Breakfast News: The Sunday Edition

Welcome to our Sunday Edition: Your weekly guide for investing smarter through AI. Artificial general intelligence (AGI) refers to a level of artificial intelligence that can match or exceed human reasoning capabilities in virtually any task. While many believe AGI remains a distant reality, Nvidia CEO Jensen Huang claims it has arrived.

To explore potential AGI-related stocks, our Team Rule Breakers analysts chose one stock each that could likely benefit if AGI is already achieved. Here's what they proposed. In an AGI world, data is abundant, produced and consumed concurrently by humans and machines. The AGI system's effectiveness relies heavily on the data it can train on and interact with.

Thus, reliable, safe, organized, and intelligent data is essential. Everpure's data primacy architecture aims to provide all these attributes. Companies will no longer hoard "dark data" with questionable purpose or authenticity. Instead, data will carry embedded properties that can communicate with AI agents, regulating how AGI uses the data.

For instance, data can indicate its type and how and when to utilize it. A survey by Everpure and Omdia revealed that 99% of organizations possess untapped "dark data," and approximately 60% of enterprise AI projects fail due to this issue. The team predicts Everpure's stock to reach $382 within five years, representing annualized gains of around 25%.

Although chip stocks often receive attention, there's a broader AGI-related opportunity. Alphabet (GOOG -1.08%) thrives through its comprehensive AI approach. Its homegrown Application-Specific Integrated Circuits (ASICs), called Tensor Processing Units (TPUs), are tailor-made for specific AI tasks. This customization makes TPUs highly sought after as an alternative to GPUs.

Google possesses a vast array of AI systems, including its flagship Gemini frontier model. Google Cloud Platform acts as a primary distribution channel, providing massive computing power, storage, and flexible on-demand services. Google Cloud has become the fastest-growing among the Big 3 cloud providers, with an 82% increase in second-quarter revenue, tripling profits.

Google's ecosystem includes 14 products with over 1 billion users each, and its Gemini AI model is the latest addition, powered by Waymo's lead in the U.S. robotaxi and self-driving car industry. With AGI on the horizon, Broadcom (AVGO -0.48%) could seize significant opportunities in networking and compute. The company leads in Ethernet networking technology, manufacturing routers and switches that connect networks and devices.

As AGI training and inference demand thousands or millions of accelerators working together, Broadcom's dominance in optical interconnects positions it well for substantial revenue growth. Broadcom also excels in compute, producing AI accelerators called XPUs for major hyperscalers like Alphabet and Meta Platforms (META -0.96%).

Broadly, Broadcom's custom chips tailored to specific needs could enhance efficiency and lower costs in an AGI world. As computing in an AGI environment transforms, two key chip manufacturing companies stand out: ASML (ASML +0.72%) and Taiwan Semiconductor (TSM +1.49%). Inference will become the main bottleneck, not training large language models, due to the exponential number of agents performing complex reasoning tasks.

This surge in demand for fast, efficient, and low-power inference-focused chips will drive ASML and TSMC's chip-making technologies and capabilities to new heights. By the time AGI arrives, there will likely be an explosion in demand for chips catering to industrial robots and inference in new data centers. While AGI's arrival remains uncertain, investing in a diversified stack of compute, network infrastructure, and intelligent applications is a prudent strategy.

Over the next five years, learning, monitoring trends, evaluating fundamentals, and building a measured position in AGI-related stocks may prove fruitful. Next week, we'll introduce more AGI stocks for you to consider. Stay tuned!