by | May 31, 2024 | Miscellaneous | 0 comments

Artificial Intelligence, or AI as it is called, is all the rage these days.  I agree with those who say it may be the biggest technological advancement of our lives, transformative in the way electrification was 125 years ago or the advent of computers in the mid-20th century.  The infrastructure buildout to support AI is also one of the biggest projects ever undertaken, and is being done with eye-watering speed, mainly by private enterprise rather than the government. 

The Future Technologies portfolio that I manage for Shadowridge is currently over 50% invested in the stocks of companies directly involved in AI, either making computer chips, supplying equipment to chip makers, handling the boatloads of data AI needs, or providing AI augmented services to their customers. 

Even the companies in the portfolio that don’t seem like tech companies are benefiting greatly from it.  Chevron is now one of the largest clean energy providers of any integrated oil company.  McDonalds has become a tech company that efficiently sells hamburgers.  Pfizer is a pharmaceutical company that is using AI to comb through multitudes of chemical compounds in days to quickly develop custom, personalized medicines that would take humans years to develop.  Waste Management plans to become one of the largest energy producers in the US by capturing and burning methane from its landfills to generate electricity.  I could go on, but you get the idea.  Technology is changing our lives everywhere! 

One of the newest additions to the Future Tech portfolio was added after reading about Microsoft’s planned AI data center in Wisconsin.  This super computer will be as large as 10 football fields and will use enough energy to power 1,000,000 homes.  To provide that much electricity, the data center is expected to have its own nuclear power plant.  How cool is that! 

Nuclear power is the cleanest, most reliable type of power there is, but due to the politics of fear, very few new plants have been built in the past 40 years.  I believe that Microsoft, not burdened with being a public utility, will get this next-generation power plant built in a small fraction of the time and cost of recent power projects.  And I also believe that when Microsoft pulls this off, it may jump-start the nuclear power industry in the US and unleash a wave of power plant building that this country so greatly needs to meet the rising demand for electricity.  I think Microsoft’s next-gen power plant is the proverbial camel’s nose under the tent – the beginning of great upheaval in the utility industry. 

There was a saying in the gold rush days that the people who made the most money were those that sold the picks and shovels to the miners.  In that vein (see what I did there?), our newest Future Tech holding is a uranium mining company with earnings that are poised to increase dramatically over the next few years.  If Microsoft’s nuclear plant is indeed the first of many to come, this stock may be in the sweet spot of the “picks and shovels” end of the AI revolution. 

As you can see, Shadowridge is different from most financial advisers.  We don’t just regurgitate what we read off a computer screen or use some standard formula like ordinary advisers use to dictate investment mixes.  We are true investment researchers and hands-on money managers. We look at every investment we hold for clients, every day.   

The proactive, custom investment portfolios that we provide are only available at Shadowridge. If you have friends who complain about advisers who don’t seem to pay attention, please forward them this newsletter so they can see the type of expertise we provide at Shadowridge.  

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