January 28, 2025
How to Profit from Renewed AI Push
Dear Subscriber,
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| By Gavin Magor |
As with any transfer of power in the White House, questions surround what policies newly-elected President Donald Trump will and won’t implement over the next four years.
He signed more than 200 executive orders on his first day and promised many more to come.
While Trump won’t be able to please all Americans, AI-focused technology companies are jumping for joy … and so should investors worried that stock gains might dry up or take a break this year.
One of his potential tech-boosting goals is to lower the corporate tax rate to, or even below, the 15% he instituted in his first four years.
Ever since 2017 when the U.S. cut that rate by 14%, corporate tax revenue as a share of the GDP increased by 40% (from 1.5% to 2.1% in 2023). Revenue per capita also nearly doubled from $870 to $1,700.
Other goals include fewer restrictions and regulations, along with possible annual tax write-offs for R&D spending.
This could be favorable for all-sized businesses, both private and public, especially technology firms.
However, it’s something President Trump already did that has many tech company CEOs feeling confident about the future of AI: He created a new Stargate AI infrastructure project with OpenAI and SoftBank.
It shows his commitment to winning the AI race against China and the rest of the world. Even with the news that the Chinese AI model DeepSeek can increase AI efficiency without as many AI chips, it only boosts the profit possibility.
It just means more AI development and the need for competing models.
The Stargate project calls for $100 billion in initial investment to build AI infrastructure and up to $500 billion over the next four years.
SoftBank, OpenAI, Oracle (ORCL) and Metagenomi (MGX) are the initial equity funders. Arm Holdings (ARM), Microsoft ( MSFT) and Nvidia (NVDA) are technology partners.
But it’s not just Big Tech, a.k.a. the “Magnificent Seven,” that stands to benefit.
AI infrastructure encompasses a boatload of technologies required to build AI-ready data centers, including real estate, software, hardware, cooling solutions, chips, design, data storage and much more.
Analysts expect President Trump to aggressively court more AI investments in the U.S. with the China tariff negotiations lurking in the background.
Many companies will be in the running for a piece of the $500 billion-plus market for AI data centers in North America.
Technology and the ongoing development of AI tools are becoming bigger priorities than ever for the efficiency of businesses and future of our national defense.
The additional push in AI also bodes well for those involved in satellites, chip manufacturers and a wide range of other companies.
If you’re looking for broad exposure to AI, consider the Invesco QQQ Trust ETF (QQQ).
It is an actively managed ETF tied to the Nasdaq-100 Index and holds stocks from the Mag 7, including AI giants like Nvidia, along with semiconductor leader Broadcom (AVGO).
It is poised to capitalize on the rising demand for AI infrastructure as semiconductor companies like Broadcom gain prominence.
QQQ is also following hot growth trends in cloud computing and computer hardware, which, along with AI, make up 40% of the ETF’s value.
I consider it one of the best technology ETFs you can buy due to its composition.
There is some risk associated with its level of concentration, though.
If those mega-cap tech stocks falter, the Invesco QQQ will surely follow. During market downturns, the Invesco QQQ has historically crashed harder than the S&P 500.
Still, volatility is arguably the price of stellar long-term performance. The Invesco QQQ has handily outperformed the S&P 500 over the past decade by 1,100% vs. 651%.
And after yesterday’s major dip in AI stocks due to the DeepSeek news, now might be another solid entry point.
ETFs focused on AI and technology offer a good starting position for those looking to jump on the bandwagon.
With $175 billion reportedly awaiting deployment into AI projects, the U.S. should attract significant global capital.
Cheers!
Gavin
P.S. Of course, the right individual AI stocks will do far better than any fund that holds so many. That’s why I urge you to attend a special tech summit next week.
It’s called “The $35 Trillion Trump/Musk Tech Alliance Summit.” And it’s free to Weiss Ratings Daily readers as long as you register today. You can do so by clicking here.
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