Editor’s Note: Longtime Diary readers will know that our usual beat is money. But when our other Bonner & Partners editors uncover profitable ideas, we pass them along to dear readers.
Today, Jeff Brown, Bill’s trusted tech expert, shows why one of the best artificial intelligence (AI) stocks to own is hiding in plain sight. Read on to see why AI is revolutionizing commerce… and providing us with incredible investment opportunities.
We’re at the cusp of the most powerful investing trend of our lifetime…
A bleeding-edge technology has hit an inflection point. It’ll change our society in ways that few can predict. Entirely new industries will be born – and fortunes will be made.
The tech I’m referring to is artificial intelligence (AI).
And if you’re looking for a great long-term AI investment, keep reading. Because one of the world’s best AI companies has been hiding in plain sight…
Now, you might think Amazon (AMZN) is just a great e-commerce company. But in fact, it’s also one of the best AI companies in the world.
I know this because I recently attended the inaugural Amazon re:MARS 2019 conference in Las Vegas.
The invite-only conference focused on Machine learning, Automation, Robotics, and Space. (That’s what MARS stands for.) And it’s where I learned how pervasive AI has become in Amazon’s business…
Before I go any further, I’ll address the elephant in the room. Longtime readers of Bill Bonner’s Diary will know that Bill is very bearish on the company. I’ve known Bill for a while now. I have nothing but respect for him. And he’s had some great calls over the years. Yet on Amazon, we certainly agree to disagree.
We first discussed Amazon over breakfast in July 2015. I said that the company’s stock was worth every penny and that it belonged in every investor’s portfolio.
Bill didn’t bite. And that’s fine. As professionals, we can disagree from time to time. And it’s healthy to consider differing viewpoints. That’s how you learn, after all.
But I believe Amazon’s best days are still ahead of it. Here’s why…
AI Convenience Stores
You see, Amazon is fanatical about fast-moving consumer goods (FMCG). It’s built out one of the largest and most efficient distribution networks in the world with the goal of eventually delivering products within hours. It provides convenience that consumers can’t get anywhere else.
And Amazon’s strategic plans to dominate the FMCG market aren’t limited to e-commerce. It’s been building the next generation of the convenience store: Amazon Go.
The stores are powered entirely by AI and computer vision. Cameras are strategically placed throughout them. And they use computer vision to track customers’ activities.
When you walk inside, you scan a barcode on your phone’s Amazon Go app, which links to your Amazon account. That’s how the cameras know who you are.
Inside an Amazon Go store (Source: CNET)
From there, you’re free to browse and take any items you wish. The cameras track which items you take. Then, you can simply leave with your items. Amazon will charge your credit card on file and email you a receipt.
No lines. No checkout counters. No self-scanning. You just walk in, grab what you want, and walk out…
How’s that for convenient?
There are 13 Go stores operating right now. But I learned at the conference that Amazon plans to open 3,000 Go stores in the U.S. alone by 2021.
Amazon firmly believes this is the future of retail. And it’s all powered by AI.
But there’s more…
Did you know that AI-powered robots almost entirely run Amazon’s fulfillment warehouses?
When orders come in, AI-powered robots locate the items… take them to the packaging center… box them up… slap on the shipping labels… and sort the packages to the right loading bins. Then, humans load the packages onto the trucks.
Amazon’s AI-powered robots
In Amazon’s earlier days, humans did all that work. And they made a lot of mistakes. Packages they loaded onto the wrong trucks resulted in late deliveries.
But since Amazon has fully automated its warehouses, the robots have reduced sorting errors by over 50%. We can see the results in how fast and consistently Amazon is able to deliver packages to us today.
And this remarkable achievement is thanks to AI.
Now, there’s one last piece of evidence I uncovered at the conference…
One Billion Packages a Year
Amazon has roughly 400 million products on offer. And it now ships more than one billion packages every year.
Think about it… It has to get all those products to customers – often in two days or less. That’s a logistical nightmare.
So to make it work, Amazon forecasts sales every day. It estimates how much of each product consumers are likely to order and plans accordingly.
But with so many products and so much volume, there isn’t a single person or group of people who can make all those forecasts.
That’s where deep learning comes in. It uses a form of AI called neural networks to produce forecasts.
Neural networks can analyze thousands of variables to determine the best possible outcome. That’s clearly something no human can possibly do.
So in 2016, Amazon started using this deep learning to analyze its supply chain… make business forecasts… and optimize everything for the best output.
And at the conference, I learned Amazon’s forecasting got 15 times better in the first year after deploying this tech. That kind of breakthrough is simply incredible…
The Year of AI
I’ll share one last insight with you on how fast AI is progressing…
I listened to a talk from Stanford University adjunct professor Andrew Ng. He’s followed the rise of AI and deep learning since 2008. So he’s one of the most influential minds in the space.
Andrew attended an AI conference annually. And he said there were usually 100-150 papers to read from the conference each year.
Today, he says there are 100 AI/deep-learning reports published every day. So the industry is producing as much research in a day as it’s produced in a year for much of the past decade.
And that’s made it impossible for Andrew to stay on top of all the research. There’s just too much coming out for one person to keep up.
For investors, AI will provide us with some of the best investment opportunities of our lifetimes. This trend is that powerful.
And as I showed, Amazon is hands down one of the best AI companies in the world.
With its nearly $1 trillion valuation, you might think Amazon’s growth days are behind it.
But that’s far from the case. Thanks to AI, I still see plenty of growth ahead for the company and its stock price.
Editor, Exponential Tech Investor
P.S. Amazon is still a great buy today. But if you had invested just $1,000 during Amazon’s IPO, you’d be sitting on $1.2 million today. That’s the power of investing in early stage technology companies.
Sadly, everyday investors are typically locked out of investing in the best early stage tech. These investments are reserved for venture capitalists and connected insiders.
But I recently uncovered a way for Main Street investors to turn the tables. It’s a way to make venture capital-like returns without being a VC or buying pre-IPO shares. It took me five years to fine-tune this method, but I’m finally ready to reveal my findings.
I’ll lay it all on the table on July 24 at 8 p.m. ET during a free online investing summit. Be sure to save your spot while there’s still time. Go right here.