This Changed the Way I Look for AI Stocks Forever

The 2023 investor mania for artificial intelligence (AI) stocks rightly pushed legitimate AI players like Nvidia (NVDA) and Microsoft (MSFT) to new highs.

It also helped make Nvidia the world's newest $1-trillion company as shares more than doubled.

But... it brought some iffy, speculative junk along for the ride too.

Reminiscent of the 2010s "Blockchain bubble," companies with the thinnest connections to AI have begun "leveraging" it, usually in empty, buzzword-ridden press releases.

The good news is the AI bubble - which still has a little air left in it - is starting to shrink as investors come to their senses and realize that a $2-per-share bottling that slapped"AI" in its name this March isn't going to hit $487.

But the fact remains that virtually everyfirm in the Fortune 500 mentioned or alluded to AI plans in their most recent earnings calls. Artificial intelligence is being carefully scrutinized and tested in C-suites all over the world. AI is going to have a massive impact on the markets, let alone our daily lives.

Sure, it's poised to add $4.4 trillion per year to the global economy... but it'll also change the way money is made. It's becoming clear that the firms which adopt this disruptive tech early on - and adopt it smartly - will have an unbeatable advantage.

Why am I so confident?

Well, Garrett Baldwin made just this point to me in a conversation the other day...

How to Find AI Stocks Where No One Else Is Looking

"There are plenty of AI stocks out there that just don't seem like it at first," he said. "We need to broaden our idea of what an 'AI stock' is. I don't mean chasing garbage; don't waste time 'analyzing' every fly-by-night operation that calls itself an 'AI company.'"

Garrett continued, "I mean looking for quality companies with fortress balance sheets, with smart head-honchos who are looking at all - and I mean all - of the ways artificial intelligence can boost their top and bottom lines."

An interesting idea, I thought. Maybe a little dangerous, too... After all, investors' "broad" idea of AI stocks had generated a hell of a lot of froth in companies better off left at the fringes of the pink sheets.

So, I asked him to kindly elaborate.

"The companies I talk about in Postcards all the time. Think of them as 'stealth' AI stocks; they're in sectors across the market - energy, retail, manufacturing, shipping. They're all over the place if you know where to look."

He went on, "Take Domino's (DPZ). Yeah, the pizza shop. They are using AI right now very creatively; it's gonna take the competition a while to catch up. They've been surprisingly innovative for years when you think about it. They're using AI to build individualized consumer profiles, to 'remember' order preferences. There are who-knows-how-many Domino's franchisees in something like 6,700 locations in the States alone. Before long, AI will ensure you get the exact same pizza from L.A. to Boston - consistent quality. AI will be mapping the most efficient routes for drivers there if it's not doing that already. In some places robots deliver their pies, for cryin' out loud; you can't pull that off without a pretty sophisticated level of AI integration. This technology is going to end up sending DPZ back to its 2021 highs eventually."

Okay, I said - it makes sense that a company like Dominos, with its business model, would be testing the AI waters. But it sounds like they're jumping in head-first.

"They're not alone, either. One of our old favorites, John Deere is actually a leader in AI adoption, too.

"Farming has been a low-key innovation hotspot for, like, 6,000 years, since the Mesopotamians decided to quit hunting and gathering and give farming a try. I can't overstate the size of that leap - it literally changed everything.

"And it never really stopped," he said.

"It would shock most people to learn exactly how high-tech farming and agriculture are these days - it has to be, because farmers need to maximize production of pretty much every square inch of land. Populations are exploding at a time when the climate is changing; these folks need to be on their game. They're using things like AI-generated topographical and meteorological data just for starters.

"And Deere & Co. (DE) - a firm on the sunny side of 200 years old at this point - is the name to own here. Not just smart tractors and combines, either, though those are absolute marvels. Their GreenStar and AutoTrac programs are bringing AI into thousands of farming operations, maximizing efficiency, expanding crop yields, slashing waste. You can use AI to essentially get a Deere tractor to think for itself at this point - driverless. We're a ways off from AI-powered self-driving cars in cities, but believe me they're already down on the farm. Deere would be a great stock regardless; it's trading at 14 times earnings and just two times revenue.

"Out in the energy sector, Exxon Mobil (XOM) is doing incredible things with artificial intelligence; geology - an oilman's bread and butter - production, transport, maintenance...

"I could go on, but I think you get the picture. Investors looking to really tap the profit potential in AI stocks need to look at the Nvidias out there, sure, but they should be looking harder at companies that are already starting to leverage this new tech; they'll be riding a wave, essentially, toward AI-boosted profits and I think that's a wave everyone should ride right now.

P.S. - I'm lucky to have 24/7 access to Garrett Baldwin's investing chops. You can, too, and get all the free Postcards research he publishes every day. Just go here and drop us your email address. We'll send you his Mandatory Wealth Portfolio packed with stocks that have the potential to make your grandchildren rich.