3 Companies Under Threat From the Economic Singularity Remember when you had to race to Blockbuster to grab the latest movie before someone else rented it? Some folks under a certain age will have no idea what I’m talking about. The whole idea feels ancient now – and that’s the point. Blockbuster didn’t die because people stopped watching movies. It died because a new technology came along and changed everything. Netflix, Inc. (NFLX) rewrote the rules, and Blockbuster couldn't keep up. It’s as simple as that. Today, there’s just one Blockbuster left – in Bend, Oregon. It’s a tourist attraction now. A museum piece. A reminder of what happens when you ignore the waves of technological change. 
Blockbuster isn’t alone in that dustbin of history. Eastman Kodak Co. (KODK) failed to adapt to digital cameras. BlackBerry Ltd. (BB) clung to keyboards while the world moved to touchscreens. You see where I’m going with this, folks? I bring this up because we are seeing the same thing happen now – only faster and with even greater magnitude. The disruptive tech this time? Artificial intelligence. What makes AI different is its unprecedented velocity. The disruption these companies experienced over years now happens within months. In fact, my proprietary system is signaling that we’re entering a whole new era of the AI Revolution. In short, we’re entering a new era I call the Economic Singularity – where AI begins to fundamentally alter the way work is done – and how wealth is created. This also means that portfolios built on yesterday’s “safe” names are at even greater risk of terminal decline as this plays out. In fact, it’s already flashing red on several well-known names that are struggling to keep up with this wave of innovation. So, in today’s Market 360, I’m going to share three companies that are under real threat from AI. Then, I’ll tell you where to find the companies that my system says are ready to dominate. | Recommended Link | | | | Musk’s AI move wasn’t just restructuring – it’s the first tremor of a coming financial quake. March 10 started a shift that could divide America’s economy. Louis Navellier created a critical briefing on what’s next – and how to protect your wealth. Watch it now before the window closes. |  | | 1. An Education Tool Gets a Failing Grade Not long ago, if you were a student looking for homework help or cheap textbook rentals, Chegg, Inc. (CHGG) was the way to go. Not anymore. Chegg’s entire business model is being steamrolled by AI. Students are now using free tools like ChatGPT instead. These tools can write full essays in seconds. They solve problems instantly. No need to pay Chegg. Now, Chegg is feeling the heat and has to make some tough decisions. In fact, on Monday, May 12, Chegg announced that it will be cutting 22% of its total staff, marking its third major layoff in less than a year. But Chegg isn’t going away quietly. In February, Chegg filed a complaint against Alphabet Inc. (GOOGL), claiming that Google AI is siphoning off its traffic. Regardless, the writing is on the wall, folks. Chegg has been slow to adapt to AI and likely won’t recover. It currently holds a Total Grade of “F” in my system – making it a Strong Sell. 2. A Gallery With No Visitors Let’s say you need high-quality images for a marketing campaign, website or magazine. Up until recently, the best people for the job were Getty Images Holdings Inc. (GETY). Need a photo of a famous person or an important cultural event? Chances are Getty had it. You just had to pay a handsome licensing fee, of course. That’s changing fast. Generative AI has made it possible for anyone to create custom images on demand. No licensing fees, no waiting, no need for Getty. Now, Getty is recognizing the need to change with the times. It’s promoting “generative AI technologies and tools trained on permissioned content.” In other words, it’s slowly stepping away from its original business model. But the financial picture is clear: Customers are moving on. Margins are shrinking, and its best days are likely behind it. My system gives Getty a D-rating, meaning investors would be wise to look elsewhere. 3. The Court Is In Session Starting a small business used to mean hiring a lawyer and navigating a maze of paperwork. But then, LegalZoom.com Inc. (LZ) came in and made the process simpler and cheaper. It was a huge weight off the shoulders for small business owners. However, AI is making it even easier. And that’s put serious pressure on LegalZoom. That much is clear in analysts’ latest projections. They’re calling for a 5.5% year-over-year decline in LegalZoom’s business formations for the first quarter of 2025. Competition is rising, too, with rivals like ZenBusiness and North West Registered Agent offering AI-powered services at lower prices. LegalZoom’s management recognizes AI’s threat and is undergoing a strategic review, looking to pivot toward a subscription model aimed at higher-value customers. That strategy is working so far, with net income up 115% year-over-year to $30 million in 2024. The fundamentals may be there, but the market is looking elsewhere. Right now, LegalZoom earns a C-rating. That makes it a hold, so the jury is still out on this one, folks. Where to Find the Winners The bottom line is that AI is not a distant threat. It’s changing businesses right before our eyes. Many of them are going to come face-to-face with a harsh reality. They’re simply not built for the Economic Singularity. The sad truth is there will be losers from the transformation that is taking place. But we can’t stop the waves of change, folks. So, while I want you to be prepared for what’s coming – I also want you to profit. Make no mistake: The Economic Singularity will be a massive reset of who wins and who loses in this market. It also threatens to make most of the work regular Americans do obsolete. It may not feel this dramatic yet. But I assure you, the folks at Blockbuster didn’t feel threatened at first, either. Nor did Blackberry or Kodak. Rest assured, when the dust settles, the impact will be massive. And the companies that harnessed AI most effectively will be the next market giants. The market doesn’t reward those who wait for certainty… it rewards those who act on insight before it becomes obvious. That’s why I created a special report for my Growth Investor subscribers called The Singularity 7: The New Exponential Wealth Machines of the AI Revolution. These are the companies my system has flagged to lead the next phase of the AI Revolution. They’re using smart tools to grow faster, scale more efficiently and generate growing revenue and earnings. Click here to learn more and gain immediate access to the special report. Sincerely, | .png)
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