☕️ Rush or flush? – AI’s next big market will be built shortly

Howdy! 👋 

It’s nice to have some green on my screen this morning after a couple of opening red sessions.  

I have no idea if that’ll stick. 

Depends on the Fed and whether what it does gives the high-speed crowd what they want. 

Me? 

I know what I want – hopefully you do too. 

There are three inescapable investing truths at the moment: 

1. There will be more profits in the next 10 years than in the past 50 combined. 
2. The world’s best companies are getting stronger, more irreplaceable and more valuable. 
3. Prices have divorced from value, something history shows very clearly is an opportunity for smart investors when it happens. 

Buy the best, ignore the rest.® 

Here’s my playbook. 

1 – The law of unintended consequences is about to make an appearance 

I sat down again with my good friend and colleague Scott "The Cow Guy" Shellady – so named for the colorful old-school cow-themed pit jackets he wears on air – who wanted my take on a few topics ranging from cybersecurity to the Fed and AI.  

I have a sneaking suspicion that the Law of Unintended Consequences is about to make an appearance but, as usual, that’s going to create an opening for smart investors who can keep their emotions out of the equation. (Watch) 

2 – Today’s Fed decision: raise, hold, or drop 

Later today, 12 people who have spent six weeks looking at spreadsheets will announce whether borrowing money will cost more, stay the same, or even drop a skosh. 

News outlets will treat it like a moon landing. 

Kevin Warsh has called the decision a “good family fight” but my take is that what’s happening is more akin to a bunch of super smart people most of whom have no idea how real money and markets work … arguing over data that’s more cooked than a Christmas goose not to mention badly outdated … and something global bond markets decided three weeks ago. 

The Fed’s job is to sound like it’s debating when the market’s already told you the answer. 

Watch yields, not podiums so you know how traders will act. And watch profits if you’re an investor… then you’ll know how to act. 

Keith’s Investing Tip: At the risk of sounding like a broken record, rates are for traders, but profits are for investors. Know who you are, so you’ll know what to do even if Club Fed doesn’t. 

3 – Buy Micron… for its dividend???!!! 

I am asked frequently if Micron's a "buy." 

Yes, imho. 

For its dividend. 

Huh? 

Most investors will never make the connection. 

Micron pays $0.15 a share, quarterly. That's a yield of roughly 0.07% – nothing to write home about on its own. But the board just hiked it 30% back in March, from $0.115 to $0.15, right alongside a quarter that saw revenue nearly triple. 

My bet? 

I think there’s a good case to be made for another raise this quarter or next. 

Here's why. 

Micron just guided fiscal Q4 revenue to $50 billion, plus or minus $1 billion – another record, up from $41.46 billion in Q3. And on the earnings call, management said that starting Dec. 9, 2026 – the second anniversary of its CHIPS Act agreement – it intends to increase capital returns to shareholders with a stated goal of eventually returning 100% of excess cash over time. 

That's about as close as a management team ever gets to telling you what it’s got on tap. 

Companies like Micron don't hand out dividend hikes because their bean counters say so.  

Dividends are a promise from management who very clearly has an idea of what's coming next even if most retail analysts covering the company haven't got a clue. 

Keith's Investing Tip: A big dividend raise from a growth company isn't a reward for patience – it tends to be a preview of what the next few years already look like on the balance sheet as the C-Suite sees it. Invest accordingly.  

Speaking of which, if you have no idea which companies to buy, when or how, you might enjoy One Bar Ahead® where that’s the kind of information, education and insight I share with smart investors around the world who tell me regularly that it’s changed their lives. 

4 – Zuckerberg: Me, too

Nvidia CEO Jensen Huang was blunt this past weekend saying, “it’s a false choice” when it comes to reining in AI because market forces already exist and that the industry doesn’t need new laws or regulations. Then he went on to argue that speed and safety are not mutually exclusive because companies should “take a pause and make sure you get it right” if there are any doubts. 

I agree, not that that’s a surprise or jaw-dropping. 

What catches my attention is that El Zucko has surfaced saying that he’s siding with Nvidia rather than Anthropic because he believes that “trust and alignment are quickly becoming the most important capabilities that will differentiate agents and models.” 

Becoming???!!! 

C’mon, Mark. 

That’s as rich as it gets from a guy whose products were just branded a public nuisance in New Mexico, who has just settled for $17 billion to guarantee Meta’s privacy when everybody’s transparency is how he makes his money. 

Zuck also claims that Meta delayed releasing Muse, its AI tool, for months over safety and security concerns but knowing what a publicity hound he appears to be, I find that hard to believe… but that’s just me. 

Still, my guess is the stock hits $1,000 by mid-2027 anyway in which case I’ll tip my hat again to everyone who owns it. 

I won’t. 

Keith’s Investing Tip: Owning a stock and trusting the CEO are two entirely different decisions – don't let the first one talk you into the second. 

5 – The next big AI investment trade will be built shortly 

One of the biggest challenges and opportunities is defending data – something we’ve been talking about for a few years now. 

Others are waking up. 

CNBC is reporting that AWS says it can’t recover resources and data stored in one of its UAE “availability zones” six months after Iran attacked it for supporting the US military. (Read) 

My thoughts turn to UAE Stargate, a 5-gigawatt, 10 square mile campus that is supposed to help meet AI infrastructure demand worldwide in addition to just serving the region’s growth. Oracle, Cisco, OpenAI and Nvidia are all key partners. 

Most people are still thinking in terms of drone defense, missiles and so on, but I think that there’s about to be a huge jump in blast resistant design, construction and installation – a massive and fundamentally different engineering problem. 

Unfortunately, there's no global supplier… yet. 

I’ve got my eye on specialty materials, structural engineering and hardened-infrastructure companies because I think this could be the next big construction market worldwide. 

Keith’s Investing Tip: The best investing opportunities often show up as problems first – long before anybody recognizes what’s happening and before somebody builds a company to solve ‘em. 

Bottom Line 

Our job as investors isn’t to guess where the markets go next.  

It’s to find great companies and recognize the signals needed to get you and your money there first.  

You got this — I promise. 💯 

As always, let’s MAKE it a great day. 

Keith 😀