Transcript 0:00 So we've all made the mistake of thinking that we had to pick the right company that we've never heard of before that's gonna pop up with this new technology or new industry. 0:10 We're gonna select the right one out of all the ones available, and that one is going to be successful and make us rich. We've all made that mistake. 0:17 I'm gonna tell you why that's wrong and why sometimes the companies we already know about are the ones that are the real winners. 0:24 [upbeat music] So I'm sure you're familiar with the AI race and all the things that's going on in the market as far as the valuations and why they're so high. 0:35 So basically what's going on, a lot of people believed the stories that a lot of the AI businesses were telling. We invested in those businesses. 0:43 Those valuations continued to grow, continued to grow, and pretty much off the backs of a few, uh, successful companies, uh, like Nvidia, and we're looking for the next big company to skyrocket and make our money big in the market. 0:56 So a lot of companies are kind of stalling at this point because we have a lot of questions as investors. You're spending all of these billions of dollars. You have all these circular deals going on in the market. 1:08 What's real and what's not? Where is the return on the investment? When can we expect it, and how much is it gonna be? 1:14 These are questions that a lot of businesses who are investing billions in AI and infrastructure can't answer. So we're seeing a lot of those companies stall right now. But 1:26 the lesson that we all need to learn is that sometimes we already know who the winners are. We, we know of them. They exist. We've invested in them before. They're popular businesses. 1:37 But we don't associate them with this new technology because we're-- the default is we're looking for the new company that we've never heard of. We're just kinda, "Who's the new guy? 1:48 Who's the one that's gonna skyrocket and take our money to the moon? Who is that?" And we overlook some of the established businesses that are gonna benefit the most from the new technology. 1:58 And the example that I have is in the... A few years ago, there was a three-D company, or I should say there was a three-D printing craze, right? The additive manufacturing or three-D printing was a big deal. 2:10 Now, the reason it became a big deal a few years ago is because it became, um, easier to manufacture, easier to build, easier to have these three-D printing machines, whether it's in your home or in factories. 2:24 It was just a lot accessible to the public, so it became popular again. Now, this wasn't new technology, but it was just technology that was being pushed to the public and to the forefront. 2:33 And of course, the market is always looking for something to craze about, so they bid on it and became this big deal. And there were these companies that were going public off of this hype. 2:44 As they were going public with the hope that these new companies were going to, uh, make us a lot of money, a lot of them ended up filing for bankruptcy. 2:53 So three companies I wanna name, uh, Desktop Metal, Shapeways, and Fast Radius. These are companies that went public, uh, twenty twenty-two, twenty twenty-one, and, um, in twenty twenty. 3:06 So around that timeframe, twenty twenty to twenty twenty-two, some of these companies went public, and they're all bankrupt right now. 3:11 Now, I'm not saying that all the three-D printing businesses that went public are bankrupt. 3:16 But what I'm saying is you have to be careful when it comes to these new technologies or, uh, n-new technologies or new industries. A lot of these technologies are not industries within themselves. 3:28 They're tools that are gonna enhance existing industries, and I believe AI is the same way. Now, with the three-D printing, the companies that benefited the most, you got Eaton Corporation, and you got 3M. 3:41 Manufacturing businesses that already existed, that were global, that had the supply chain, that had the, uh, distribution. They have factories all over the world. 3:51 They had the infrastructure in place where they could take this new technology, insert it into their existing operations, and benefit. 3:58 Now, with 3M and, and Eaton, you have these companies who they may not be three-D printing products to sell, but what happens is they have these factories with all these machines, and when a machine breaks, instead of me ordering a part and having to wait for it to get here and be shipped, and then I have to install it then, I can three-D print the replacement part on the premise 4:22 and have it installed within a day or hours. That makes my operation more efficient. That means my existing operation is-- it costs less. 4:32 I'm making more money at the end of the day because I can get those products to the customer, uh, faster with less downtime with our machines. 4:40 So these are the things that the savvy investors would have thought about or savvy analysts would have thought about to say these e-existing companies are gonna benefit the most from this new technology because of all these factors that I mentioned before. 4:54 Now, if we switch over to AI, we have these two companies that we've all known about, Microsoft and Amazon. 5:02 These companies are finally giving investors what we've been looking for when it comes to all this data infrastructure or data center infrastructure building and AI infrastructure, all these investments. 5:14 Where's the return? Who, who's going to grow their revenues from all these billions as are being spent? So here we go. We got Microsoft. 5:21 They reported earnings recently and from their, uh, twenty-six year-end, fiscal year-end, and their Microsoft cloud revenue increased twenty-seven percent. 5:31 And the commercial remaining performance obligations, meaning their backlog, all the orders that they have that people have put orders in, they haven't really received the money yet because they haven't, they haven't earned it. 5:42 They haven't done the work yet, but it's work that's going to be done, increased eighty-four percent to six hundred and seventy-eight billion dollars. That 5:51 made investors happy because we're seeing somebody finally benefit and show some revenue growth from all the spending. Now let's go to Amazon's earnings release. Amazon Web Services grew thirty-six point seven percent. 6:08 Year over year. This is great growth. These are very established businesses that are finding ways to use new technologies to grow their current operations. 6:20 That's the secret to the companies that are gonna benefit the most. It's not going to be some of these small... I'm not-- Again, here's a caveat. Some of these smaller companies are going to be successful. 6:31 I'm not saying CoreWeave is a bad investment. I'm not saying that. What I'm saying is, when you're trying to guess which company is going to be the one to invest in, which, which is really difficult. 6:42 Of course, at the end of the day, everybody's gonna say that they picked the right company. But if you really think about it, it's really hard to decide which one is going to be the one that's gonna benefit you the most. 6:52 However, uh, we know sometimes these companies are gonna fail, but we have these companies like Amazon and Microsoft that we know them, they're established. 7:02 Uh, this, the cloud services was already a part of their business model. It's not like this company is going to just up and start offering their service. 7:11 They were already offering their service with Microsoft, uh, excuse me, Amazon Web Services and Azure. They already existed. 7:17 Now you, this AI technology is coming along, and now I can use this, uh, LLMs and all this other, you know, quantum computing, whatever it is, I can now use this within my operation, making it, uh, faster, making it more efficient, and just enhancing the service that I'm already giving to my customers. 7:36 Those are the businesses that are going to be the true winners. They've already been winning, and the real winners continue to win because they already have that infrastructure in place to put these new technologies in. 7:49 So we have to be careful when we're constantly looking for the next best thing and realize the next best thing is something that we already know about, because that's how great these businesses are built. 8:01 So I hope this video has been helpful to you. 8:03 Check out the link in the description to sign up for the newsletter, so insights like these and more will be straight from me to you directly to your inbox every week, and I hope to see you in the next video. 8:14 [outro music]
