The wild west of the data wars is spawning into an all-out, gun slinging shoot out with a winner takes all mentality.

This slug fest is reminiscent of the unregulated 19^th century American oil barons whose clout and complete control of the supply of oil fueled the industrial revolution that drove America's economy to the top of the global food chain.

Yes, data has become the oil of the 21^st century. It is the oxygen of the next leg of the Internet revolution.

And there is one man moving early to stake out the premium real estate of our futures: Softbank's Masayoshi Son. His $100 million Softbank Vision Fund is not only creating waves in Silicon Valley, but tidal waves.

Many countries, like Iran, Saudi Arabia, and Russia, still rely on petroleum for the lion's share of government revenues. Even though oil is still integral to the growth of the global economy, there is a new sheriff in town: big data.

Cut it up anyway you want, data is simply information, the "zeros" and "ones" that make up the digital world. The information that commands mouthwatering premiums these days can be unraveled by computers.

Computer deciphered data can show behavioral and consumer trends in stark daylight, helping companies ferret out business strategies are proving immensely powerful.

There is an exponential hockey stick effect going on here. As the quantity of data accumulates, the more valuable it becomes.

The types of data being collected are personal data, transactional data, web data, and sensor data used for IoT (Internet of Things) products.

Who is the major player vacuuming up this data?

Masayoshi Son, the CEO of Softbank (SFTBY), an ethnic Korean who grew up in a small village in Japan. He transferred to the San Francisco Peninsula Serramonte High School as an ambitious youth and graduated in 3 weeks.

Son ventured on to UC Berkeley majoring in economics and computer science. He is one of the most dynamic people in the World and has amassed personal wealth of around $25 billion.

A few of his brilliant pre-emptive strikes were seed investing in Yahoo, creating Yahoo Japan, and $20 million for a stake in Alibaba (BABA) in 1999. These investments increased more than 100-fold in value.

Son is on a mission to own or control assets that are the linchpin to global growth nourished by Artificial Intelligence in selective industries such as transportation, food, work, medicine, and finance.

The anchor that ties all these firms together is the massive hordes of data they harvest, which are central to directing how future automated robots and machines perform.

His goal envisions the construction of responsive robots that will emerge as the cash cow in 2045. The construction, utilization, and high performance of these machines will be the key to his vision.

Instead of splurging for premium human data, investors will be competing for the best performing robots and the data derived from them. Accurate human data will provide the springboard to the machine data these robots will generate.

After the first generation of robots endow us with their first batch of data, all human data will be irrelevant. Human information is the test case that robots are founded on.

Once the first cohort of robot data comes to market, the 2^nd generations of robots will be derived off the 1^st generation of robots. Humans will become irrelevant.

Once you marry the treasure trove of data with A.I., the results will enter the realm of today's science fiction. Imagine being the first CEO to bring functional robots to mass market and how valuable that first batch of robot data would represent.

In short, Son is positioning himself to organically engineer the highest-grade robots catalyzing the next gap up in global competition.

This year, Son is on a global treasure hunt to meld together the most precise "big data" he requires to build his robot squadron that will take over the world.

The fight these days is acquiring the oxygen to power these non-human contraptions. Without pure oxygen, i.e. massive amounts of data, engineers will create faulty robots that under-perform.

Looking at the amalgam of companies in which Son has invested, it is difficult to find any rhyme or reason. That is until you find the commonalty of big data.

Son invested $200 million in "Plenty" in July 2017, a company developing indoor farms. If indoor farm data is not diverse enough, then how about the $300 million he showered on San Francisco dog-walking app called "Wag".

The biggest holding in the Softbank Vision Fund is Uber. Uber is ubiquitously known as a ride sharing company that shuttles passengers from spot A to spot B.

Sweetening the deal was a substantial discount the Vison Fund received on a private placement of Uber shares. Uber is now worth about $70 billion and may someday become a FANG in its own right.

Supplementing this transaction is the custom online map app Mapbox, founded as a competitor to Google Maps. Some of Mapbox's partners include Snapchat, Lonely Planet, and The Weather Channel.

Vision Fund's second largest position is ARM Holdings, which is an English semiconductor chip company that has carved out a large segment of the Android and laptop market.

They produce simple CPU's (central processing units) and much more advanced GPU's (graphics processing units) that are placed in smartphones, TV's, tablets, and computers.

Son has shelled out $8.2 billion through the Softbank Vision Fund and the remaining 75% stake is owned by parent company Softbank Group. ARM is one of the shining beacons of European tech and Softbank has pegged its future to its success.

Unsurprisingly, Nvidia (NVDA) is the 3^rd largest weighting and the $5 billion Softbank investment into Nvidia (NVDA) represents a 4.9% stake in the company. The Nvidia commitment is logical considering ARM licenses their chip designs to Nvidia.

As autonomous vehicles will be one of the first benefactors from the cross pollination between big data and automation, these investments completely justify Son's long-term vision.

Son has also snapped up other ride sharing entities such as Didi Chuxing in China, Ola in India, Grab in Southeast Asia, and "99" in Brazil.

Some 31% of the global population is without Internet connectivity. Thus, Son bought OneWeb, which pioneers low cost, high quality satellites striving to grant Internet access for the people still without access. This maneuver will surely see his net data load increase.

In many of the Mad Hedge Technology Letters, we often offer readers the creme de la creme of public stock symbols, but this time it is different.

First, the major holdings in the Softbank vision fund, aside from Nvidia, are privately held companies that do not trade on any stock market.

However, it is very important to watch what he buys, as it gives insights into the best performing and fastest growing sub-sectors of technology.

Or you could just buy Softbank itself, whose shares have doubled over the past two years.

Son won't just flip these companies for a 30% or 50% profit. Tenfold, or hundred-fold gains are the order of the day.

In reality, Son's ultimate goal is to leach out the future aggregate data spewing out from his underlying portfolio and cross-pollinate it with A.I. and automation to revolutionize the world.

This year is a period of jockeying with other venture capitalists to positions themselves accordingly for the next 30, 40 and 50 years.

Welcome to the future.

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more

Lately, I have noticed an upsurge in questions about WWII from kids in their teens, and twenties, usually men.

Over the past 50 years, I have visited virtually every WWII battlefield, have read hundreds of books on the topic, and rank as an armchair general in my own right.

I also have has the pleasure of meeting the veterans of many armies, from a German ME 262 jet pilot, to my own Uncle Mitch, the first Medal of Honor winner of WWII.

The question for me always was, why are kids born a half century after the war suddenly interested in the subject. The answer is always the same: they heard about it on a video game. Gaming, in fact, is coming to shape these kids' understanding of history.

E-gaming is not typically pigeonholed as a highly attractive stock on Wall Street. But in 2018, the e-gaming phenomenon emphatically has legs.

People are spending more time playing video games globally with an accelerating pace.

The e-gaming sector is a far larger chunk of American economy that you would imagine.

Many American children under the age of 18 play video games for nearly 20 hours a week. This social abnormality has reached an extreme tipping point, where 10% of children are classified as obsessively addicted to these consoles.

The lucky firm procuring these satisfying yields are the video game producer, top dog Activision (ATVI).

Unzipping their quarterly data, investors can quickly grasp the vibrant breadth of this industry.

The most salient pillar of success is total net audience, which printed $385 million MAU/quarter-an increase of 1 million users from Q3 2017.

The business is split into 3 different segments: Activision along with subsidiaries Blizzard and King, which Activison bought in recent years. All are contributing unique gaming franchises which are immensely profitable.

Activision checked in at $1.33 billion of revenue for the quarter. Blizzard ratcheted up to $599 million, and King was on Blizzard's tail with $516 million.

The bread and butter of Activision is the gaming classic Call of Duty: World War II, which was the highest global grossing game in 2017. This franchise has been ranked #1 in the industry for eight of the last nine years.

Along with many brick and mortar businesses, e-gaming is stampeding into the online digital world. The industry is migrating in a consumer-led surge to full-game downloads instead of boxed purchases in stores.

This monetization method connects the gaming companies adjacent to the consumer with tightly bound synergies that cut out the middleman, Gamestop Corp (GME).

The skyward propulsion was also partially attributed to Activision's Blizzard and King upping their overall "daily time spent per user", exceeding 50 minutes. Daily usage per day is starting to reflect that of Facebook (FB), which is a mighty feat.

Activision capped off the most successful year in history, with a total operating income of over $1 billion and operating margin of over 38%.

Their pipeline includes World of Warcraft's Battle for Azeroth, expected to be released this summer.

Guidance was quite impressive, and Activision shelled out two blueprints depicting their plans to gather a head of steam.

The most profitable business is steered predominantly by Call of Duty's Live Ops package.

What are Live Ops? They are in-game purchases by the user. This has become the new normal in gaming, where players must buy items in order to stay ahead of the curve.

This method has proved extremely popular while pushing up the ROI/user.

The Live-Ops manifest in 3 forms:

Gacha - Popularized by Japanese capsule toy vending machines, the appeal of paying virtual currency for a chance to get an ultra-rare item has proven to be a sticky feature.

The objective is performance progress. Gamers are offered free or discounted gachas during the initial stages but must pay for higher tiered gacha that in return represent a higher-level score.

Online Competition - This includes competitive structures such as guilds, leagues, playoffs or leader-boards that will boost the retention rate. The core idea is exclusive competition with unique rewards.

One-time Events - Time sensitive events corral gamers into an exclusive venue, creating a forced spending environment to conflate spending with winning.

In-game offerings have been such a hit that the feature crossed the $1 billion threshold in Q4 2017, which comprised about 25% of total quarterly revenue.

Activision truly has the highest-quality downloadable content in 2017, including Zombies Chronicles for Call of Duty: Black Ops III, the top add-on service of the year for PlayStation.

Constructing stunning Live Ops features are a challenge for game studios, because Live Ops teams must build database servers that scale with the involvement of millions of hardcore gamers. Harmonizing these functions is a nightmare, but is highly effective if successful.

After Live Ops, the second stage of the blueprint is mobile execution. Mobile gaming has not been scaled to the extent of the PC and gaming console market. The mobile market is still in its infancy and gaming studios can capture the immense growth potential, especially in Asia.

Technology has progressed to the degree where Activision is able to triumphantly consummate this strategy. These two great initiatives will spur Activision to extreme heights.

The wild card is the Overwatch League that commenced late last year and is in its incubation stage. Overwatch is a new global e-gaming league that is televised in a traditional sporting-league format. The league reached 10 million unique viewers and almost 300,000 average viewer/minute in the first week.

The follow through, post week 1, was also exceptional, with viewership stabilized. The audience can access Amazon's Twitch platform to view these contests.

Activision has made a calculated bet that the "average joe" gamer will want to watch world-class caliber gamers perform as a spectator sport.

Activision plans to sell new expansion teams to an array of global cities, and if gaming maintains its appeal to the global youth, the league could potentially rival one of the physical sporting leagues in the United States. And yes, Activision intends to weave in its add-on features to these live encounters.

If you are keen on Activision's (ATVI) competitors, who also run healthy gaming franchises of their own, then have a look at Take-Two Interactive (TTWO), who hawk their legendary game, Grand Theft Auto or EA Sports- held up by the NFL Madden and FIFA soccer labels.

In short, Activison looks like a "BUY" here, and the recent correction has given us the gift of a fabulous entry point.

To visit Activision's website, please click here.

Long term readers of this letter know too well that after tripling from my initial forecast of $68 a share, that the shares of NVIDIA would double again.

After listening to their Q4 earnings call, I now have to confess that I was wrong my in assessment.

It now looks like NVIDIA shares will triple off of the recent $180 low.

From what I heard, the call was nothing less than amazing.

When considering companies limited by imagination, the last one I would anoint is Nvidia (NVDA).

I have been pounding the table for years, pleading with readers to drop everything and get into this battering ram of a stock.

If you didn't, well, you aren't buying at the bottom, but the future potential for Nvidia cannot be understated. Nvidia stands atop a parapet, scoffing at its enemies who simply cannot compare.

Its superior strategic position in GPU (graphics processing units) chips has forced the tech community to adopt its platform as the building blocks of A.I., machine learning, data center, and autonomous car technology.

In fact, Nvidia has only scratched the surface of its potential. The sustained growth story is not only intact but accelerating at a rapid clip.

The first chapter of Nvdia's rise to glory was on the back of e-gaming and the subsequent demand for their GPUs. The most talented gamers require the superior GPU's for faster processing speeds and crisper visuals that aid playing levels.

Casual gamers seem to upgrade their GPU's as well, since many of these participants cut their teeth jostling with their online counterparts 10 hours/day.

The main beneficiary of the GPU gaming upgrade boom is the model NVIDIA Pascal. This chip has the world's most advanced gaming GPU architecture, delivering truly game-changing performance, innovative technologies, and immersive, next-gen virtual reality.

Offering scintillating gameplay, it's a rung up in the gaming world. Additionally, the companies that manufacture gaming consoles are part and parcel in this GPU game of thrones. Sales of the Nintendo Switch provided a boost to Nvidia's Tegra processor revenue, tallying up to $450 million, up 75% YOY.

On a stand-alone basis, Nvidia is knocking the ball out of the park in terms of a pure gaming stock, but it is so much more than that. Nvidia IS the future. This was all apparent in last week's earnings call, which I shall outline below.

Data Centers

Revenue of $606 million was up a staggering 105% YOY, and up 20% QOQ. This over performance reflected strong adoption of Tesla V100 GPUs based on the Volta architecture, which began shipping in Q2 and continued to solidify in Q3 and Q4 2017.

V100's are present in every mainstream computer made by every major company, and have been chosen by every major cloud provider to deliver A.I. and high-performance computing.

Cloud customers adopting the V100 include Alibaba, Amazon Web Services, Baidu, Google, IBM, Microsoft Azure, Oracle and Samsung.

Nvidia perpetuates leadership in the AI training markets where their GPU's remain the platform of choice for training and machine learning networks. Any well-known company looking to A.I. functionality in the data center space relies on Nvidia to carry the load.

Nvidia posted a growing traction in the A.I. inference market where NVIDIA's platform can improve performance and efficiency by many degrees of magnitude over CPU's.

"Inference?" is the technology that puts sophisticated neural networks, trained on powerful GPUs, into use, solving problems for everyday users. Nvidia considers A.I. inference as a cogent new opportunity for the data center GPUs.

Nvidia is also gaining influence for A.I. in a growing number of vertical industries such as transportation, energy, manufacturing, smart cities, and healthcare.

The most poignant data center technology innovation was Tensor Core, a unique feature of the new Volta GPU Architecture. This technology alone can successfully complete rapid deep learning, and it officially increases the throughput of deep learning by 800%.

Autonomous Driving

Nvidia flaunted their leading position in autonomous vehicles with several salient landmarks and new partnerships. A.I. self-driving cars are trending towards moving from deployment to production.

Jensen Huang, the genius who is the CEO of Nvidia, announced that DRIVE Xavier, the world's first autonomous machine processor, will be available for the first time this quarter with more than 9 billion transistors.

DRIVE Xavier is the most complicated system Nvidia has ever delivered to customers. Recently trotted out, NVIDIA Drive is the world's first functional A.I. self-driving platform, enabling automakers to create autonomous vehicles they can operate safely.

This is a necessary component to prove its technology is ready for mass market. Several dynamic collaborations have begun with Uber, which has integrated A.I. video technology for its fleet of self-driving cars and freight trucks.

Production vehicles utilizing NVIDIA drive technology include vehicles from Chariot. Chariot is a privately-owned commuter shuttle service that is currently in the process of being acquired by Ford.

The company's mobile-phone application allows passengers to hop on a shuttle between home and work during commuting hours. Chariot currently operates in several neighborhoods in Silicon Valley and plans to swiftly expand to other locations around the United States. The Chariot fleet expects to be fully functional and possess automation capability by 2020.

Over 320 firms are now using the NVIDIA Drive platform, up 50% YOY, including almost every relevant car maker, truck maker, robo-taxi company, mapping company, car parts manufacturer and start-up in the autonomous vehicle ecosphere.

Nvidia has strategically placed itself on the front line hoping to expedite the roll out of this technology in the form of a massive fleet, servicing the individual. The obsolescence of human drivers is closer than you think.

Autonomous driving is the most significant paradigm shift in the history of the automotive industry. In total, transportation is a $10 trillion industry and I am not exaggerating when I say this will completely reshape our daily lives.

Vehicles will be fully or partly autonomous, depending on the entity. The potential of this market is massive.

The imminent monetization process will commence in 2019 and 2020, but if I had to bet money, I would say widespread profiteering will not occur until 2022.

The first goal is to train a network of autonomous driving capabilities, and this will be aided by creating a platform named NVIDIA GTX that grants everybody the chance to train a neural network promptly.

The inherent development of the A.I. requires top end GPU's, and Nvidia harvests a good portion of the spoils.

The second phase would be development platforms for the cars themselves and all these tasks will be executed by Nvidia Xavier SoC.

A system-on-a-chip (SoC) is a microchip with all the necessary electronic circuits and parts for a given system, such as a smartphone or wearable computer, on a single integrated circuit (IC).

Xavier is the most complex SoC that humankind has ever invented. All previous NVIDIA DRIVE software development carries over and runs with this consolidated architecture.

The prices for Nvidia GPU's split because the mix of solutions are unique. Autonomous vehicles that still have physical drivers will fetch a price between $500 to $1,000 per GPU.

Autonomous vehicles without drivers will command a price of $2,000-$3,000 per GPU. In general, the industry will see large-scale deployment starting FY 2018.

Practically every car produced in 2022 and beyond will have autonomous driving capabilities, requiring copious amounts of Nvidia GPU chips.

Huang repeatedly complains that Nvidia cannot keep up with the insane demand of these new technologies. There will be a persistent GPU shortage for the foreseeable future.

What does the future of AI behold aside from the imminent sensations of autonomous vehicles?

At a basic level, A.I. can be used for many things, such as improving images. For instance, you could reconstruct a photograph using A.I.. You could correct blemishes or parts of the image that haven't been rendered yet. A.I. would be used to fill in the holes, predict the future, and render results.

Let's take it one step further.

Extrapolating this concept to broader designs of everything, say cars, A.I. will be used to generate their designs in the future.

You could draw the first few preliminary scribbles of a car design and based on the inventory, safety, physics, consumer demands and other crucial inputs, the A.I. technology would complete the remaining 90% of the design.

This new type of design technology is called generative design and will revolutionize the way people do business.

My prognosis in the future of developing software is a world where computers can write their own software and this software will be so dense and complex that no human can replicate the task.

Essentially, we will be coaching up data to teach software how to write it's own software through machine learning. And imagine the new business applications introduced by this potential software!

Did I mention that Nvidia is also returning $1.25 billion to shareholders in FY 2019 and receiving another tailwind of high single digit growth in bitcoin mining?

Of course, all of that pales in comparison to the potential big picture profits Nvidia could realize. Jensen Huang has told investors that he expects A.I. to be a $10 billion/year business and autonomous technology to be a $40 billion/year business.

Remember that their most stable segment now is e-gaming GPUs which are only a paltry $3 billion/year in total revenue.

Nvidia could easily triple its business without fulfilling its revenue claims by just partially reaping the fruits of their labor from the A.I., data center, and autonomous vehicle industries. To visit their website please click here.