST rates are in red for five of the six factors that make up the Green Zone Power Ratings system. Its 91 on Momentum should be looked at with caution, considering its fundamental ratings don’t support a sustained uptrend. On Value, UPST doesn’t register a positive price-to-earnings or price-to-cash flow ratio. While Upstart has a strong gross margin, its net and operating margins are both in the red. The company has a one-year sales growth rate of -39% and an earnings growth rate of -118%. None of those numbers spell good news for the immediate future of UPST. So, while AI continues to be a hot topic in the market, it’s important to understand that not all stocks in the space are poised to be winners. This is one reason why it’s important to use Adam’s Green Zone Power Ratings system to weed out stocks in strong sectors that don’t quite pass muster as potential investments. Until next time… Safe trading, [Matt Clark, CMSA®]( Chief Research Analyst, [Money & Markets Daily]( --------------------------------------------------------------- From our Partners at Banyan Hill Publishing. [TSLA To Trigger $28 Trillion AI Shock 10/10/2024]( The most disruptive AI launch of our lifetime has been scheduled for Thursday, October 10.  Tesla is scheduled to reveal its highly anticipated robotaxi that day at an event in Los Angeles, California…  And there is a tiny $1 stock with deep Tesla ties that has developed a critical piece of technology that’s protected by patent application No. 11,609,329… If Elon Musk mentions the name of this tiny company from the stage Thursday October 10… there’s no saying how high its stock could go. [Click here to get the details BEFORE 10/10.]( --------------------------------------------------------------- --------------------------------------------------------------- [Turn Your Images On]( Privacy Policy The Money & Markets, 702 Cathedral Street, Baltimore, MD 21201. To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. 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Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Money & Markets permits editors of a publication to recommend a security to subscribers that they own themselves. However, in no circumstance may an editor sell a security before our subscribers have a fair opportunity to exit. Any exit after a buy recommendation is made and prior to issuing a sell notification is forbidden. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. (c) 2024 Money & Markets, LLC. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Money & Markets. 702 Cathedral Street, Baltimore, MD 21201. (TEL: 800-684-8471) Remove your email from this list: [Click here to Unsubscribe](