In today’s rapidly shifting economy, the next 12–24 months could reward investors who position ahead of the curve – and right now, that curve is bending sharply toward artificial intelligence.
At the core of my thesis is a simple but powerful idea: AI is not just software anymore – it’s moving into the physical world, and that means we need the materials and infrastructure to power this transformation. This creates a once-in-a-decade opportunity for sharp investors willing to get ahead of geopolitical noise and short-term volatility.
Click the image above to hear me break it down in our Being Exponential podcast, and continue below for more:
We’re entering what could be the two best years of the AI boom – akin to the 1998–99 period during the dot-com era – where exponential gains will disproportionately accrue to investors focused on AI’s physical and digital foundations.
The headlines might seem discouraging at first glance. June inflation ticked higher for a third straight month. The U.S. faces escalating trade tensions. And some market commentators claim stocks are stalling near all-time highs.
But that’s a myopic view. These risks – while real – are temporary noise against a larger, secular trend: the rise of physical AI, autonomous vehicles, humanoid robots, and enterprise AI applications.
Consider MP Materials (MP).
The stock has skyrocketed on the back of blockbuster supply agreements with Apple (AAPL) and the Pentagon to build a secure, domestic supply chain for rare earth magnets. These magnets are mission-critical for physical AI – from humanoid robot actuators to self-driving car motors – and America’s top companies and the government are now all-in on securing domestic sources.
MP’s price action reflects this transformation: in just two months, shares have tripled from $20 to $60. Yes, it’s technically overbought (RSI above 84), but the long-term thesis is clearer than ever. The guesswork is over. The U.S. government and Apple have picked their flagship domestic supplier – and it is MP.
Or take Grok 4, Elon Musk’s latest AI model.
I’ve long viewed Grok as a laggard in AI benchmarking, but Grok 4 changed the game, testing at or above the performance of leaders like ChatGPT and Gemini. This leapfrog progress signals that foundational AI models across the board could improve by another 50% – three times – over the next 2–3 years. That means massive downstream productivity gains across sectors.
Meanwhile, Nvidia (NVDA) just crossed a $4 trillion market cap – outpacing the GDP of most countries except the U.S. and China. The market’s message is loud and clear: AI is the epicenter of capital allocation today.
Yet many investors are sitting on the sidelines, paralyzed by short-term headlines about tariffs and inflation, missing the forest for the trees. If you wait until this AI wave is obvious to everyone, it will already have passed you by.
This is a stock picker’s market – one rewarding investors who lean into exponential names like MP, QuantumScape (QS), and Amprius (AMPX), rather than chasing broad indices at all-time highs.
So where do we go from here?
- Inflation: The June CPI report was a warning shot, not a crisis. Mild reinflation reflects trade policy brinkmanship, not runaway consumer price growth. I expect de-escalation in the coming weeks, clearing the way for rate cuts and a second-half market rally.
- AI and Infrastructure: The hyperscalers – Meta, Amazon, Google – are plowing hundreds of billions into data centers and AI compute. That capital is flowing downstream to battery makers like QuantumScape and Amprius and defense names like AeroVironment (AIRO) and RedCat (RCAT).
- Crypto: Bitcoin’s (BTC/USD) breakout above $120K confirms my technical thesis: this cycle could drive BTC to $150K–$200K by year-end, with altcoins poised for outsized gains in this “last hurrah” of the cycle before a future winter.
- Robotaxis: Tesla is rapidly expanding its robo-taxi operations, challenging incumbents like Waymo, while Uber smartly hedges its bets through a global partnership with Baidu’s Apollo Go program.
My motto remains: AI with AI. That means focusing your portfolio squarely on companies directly enabling the AI revolution – semiconductors, energy infrastructure, battery makers, AI software deployers, and key materials suppliers like MP Materials.
Ignore the noise. Follow the money. This is the start of an exponential chapter for investors willing to embrace change and think long-term.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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