Happy Saturday readers. I’m senior reporter Phil Rosen.
As a journalist, I’m always keen on interesting conversations — especially when I get the chance to share them in this newsletter.
Today, I’m eager to share my conversation with the CEO of a markets analytics platform that leverages the power of artificial intelligence.
Jan Szilagyi is the chief executive officer and cofounder of Toggle AI. This conversation has been lightly edited for length and clarity.
Phil Rosen: Tell me, with all this hype around artificial intelligence this year, how’s business?
Jan Szilagyi: We’ve seen a big increase in business and a huge spike in inquiries to Toggle AI. I would say we’ve seen a dramatic, three- to four-fold increase.
What do you make of the recent boom in AI interest among investors? A handful of obscure companies have made triple-digit gains in 2023.
JS: It’s quite unlikely that we’ve even tested the technology fully, or that people have been able to extrapolate anything because there’s so little to hang your hat on.
I do think a lot is going to happen, but right now you’re seeing people basically buying into the sector broadly, without understanding the full implications and that not all AI is created equal.
Ultimately, I don’t think AI is going to be a fad though. I think it’s going to be something that becomes table stakes.
How would you recommend investing in the AI trend?
JS: I think we have not yet seen any meaningful implementation of this latest technology in applications that people would use. The only ones that are currently seeing the benefit of the technology are the owners of the infrastructure, like Microsoft.
If you want to invest in AI, the best potential is in the infrastructure companies — Microsoft, Google, Amazon.
If you think that there is going to be greater usage of a host of tools and versions of ChatGPT, then these are the companies that will see the biggest spikes, at least in public markets.
And here are the top stories from markets this week:
1. Here are 18 stocks to buy right now, according to Goldman Sachs. The firm said that this year picking specific names is critical because major indexes will stay flat, and these companies are poised to stand out. Plus, the strategists named seven stocks to short for maximum market upside.
2. The Mormon Church has a $100 billion investment arm. And according to its most recent 13F filing, that includes a $44 billion stock portfolio. These are the Church’s top 10 holdings.
3. No one seems to care that a key recession indicator is blaring louder than it has in decades. Investors are still piling into the market and ignoring the New York Fed’s Recession Probabilities model, DataTrek cofounder Nicholas Colas wrote. The model shows there’s a 57% chance of a recession in the next 12 months — and it has a perfect track record whenever that figure breaches the 50% mark.
4. “Big Short” investor Michael Burry built new stakes in Alibaba and JD.com over the last quarter. He swapped out all but two of the holdings in his US stock portfolio, according to a Tuesday SEC filing. His firm, Scion Asset Management, also snapped up 100,000 shares of MGM.
5. An ex-Gazprom official said decades of the Russian gas giant’s work has been “flushed down the toilet.” The warring nation’s natural gas exports have been hampered by the impact of the Ukraine war and sanctions. This year, Moscow’s export revenues are expected to be cut in half.
6. US home prices are heading for a further drop this year. A board member for the Mortgage Bankers Association told Insider that mortgage rates are set to decline as the year goes on: “I anticipate on a national level, this year, we’ll probably see, four to 6% price decrease.”
7. Warren Buffett’s Berkshire Hathaway made an unusual move in shedding most of its stake in TSMC soon after buying it. Shares of the Taiwanese chip-maker tumbled on the report that Buffett’s conglomerate sold roughly 86% of its investment last quarter. Berkshire Hathaway had first disclosed its $4.1 billion position in November, meaning it broke from its usual habit of holding investments for years.
8. Drake scooped up $512,000 in bitcoin profits from a Super Bowl bet. The star rapper bet a total of $965,000 in bitcoin through a partnership with Stake, losing six of his seven bets. His most lucrative move was his $700,000 wager on the Kansas City Chiefs to win the game.
9. This 35-year-old real-estate investor bought 58 single- and multi-family homes during peak interest rates of 2022. Get his top four tips for locking in the lowest possible rates and beating the bank.
10. Here’s where to put cash ahead of an explosive rally for small caps. BMO Capital Markets shared its 15 favorite stocks to buy as larger companies have underperformed. See the full list.