Before I took off for the current trip to Europe, I logged into my Amazon Prime account to buy some lightweight polyester T-shirts, size 4XL. Not only are these ideal for long-distance hiking but they can be washed in a hotel sink and dried quickly when I am traveling too fast to use the house laundry.
The next morning when I logged into my laptop, my email account was flooded with ads for every kind of T-shirt in the world, from heavy-duty sports types FOR $100 to bargain basement $5 ones from China (although the Chinese ones were a little light on the 4X sizes).
That is Amazon’s AI at work. And you know what? It is getting smarter. And while the big fear among investors is that the US government will break up this retail giant for antitrust reasons, Amazon is integrating faster than ever. The impact on profits will be enormous.
My friend Jeff Bezos’ creation has a lot to work with. Amazon not only pioneered online retail. It subsequently invented the Kindle, an e-reader (click here where the John Thomas autobiography is for sale) Alexa, a smart speaker and, more consequentially, cloud-computing—Amazon Web Services has a 31% share of that $300bn market (full disclosure: Mad Hedge uses their service).
It also runs Prime Video, America’s fourth-most-watched video-streaming service (full disclosure: Mad Hedge is a Prime member). Its newish, high-margin advertising business is already the third largest in the world behind Alphabet (GOOGL) (Google’s parent company) and Meta (META) (Facebook’s).
Amazon also has a few moonshot projects of its own. One subsidiary, Zoox, is building self-driving cars. Another, Kuiper, is developing a fleet of communications satellites in low-Earth orbit, in competition with SpaceX Starlink (full disclosure: Mad Hedge is a Starlink user).
This year, Amazon’s websites will sell a staggering $554bn-worth of goods in America. That gives it a 42% share of American e-commerce, far beyond the 6% captured by Walmart (WMT), its nearest online competitor (and the country’s biggest retailer overall). The reward for all these efforts was a $2 trillion market capitalization in June and an all-time high share price of $203.
Amazon’s fourth decade looks poised to be an era of integration. The company has grown to the size that any needle-moving new investment is costly and high-risk. Andy Jassy, the former boss of AWS whom Bezos appointed as his successor as CEO in 2021, therefore appears keen to generate value by stitching the company’s existing businesses together more tightly.
Jeff, who I knew at Morgan Stanley, still retains a 9% stake after some hefty recent sales and a big say over strategy, seems to approve. This metamorphosis would make Amazon more similar to Apple (AAPL) and Microsoft (MSFT), two older big-tech rivals that have bundled and cross-sold their way to world domination in consumer devices and business software, respectively—and to $3trn valuations.
Retail and advertising appear to be the first to integrate. The thread running through the two businesses is Prime, Amazon’s $139 a-year subscription service, which has 300m-odd members around the world, providing shoppers with free delivery and access to Prime Video. Prime members like me spend twice as much on Amazon’s websites as non-members do and they tend to be logged in more often. Amazon also has intimate knowledge of their shopping behavior, which allows it to target ads more accurately.
Advertising is another great hope at Amazon. Advertisers are willing to pay handsomely for this service: analysts estimate that Amazon’s ads business enjoys operating margins of around a mind-blowing 40%, higher even than those of the cloud operation, not to mention the much less lucrative retail division.
Most of these ads, responsible for four-fifths of the company’s ad sales, are nestled among search results on its app or next to information about products, as with my above-mentioned T-shirts. But a growing share is coming from third-party websites and, most recently, from Prime Video. In January Amazon started showing commercials to viewers in America, Britain, Canada, and Germany.
Analysts reckon that video ads alone will boost Amazon’s ads sales by about 6% this year, adding $3bn to the top line. Given the ad operation’s fat margins, the impact on profit will be considerably larger.
To turn more Prime members into actual ad-watchers, Amazon is splurging on content. It recently signed a contract with Mr. Beast (??), a YouTube superstar, rumored to be worth $100m. It is trying to seal a deal in which it would pay $2bn a year for the rights to show National Basketball Association games on Prime Video. It is already reportedly spending $1bn annually to stream some National Football League (NFL) fixtures.
This hefty price tag is worth it, the company thinks, because popular sporting moments, such as “Thursday Night Football”, have turned out to be among the biggest sign-up days for Prime. Ads aired during sports events are some of the most lucrative in all of the ad business.
Analysts speculate that clever AWS software may also be assisting the retail operation’s 750,000 warehouse robots in sorting shoppers’ packages. And having a business as gigantic as Amazon’s retail arm as a captive customer gives AWS the confidence to scale up, helping spread costs.
The most important thread stitching Amazon’s two main businesses together is generative AI. Most rivals will struggle to match Amazon’s access to specialized AI hardware, which is in short supply but which it has in abundance thanks to long-standing commercial partnerships with companies like Nvidia (NVDA), which makes advanced AI semiconductors.
Amazon’s recent share-price rise was uninterrupted by a Fair Trade Commission lawsuit. But for every cloud customer that AWS loses to rivals such as Microsoft Azure or Google Cloud Platform, it could win one that is repelled by Microsoft’s and Google’s new businesses in their own increasingly tightly-knit empires.
It all looks like a giant, super-efficient machine to me which should justify at least a 50% gain in Amazon’s share price in the next year or two.
https://www.madhedgefundtrader.com/wp-content/uploads/2024/08/The-everything-firm.png580576april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2024-08-01 09:02:372024-08-01 10:14:35Why Amazon is the Most Undervalued AI Play Out There
The Nasdaq experiencing a big dip is in fact healthy for the tech sector long term.
Shaking out the weak hands is necessary a few times per year.
It doesn’t hurt that tech stocks boast the higher growth rates in the entire stock market.
The price action has suggested a winner-take-all mentality with winners like Nvidia and other big tech companies experiencing outsized gains.
Chip stocks have been recent victors while smaller software stocks have been pounded.
Just take a look at social media stock Pinterest (PINS) which is down over 12% on a weak forecast.
At the top end, Microsoft (MSFT) is the perennial flag bearer of cloud growth but this time it was different.
The stock sold off hard after earnings because the company missed cloud revenue expectations.
Cloud has been MSFTs bread and butter for years.
Even the CEO Satya Nadella came from the cloud division to grab the title of CEO.
Microsoft's overall cloud revenue came in at $36.8 billion, in line with expectations of $36.8 billion, but the company's Intelligent Cloud revenue, which includes its Azure services, fell short, coming in at $28.5 billion versus expectations of $28.7 billion.
While Microsoft's cloud business missed expectations, overall revenue still rose 21% year over year. Intelligent Cloud revenue, meanwhile, increased 19% year over year. What's more, Microsoft said AI services contributed 8 percentage points of growth to its Azure and other cloud services revenue, which increased by 29%.
The most consistent theme in this round of checks was the number of customers and partners that cited share gains by Microsoft resulting from its early lead on the AI front.
During Alphabet’s earnings call, CFO Ruth Porat said the company spent $13 billion on capital expenditures, up from $12 billion in the prior quarter, adding that the vast majority of that spending is going toward AI.
There are data points showing that growing the cloud is becoming something more similar to stealing rival clients from Google or Amazon.
That is a worrying sign because total addressable cloud revenue has been going up for a whole generation.
The cloud industry has never seen a scarcity mentality.
In the earnings rhetoric, the management talked as if growth is harder to come by in 2024.
I would be hard-pressed to find anyone who disagrees with that opinion.
The overall consensus starting to form is that these growing expenses related to AI won’t produce the blockbuster revenue projected so quickly.
The more likely case is that revenue from AI comes online in late 2025 or 2026 or maybe not at all.
The delay in the benefits of AI will mean shareholders pulling back temporarily and offer AI stocks a “prove it” period to show if they are legit or not.
Before winter, I do expect a consolidation phase in tech and in AI stocks that will set the stage for a Santa Claus rally.
MSFT stock is up over 200% in the past 5 years, and although this 11% or so dip in the past month is very unlike MSFT, this is a healthy and orderly dip.
I am still bullish MSFT in the long term.
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2024-07-31 14:02:382024-07-31 14:21:34Consolidation Time
We have a three-horse race underway in the stock market right now between Apple (AAPL), Microsoft (MSFT), and NVIDIA (NVDA). One day, one is the largest company in the world, another day a different company noses ahead.
And here’s the really good news: this race has no end. Sure, (NVDA) has far and away the most momentum and it should hit my long-term target of $1,400 this year, giving it a market capitalization of $3.44 trillion. (MSFT) and (AAPL) will have to stretch to make another 20% gain by year-end.
Who will really end this three-year race? You will, as the benefits of AI, hyper-accelerating technology, and deflation rains down upon you and your retirement portfolio.
Here is the reality of the situation. The Magnificent Seven has really shrunk to the Magnificent One: NVIDIA. (NVDA) alone has accounted for 32% of S&P 500 gains this year. There are now 400 ETFs where (NVDA) is the biggest holding, largely through share price appreciation. These dislocations in the market are grand. This will end in tears….but not yet.
Dow 240,000 here we come!
After six months of grief, pain, and suffering last week, my (TLT) LEAPS finally went into the money last week.
Remember the (TLT)?
On January 18, I bought the United States Treasury Bond Fund (TLT) January 17, 2025, $95-98 at-the-money vertical Bull Call spread LEAPS at $1.25 or best. On Friday, they nudged up to $1.35. But I kept averaging down with the $93-$96’s and the $90-$93’s which are now at a max profit.
We lost six months on this trade thanks to a hyper-conservative which is eternally fighting the last battle. A 9.2% peak certainly put the fear of God in them and they persist in thinking a return to higher inflation rates is just around the corner.
Markets, however, have a different view. They are now discounting a 25-basis point cut in September followed by another in December. That will easily take the (TLT) up to $100. This is why we go long-dated on LEAPS. There is plenty of room for error….lots of room, even room for the Fed’s error. If you wait long enough, everything goes up.
With THIS Fed fighting it seems to pay off. That is what happened when Jay Powell waited a full year until raising rates for a super-heated economy. He now risks tipping the US into recession by lowering rates too slowly, when virtually all data points are softening. I guess that’s what happens when you have a Political Science major as Fed governor.
And here is what the Fed is missing. AI is destroying jobs at a staggering rate, not just minimum wage ones but low-end programming ones as well. That’s what the 300,000 job losses over the last two years in Silicon Valley have been all about.
It’s unbelievable the rate at which AI is replacing real people in jobs. If you want a good example of that, I had to call Verizon (VZ) yesterday to buy an international plan, and I never even talked to a human once. They listed three international plans in a calm, even, convincing male voice, and I picked one.
Or go to McDonalds (MCD) where $500 machines are replacing $40,000 a year workers. This is going on everywhere at the same time at the fastest speed I have ever seen any new technology adopted. So buy stocks, that’s all I can say.
It is not just the (TLT) that is having a great month. The entire interest rate-sensitive sector has been on fire as well. My favorite cell phone tower REIT, Crown Castle International with its generous 6.28% dividend yield, has jumped 15%. Distressed lender Annaly Capital Management (NLY) with its spectacular 13.08% dividend, has appreciated by 11%.
So far in June, we are up +1.04%. My 2024 year-to-date performance is at +19.39%.The S&P 500 (SPY) is up +13.83%so far in 2024. My trailing one-year return reached +36.31%. That brings my 16-year total return to +696.02%.My average annualized return has recovered to +51.56%.
As the market reaches higher and higher, I continue to pare back risk in my portfolio. I stopped out of my near-money gold position (GLD) at close to breakeven because we were getting too close to the nearest strike price.
Some 63 of my 70 round trips were profitable in 2023. Some 29 of 38 trades have been profitable so far in 2024, and several of those losses were really break-even.
Fed Leaves Rates Unchanged at 5.25%-5.5% but reduces the cuts by March from three to one, citing an inflation rate that remains elevated. The projections were very hawkish, and the markets sold off on the news.
CPI Comes in Cool, unchanged MOM and 3.4% YOY. The May Nonfarm Payroll Report out Friday was an anomaly. It’s game on once again.
Europe Imposes Stiff Tariff on Chinese EVs, up to 38.1%. Daimler Benz, BMW, and Fiat have to be protected or they will go out of business.
The Gold Rush Will Continue through 2024, as much of Asia is still accumulating the yellow metal. Asia lacks the stock market we here in the US enjoy. A global monetary easing is at hand.
Broadcom (AVGO) Announces a 10:1 Split, and the shares explode to the upside. Earnings were also great. I actually predicted this in my newsletter last week and again at my Wednesday morning biweekly strategy webinar. The split takes place on July 15. Split fever continues. Buy (AVGO) on dips.
Apple (AAPL) Soars to New All-Time High, over $200 a share for the first time. However, it is now only the third largest company in the world, losing first place to (NVDA) and (MSFT). Analysts piled up the benefits of pitching AI to one billion preexisting customers. Just don’t tell Elon Musk.
Dollar Hits One Month High, on soaring interest rates spinning out from the super-hot May Nonfarm Payroll Report. This may be your last chance to sell at the highs. Never own a currency with falling interest rates. Just look at the Japanese yen.
Stock Buybacks Hit $242 Billion in Q1, but a new 1% tax may slow down the activity. The tax was passed as part of the Inflation Reduction Act in 2022 and is retroactive to January 1, 2023. (AAPL), (DIS), (CVX), (META), (GS), (WFC), and (NVDA) were the big buyers.
Home Equity Hits All-Time High at $17 Trillion according to CoreLogic. About 60% of homeowners have a mortgage. Their equity equals the home’s value minus outstanding debt. Total home equity for U.S. homeowners with and without a mortgage is $34 trillion. That is a lot of cash that could potentially end up in the stock market.
Home Prices to Keep Rising says Redfin CEO. While experts are forecasting more homes will be available, they said the boost in supply is not enough to solve affordability issues for buyers. Interest rates are expected to come down, but not by enough to counteract high prices.
Elon Musk Wins his $56 Billion Pay Package after a shareholder vote where retail investors came to his rescue. Institutional investors like CalPERS were overwhelmingly against it. It didn’t help that Elon moved Tesla to Texas. State pension funds always show a heavy bias in favor of local companies. Luck for California teachers includes (NVDA), (AAPL), (GOOGL), and (SMCI). (TSLA) rose 4% on the news.
The Gold Rush Will Continue through 2024, as much of Asia is still accumulating the yellow metal. Asia lacks the stock market we here in the US enjoy. A global monetary easing is at hand.
US Homes Sales Fall, down 1.7% month-over-month in May on a seasonally adjusted basis and dropped 2.9% from a year earlier. Median home sale price rose to a record high of $439,716, up 1.6% month-over-month and 5.1% year-over-year.
My Ten-Year View
When we come out the other side of the recession, we will be perfectly poised to launch into my new American Golden Age or the next Roaring Twenties. The economy decarbonizing and technology hyper accelerating, creating enormous investment opportunities. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
Dow 240,000 here we come!
On Monday, June 17, the New York Empire State Manufacturing Index is released.
On Tuesday, June 18 at 7:00 AM EST, Retail Sales are published.
On Wednesday, June 19, the first-ever Juneteenth holiday where the stock market is closed. Juneteenth celebrates the date when the slaves in Texas were freed in 1866, the last to do so.
On Thursday, June 20 at 8:30 AM, the Weekly Jobless Claims are announced. We also get Building Permits.
On Friday, June 21 at 8:30 AM, the Existing Home Sales are announced.
At 2:00 PM the Baker Hughes Rig Count is printed.
As for me, as I am about to embark on Cunard’s Queen Elisabeth from Vancouver Canada on the Mad Hedge Seminar at Sea, I thought I’d recall some memories from when I first visited there 54 years ago.
Upon graduation from high school in 1970, I received a plethora of scholarships, one of which was for the then astronomical sum of $300 in cash from the Arc Foundation, whoever they were.
By age 18, I had hitchhiked in every country in Europe and North Africa, more than 50. The frozen wasteland of the North and the Land of Jack London and the northern lights beckoned.
After all, it was only 4,000 miles away. How hard could it be? Besides, oil had just been discovered on the North Slope and there were stories of abundant high-paying jobs.
I started hitching to the Northwest, using my grandfather’s 1892 30-40 Krag & Jorgenson rifle to prop up my pack and keeping a Smith & Wesson .38 revolver in my coat pocket. Hitchhikers with firearms were common in those days and they always got rides. Drivers wanted the extra protection.
No trouble crossing the Canadian border either. I was just another hunter.
The Alcan Highway started in Dawson Creek, British Columbia, and was built by an all-black construction crew during the summer of 1942 to prevent the Japanese from invading Alaska. It had not yet been paved and was considered the great driving challenge in North America.
One 20-mile section of road was made out of coal, the only building material then available, and drivers turned black after transiting on a dusty day. I’ll never forget the scenery, vast mountains rising out of endless green forests, the color of the vegetation changing at every altitude.
The rain started almost immediately. The legendary size of the mosquitoes turned out to be true. Sometimes, it took a day to catch a ride. But the scenery was magnificent and pristine.
At one point a Grizzley bear approached me. I let loose a shot over his head at 100 yards and he just turned around and lumbered away. It was too beautiful to kill.
I passed through historic Dawson City in the Yukon, the terminus of the 1898 Gold Rush.There, abandoned steamboats lie rotting away on the banks, being reclaimed by nature. The movie theater was closed but years later was found to have hundreds of rare turn-of-the-century nitrate movie prints frozen in the basement, a true gold mine. Steven Spielberg paid for their restoration.
Eventually, I got a ride with a family returning to Anchorage hauling a big RV. I started out in the back of the truck in the rain, but when I came down with pneumonia, they were kind enough to let me move inside. Their kids sang “Raindrops keep falling on my head” the entire way, driving me nuts. In Anchorage they allowed me to camp out in their garage.
Once in Alaska, there were no jobs. The permits required to start the big pipeline project wouldn’t be granted for four more years. There were 10,000 unemployed.
The big event that year was the opening of the first McDonald’s in Alaska. To promote the event, the company said they would drop dollar bills from a helicopter. Thousands of homesick showed up and a riot broke out, causing the stand to burn down. It was rumored their burgers were made of much cheaper moose meat anyway.
I made it all the way to Fairbanks to catch my first sighting of the wispy green contrails of the northern lights, impressive indeed. Then began the long trip back.
I lucked out by catching an Alaska Airlines promotional truck headed for Seattle. That got me free ferry rides through the inside passage. The driver wanted the extra protection as well. The gaudy, polished cruise destinations of today were back then pretty rough ports inhabited by tough, deeply tanned commercial fishermen and loggers who were heavy drinkers and always short of money. Alcohol features large in the history of Alaska.
From Seattle, it was just a quick 24-hour hop down to LA. I still treasure this trip. The Alaska of 1970 no longer exists, as it is now overrun with summer tourists. It now has 27 McDonald’s stands.
And with runaway global warming the climate is starting to resemble that of California than the polar experience it once was. Permafrost frozen for thousands of years is melting, causing the buildings among them to sink back into the earth.
It was all part of life’s rich tapestry.
The Alcan Highway Midpoint
The Alaska-Yukon Border in 1970
Good Luck and Good Trading,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
https://www.madhedgefundtrader.com/wp-content/uploads/2021/08/alcan-yukon-border.png462476april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2024-06-17 09:02:192024-06-17 10:45:37The Market Outlook for the Week Ahead, or The Three-Horse Race
Apple (AAPL) has been on a one-way street to nowhere lately with their China business falling into the backstreet dumpster.
They had to do something before desperation took hold in the Cupertino headquarters.
It’s not like they could turn to Steve Jobs to figure this all out.
Tim Cook is an operations manager masquerading as the CEO and has little vision if any.
Announcing something AI was not a shocker as even legacy firms like Oracle and Dell had done the same with great success. But this isn’t data center stuff, the AI here will affect the Apple iPhone software.
Out the window goes privacy on your little iPhones – do people still even care about that?
Privacy was handed over to Sam Altman’s OpenAI.
Doing a deal like this opens up Pandora’s box and ensures that the Apple of the future will look a lot different than the one today.
Not everyone will like it, but that is tough. It is business.
The CEO of Apple, Tim Cook announced an unexpected and deep cooperation with the company OpenAI, which develops the chatbot ChatGPT, and the biggest loser has to be Microsoft.
MSFT usually doesn’t lose at its own game so this one is a bit of a surprise.
Apple has so far only flirted with the idea of its integration. The company surprised and took many people's breath away.
It is a paradox that the biggest investor in OpenAI is its rival Microsoft. The cooperation agreement took place behind closed doors to the dismay of Microsoft CEO Satya Nadella.
Thanks to artificial intelligence, Siri will be able to access all data stored in the user's phone and cloud through a secure channel.
Siri will no longer have a problem understanding the wider context of your question, connecting the answer with previous questions, or deciphering what you wanted to say if you accidentally mixed up the words.
CEO of OpenAI Altman now has fulfilled a longtime dream by striking a deal with Apple to use OpenAI’s conversational artificial intelligence in its products.
MSFT thought it had a big lead in AI over its peers and apparently, OpenAI, being the newest hottest thing in tech, has decided to sleep with everyone in bed instead of just picking one. MSFT has a right to be angry when they handed over $13 billion to OpenAI and that perceived lead in AI has evaporated.
It will be quite funny to see the software and the algorithms in these firms slowly merge into one product backed by the same AI company.
It screams of too many mouths to feed with just one nipple.
OpenAI has taken full advantage to entrench itself as the preeminent force at the forefront of technological modernity. They are the biggest winner here.
Right away, I wouldn’t say that Apple hit a home run even though the price action in their share price suggests so.
They are simply just boarding a train to uncertainty with the rest of big tech, and this maneuver looks highly defensive in nature.
Since Apple has stated they committing no money to the deal then it has to be coined as a win. It's $13 billion less spent and at a risk the software could turn clunky and unusable.
At that point, they could just terminate the relationship. This move was highly controversial inside of Apple headquarters, but management thought it was worth the risk.
Apple stock has most likely reached a short-term peak.
Lastly, I found it interesting that the Former head of the National Security Agency, retired Gen. Paul Nakasone has joined OpenAI which could mean that OpenAI will also be integrated into the Armed Forces. Apple won’t have much of a say in OpenAI going forward so we will see how it pans out.
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2024-06-14 14:02:512024-06-14 15:10:10On Board The AI Train To Uncertainty
Remember the last time you had to pop a pill that felt like a one-size-fits-all solution? I sure do. It was for a nagging cough, and while it did the trick, the side effects left me feeling like I'd been hit by a truck.
Turns out, Big Pharma is facing its own kind of side effects. They spend an average of $2.6 billion and over a decade to bring a new drug to market. That's like betting on a long shot at the Kentucky Derby, but with way worse odds.
But what if we could change the game entirely? What if drug discovery wouldn’t solely be about blindly mixing chemicals and hoping for the best.
Instead, picture a super-smart robot scientist, capable of reading millions of pages of medical research in seconds, understanding how different molecules interact, and even predicting which ones might be effective against a disease.
This AI-powered scientist could then design experiments to test those molecules, analyze the results, and even create new molecules from scratch, tailored to specific diseases and individual patients.
That's the promise of autonomous drug discovery.
While we've already seen robots and miniaturization speed up the drug discovery process, AI is taking it to the next level. I’m talking about AI agents running the entire show, from brainstorming biological theories to designing and running experiments, all with barely a human finger lift.
This isn't just about efficiency. It's a veritable gold mine of benefits: costs slashed, development times cut down, success rates skyrocketing, and a productivity boost that could revolutionize personalized medicine. And why does that matter?
Because it means treatments that are more effective, safer, and tailored to your unique genetic makeup, medical history, and lifestyle. Imagine popping a pill that's not just designed to treat your disease, but designed specifically for you. That's the kind of future autonomous drug discovery could deliver.
Imagine a world where your next prescription is fine-tuned to your genetic makeup, your medical history, your lifestyle. Sounds like bespoke tailoring, but for your health.
And this isn't just hype – it's backed by hard numbers. A recent study by McKinsey & Company found that AI-enabled drug discovery could potentially generate up to $50 billion in annual value by 2026.
The study also highlighted that AI could reduce the time required for drug discovery by up to 50%, while also improving the success rate of clinical trials.
These aren’t merely some abstract predictions either. In fact, some companies are already making waves in this new world of drug discovery.
Recursion Pharmaceuticals (RXRX), for example, is at the forefront of these innovations. They've developed a radical new drug discovery platform that combines advanced robotics, experimental biology, and machine learning to rapidly identify potential new treatments for a wide range of diseases.
Forget dusty labs and slow, painstaking research. Recursion's approach is like giving Sherlock Holmes a supercomputer to solve medical mysteries, and the results speak for themselves: over 2,000 novel biological relationships discovered and a mind-boggling 150 terabytes of relatable biological data generated.
That's the equivalent of roughly 30 million songs, all focused on cracking the code of human biology and disease.
Recursion isn't the only player here. A slew of innovative companies are riding the AI wave, reimagining the drug discovery landscape.
Schrödinger (SDGR) is turbocharging the process with AI and computational wizardry, using algorithms to predict how potential drugs will behave in the body before even stepping foot in a lab.
Relay Therapeutics (RLAY) is forging new paths by marrying cutting-edge computation with experimental techniques, focusing on how cancer cells move and change shape to develop targeted therapies.
Exscientia (EXAI), the AI-driven pharmatech company, is designing and discovering new drugs with unprecedented speed, while AbCellera Biologics (ABCL) is harnessing the power of AI and machine learning to decode the secrets of our immune systems, hunting for antibodies that could be developed into life-saving drugs. It’s basically like having a crack team of digital detectives scouring your immune system for clues to fight off diseases.
Meanwhile, BenevolentAI (AMS: BAI) is the top name when it comes to clinical-stage AI drug discovery, using a potent combination of AI, machine learning, and cutting-edge science to unravel the complexities of disease biology and unearth novel treatments. They're not simply content with throwing darts at a target. This company is using AI to pinpoint the bullseye.
But, this AI-powered revolution of the healthcare world isn't happening in a vacuum. It's being supercharged by a tag team of tech titans who are bringing their AI firepower to the table.
Think of it as the Avengers assembling to fight disease, but instead of superpowers, they're armed with algorithms and cloud computing.
Nvidia Corporation (NVDA), IBM Corporation (IBM), and Microsoft Corporation (MSFT) are leading the charge, providing the AI muscle needed to accelerate drug discovery.
Nvidia's Clara Discovery platform, IBM Watson Health, and Microsoft Azure's AI and machine learning services are all being harnessed to build, train, and deploy AI models for a wide range of applications in the biotech and healthcare sectors. It's like having Tony Stark, Bruce Banner, and Thor all working together to create the next medical breakthrough.
And this isn't some wishful thinking. The use of AI in biopharma R&D is projected to skyrocket, growing at a compound annual growth rate of 30% to 40% over the next five years.
Plus, the impact could be huge: AI could potentially boost clinical trial efficiency by 15% to 20% and slash the overall cost of drug development by 10% to 15%. Talk about a win-win situation.
All in all, it’s clear that this AI drug discovery thing isn't just a fad. It's a full-blown revolution that's shaking up the healthcare world as we know it. And while it's still in the early innings, it would be wise to keep a close eye on it. I'm not saying you should throw all your money in right this second, but seriously, put the companies above on your radar.
These are the trailblazers leading the charge into the future of personalized medicine. Who knows, they might just be the ticket to a healthier portfolio—and a healthier you.
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2024-06-04 12:00:562024-06-04 12:21:21From Petri Dish To Personalized Prescriptions
(The Mad June traders & Investors Summit is ON!)
(THE BIGGEST “TELL” IN THE MARKET RIGHT NOW),
(GOOGL), (FRC), (PINS), (WORK), (UBER),
(ADSK), (WDAY), (SNE), (NVDA), (MSFT)
There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.
