Why Rocks and Blood Are the Only Enduring AI Play VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - AI is not what you think it is
- Two resource legends have found an enduring way to play it
- Crypto has gone risk-off, and it’s impacting tech stocks
- Bitcoin is down 14% since our warning
- A new Snapback signal in this tech darling
The AI trade is the ultimate market shapeshifter… Hidden in the sandy shallows off the Indo-Pacific coastlines lives the most deceptive creature on Earth: the mimic octopus. It gets its name from its ability to transform at will. It can become a less threatening form to lure in prey… or a dangerous predator to scare away what stalks it… or even just a floating clump of algae to disappear entirely. 
A mimic octopus taking on the form of a common fish // Source: Scuba Diver Life And if you’ve been watching the AI trade over the last two years, you’ll know that markets can shapeshift just as fast. Just when investors think they’ve nailed the best stocks to own for the AI boom, it changes shape… leaving them confused and scrambling for the next target. - Last year, it was about semiconductor stocks such as Nvidia, TSMC, and Super Micro Computer
- Then it became about cloud infrastructure with the hyperscalers Google, Microsoft, and Amazon
- Earlier this year, the narrative shifted to software and robotics, focusing on AI applications
These rapid shifts have left investors chasing big moves in highly speculative stocks. And if the last few months taught us anything, it’s that chasing every new twist in the story can result in brutal losses. Robotics firm Symbotic (SYM) is down 27% from its Nov. 3 high. AI-based language learning app Duolingo (DUOL) is down about 42% from its all-time high in May. AI design software company Figma is down 67% since its August IPO (initial public offering) and down 20% just this month. | Recommended Link | | | | It has a 100% history of rising starting January 1, at a rate fast enough to make you 6 times your money across a year. WARNING: This link contains disturbing content, but it’s been endorsed by 3 different Wall Street legends and is responsible for some of our most successful stock picks this year. Click here to see the ticker and full story. |  | | But you don’t have to chase these hot AI stocks to profit from the boom… The mimic octopus can switch forms in an instant. But no matter what it pretends to be, its underlying anatomy never changes. That’s the clue most investors miss when trying to decode what AI truly is. AI isn’t semiconductors, cloud servers, or robots… although it takes on all these forms. At its core, it’s dirt, rocks, oil – and the human labor that digs it all out of the ground. Copper wires carry power through AI data centers. Gold and silver sit in the connectors, contacts, and bonding wires that make advanced chips work. Oil, natural gas, and other fossil fuels provide the power these systems devour. Rare earth elements – more than a dozen of them – are essential for the high-precision motors and magnets that that allow AI-powered robots to move through the world. That’s why the White House is buying stakes in domestic rare earth elements and lithium companies. Without them, there can be no AI. Take MP Materials (MP), which mines and processes rare-earth minerals in the U.S. mainly for magnets. In July, the Department of Defense became the largest shareholder in the company after buying preferred stock, sending the price up 50.6% in a day. And in October, the Department of Energy acquired a 5% stake in Lithium Americas (LAC) – which develops and operates lithium mines mainly for batteries. The deal saw LAC’s stock price double after the news leaked in September. These moves show that being a leader in AI isn’t just about algorithms and cloud servers – it’s about controlling the raw materials they depend on. We don’t usually cover natural resource investing in-depth at TradeSmith or the other MarketWise firms. But tomorrow, Nov. 18, at 10 a.m. ET, MarketWise CEO David “Doc” Eifrig is gathering together all seven MarketWise firms – TradeSmith, Altimetry, Chaikin Analytics, Stansberry Research, InvestorPlace, Brownstone Research, and Wide Moat Research – for a one-off event to show you how to profit from the “anatomy of AI.” You see, Doc recently brought in two in two investors with deep connections to the stocks involved in this story to lay out what’s at stake in a special event. Here’s what Doc had to say about them: The first is a man who’s spent 50 years investing in these stocks. He started out as a doorman in a Vancouver bar, before helping to build an empire worth almost $50 billion. Along the way, he’s been involved in several truly historic wins, including two different stocks that turned a $1,000 stake into more than a million dollars. Alongside him is a man with an equally enviable track record… Not just stocks that have gone up 200 or 300%… he’s made investments which went on to soar high as 5,135% and 66,580%… while sharing opportunities with readers to see gains as high as 940%, 1,640%… even 4,500%… And these two investors say those gains will look like a drop in the bucket by this time next year. That’s why Doc is taking this unusual step of convening The Stocks That Save America Summit. This is a story – and a set of urgent recommendations – that you need to know about. Among other things, they’ll cover: - Why government insiders – including military officials, billionaire donors and even the President’s sons – are moving money into a shortlist of national-priority stocks now considered “too critical to fail.”
- Why 300 times more “inside money” is about to rush into these stocks, starting just days from now.
- The little-known congressional program that now allows the government to pump billions into select U.S. companies – and why early investors are seeing explosive gains as a result.
Plus, they’ll share the name and ticker of the stock everyone will wish they owned six months from now. No matter what form the AI trend shapeshifts into next, the knowledge you gain from this event will prove invaluable to trading this breakthrough technology. To attend, sign up here for free now. Switching gears, Jason Bodner says crypto losses are hitting the stock market… Jason is our resident master of institutional money flows and heads up our growth investing service, Quantum Edge Pro. After more than a decade executing trades for some of the world’s richest investors at financial services firm Cantor Fitzgerald, he designed a system that singles out the fastest-growing companies backed by unusually large inflows of institutional money. I remember having lunch with Jason in 2021. At that time, he wasn’t following the crypto market and wanted to see what I thought of it. (Back then, I was known as the office’s “crypto nerd.”) After some debate, we concluded it would most likely remain a relative sideshow to the stock market and global financial system. The best crypto projects would accrue value, but not at a pace that would dwarf traditional finance. In some ways we were right… but in other ways, we were wrong. Crypto is relatively tiny still. It’s worth just $3.25 trillion to the stock market’s $69 trillion. But crypto has gained a foothold in the stock market by way of ETFs that hold crypto for you (similar to “paper gold” ETFs, for example). So they allow you to buy crypto through your regular stock investing account. And Jason says the recent downturn in crypto is impacting the stock market, in particular tech stocks. Some context: In case you didn’t see it, crypto has taken a big dive. The entire crypto market cap has shed $1 trillion in value since the start of October. The top crypto, Bitcoin, has sunk 25% from its all-time high. We warned you on Aug. 30 of the excesses building in the crypto market and, in particular, the crypto ETFs. And we encouraged you to scale out of your holdings on rallies. About one month later, Bitcoin saw a new all-time high. Since then, though, it’s down about 25%: 
Back to Jason, with a note he shared with me late last week… When big moves hit, especially sudden drawdowns like we have seen recently, forced liquidations rip through the system. Traders facing losses raise cash wherever they can – fast. And the most liquid pockets of their portfolios are large-cap tech and other high-flying equities. So crypto weakness spills into stocks not because fundamentals change, but because traders hunt for liquidity. It has a domino effect. A levered unwind in one corner of the market triggers selling in the strongest, most easily sold names in another. What Jason’s saying here is that when markets turn, the riskiest assets jump to the top of the sell list. In many cases, investors who are leveraged (borrowing money to buy stocks) are forced to sell assets to cover their loans. And this year, thanks to the popularity of crypto-backed ETFs, these coins became a sell target for institutional investors for the first time. Jason says more than 40% of the ETF outflows in the recent rout were linked to Bitcoin and Ethereum ETFs. TradeSmith indicators also gave you a good exit point. On Oct.14, our new Short-Term Health indicator turned bearish on Bitcoin at a price of $114,000. It now trades for $95,000 at the time of this writing – an 18% loss if you ignored that signal. Finally, a Snapback signal just flashed one of Jason’s best trades… Earlier this year as part of our Trade360 suite of trading tools, we introduced the Snapback signal. This trading signal fires when a stock has been smacked down with a big loss in the middle of an already painful downtrend. The idea behind it was to isolate the conditions where the sellers of a stock have done almost all the damage they’re going to do… then swoop in and buy shares before they rebound. Over 342 trades going back to 2015, the Snapback signal produced a gain 78.2% of the time, and the average return was 15.8% in just 21 trading days. During the recent bout of heightened volatility, I’ve been watching the Snapback scanner like a hawk for big trade setups. And on Friday, I spotted one on an AI favorite, Super Micro Computer. 
Jason has a fond history with this stock. After recommending it in September 2023, he recommended his subscribers sell two-thirds of their original position early the following year, locking in a gain of 149% and 258% on each third – then riding the rest risk-free.
Even with the swift selloff recently, his subscribers are still up 143% on their entry price. As for the Snapback signal, if SMCI were to follow the average return following a signal, the stock would trade just under $40 per share by Dec. 12. Investors could look to buy the shares here and plan to sell them by the end of the signal for a quick relief profit amid the tech volatility we’re seeing right now. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily P.S. The link again for tomorrow’s Stocks That Save America Summit is right here. I’ll be attending, and I strongly encourage you to as well. There are some cracks appearing in the AI trade right now in the traditional tech stocks. But for reasons you’ll discover at this event, the resource sector has the best chance of enduring the volatility ahead – especially when you follow the guidance of the two experts you’ll be meeting. The idea is to clue you in on the types of stocks that Washington insiders are preparing to target next. Based on the latest research from these industry experts, you’ll get the name and ticker of the stock everyone will wish they owned six months from now. Click here to save your spot at this special event. | 
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