This AI Penny Stock is the Moonshot of the Week

We always recommend some proven investing rules that you should follow to the letter to protect and grow your wealth:

Dollar-cost average in… use stops… look at the fundamentals… pay attention to policy… watch your position size… the trend is your friend… to name just a few.

Few investors realize it can be a good idea to set aside a small chunk of capital to speculate. To go after the kinds of longshots that can pay off 10-, 20-, or 50-times over. The gains can be even bigger sometimes.

The market is full of bets like this. They’re micro- and small-cap firms growing revenue by double digits or more.

That’s the kind of stock we’re going after today. But we’re not going to charge in blind.

Position sizing is key to successful speculation.

You never, ever bet the farm (or your kids’ college fund) on one of these types of opportunities. Rather you take 1% or 2% of your capital and “let it ride.”

And these aren’t necessarily the kinds of companies you want to own for the long haul, either. You could be holding the next Microsoft (MSFT). But odds are you’re not.

Not to worry though, often a quarter or two of monster gains is enough.

With all this in mind, let’s look at a tiny artificial intelligence (AI) company I’ve been watching…

The Growth of AI Means It’s Worth Taking a Flyer Here

We’ve all just come through an intense “AI Bubble.”

There were some genuinely encouraging, bullish developments at key names like Nvidia (NVDA) and Microsoft. This set off a mania for anything even remotely related to AI. In fact, nearly every Fortune 500 company mentioned AI in its second quarter earnings calls.

That overheated sector is in the process of cooling off right now… and that’s a very good thing.

It gives us room to go higher again in the near future. But, in a more sustainable way. The weak money is being shaken free.

Mania or not, artificial intelligence will be worth more than $15.7 trillion before it’s all said and done. Its brightest days are still ahead, and the companies that’ll dominate are still out there waiting to be discovered. Let’s not kid ourselves, $15.7 trillion is more than enough to go around.

Plenty of momentum is gathering around the “AI singularity” Shah Gilani’s been talking about. That one event could potentially grow fortunes by anywhere from 6,000% to 12,400% by 2030.

Major players like Nvidia will cement their positions, of course. But most of the upside potential in names like those have already been realized. Nvidia may double again from its current $427 level… but that’s about it.

We think the largest gains are going to come from smaller companies operating in this space. We’re talking stocks trading anywhere from a few cents to $10 or $20 per share.

With that price tag in mind, that makes FatBrain AI, listed as LZG International (LZGI), worthy of a first… or even a second look. Currently shares trade OTC (over the counter) at $0.48. Like a lot of other companies, it zoomed higher during the bubble. But it’s since fallen back to safer- saner - levels.

LZG International is a true micro-cap with a market cap of a mere $73 million. Volume is low. Only around 169,000 shares per day trade hands. But you shouldn’t have much trouble getting into or out of a position.

Let’s pause for a second to take an opportunity for some transparency... I don’t own any shares of LZG International. No one in my immediate family does, either. If that were the case, I’d have to mention it here. And I have no plans to take a position in the next 48 hours. If I did own it and failed to disclose that position, I could find myself in hot water.

Now that that’s out of the way…

22,000% Growth Ain’t No Joke

FatBrain spent most of 2022 making strategic acquisitions, like Zero2A’s ZeroTrust platform.

ZeroTrust enables diverse companies in different sectors to collaborate while keeping confidential or regulated information close to the vest. Precisely where it belongs.

This platform does away with the risk involved in opening up the books and letting collaborators in. In a world where there are immediate and brutal downsides to violating HIPAA or GDPR regulations, ZeroTrust makes good sense.

Another recent FatBrain deal was for UK-based Predictive Black Ltd. This acquisition gives the company the capability to provide real-time cash management and financial health services via its Predictive Black SaaS (software-as-a-service) platform.

These deals put FatBrain AI in a fairly comfortable position to provide AI and machine-learning solutions to the budding entrepreneurial class out here. And that appears to be a market segment FatBrain feels pretty good about.

Last year’s deals and hard work have allowed FatBrain to enjoy a stellar 2023. And I do mean stellar: Revenue has soared nearly 22,000% from a year ago. It rocketed from $216,000 to $44 million. And for 2024, revenue is projected to top $104 million.

With growth like that, $0.48 per share is a reasonable price to pay to take a crack at an AI moonshot.

It’s worth mentioning again that this is not a stock to go all-in on. It’s a way to speculate with a small portion of your capital.

The gains have potential to be huge. But the risk is significant, too. So, please play it safe and smart out there: Don’t risk what you might not be comfortable losing. That’s good advice for any investment, but imperative for a penny stock.

Until next time,

Greg Madison