Pitchmen are always on the hunt for the upcoming big product. They often claim to have insider knowledge and connections that allowed them to discover a small company that could benefit from the product’s popularity. For example, they have been doing this for many years alongside Apple, relying on rumors from “whisperers” in Chinese production facilities and people who buy Apple products during the open day to attempt to determine the components used. Sometimes this approach works, However, more commonly than not, it’s just a covert theory.
For instance, when a former employee of a company starts a new business, pitchmen might claim that this person has an advantage in securing a contract to supply parts for the upcoming big thing. However, this strategy rarely leads to long-term success. Despite the breathless pitches of pundits like Luke Lango, Ray Blanco, and James Altucher, the stocks they recommend usually only experience a brief boost in value due to the hype generated around them.
Novonix’s stock has dropped below the levels it reached at the time Ray Blanco predicted it would become a key partner for Tesla in 2020 – 2021. Similarly, Fisker (FSR), another company Blanco had labeled like the “next big thing” in the car industry, is now facing the threat of bankruptcy. Aeva (AEVA), which Luke Lango once identified as a crucial “iCar supplier,” has seen its value plummet by 80%, joining the ranks of LiDAR companies that debuted on the stock market after merging with SPACs in 2021 but have since faced significant declines. Moreover, Kopin’s (KOPN) recent earnings call raised doubts about Altucher’s assertion that the company would be supplying essential components for Apple’s Vision Pro.
These are only a handful of instances of analysts who often make grand claims about the “secret” suppliers for the upcoming big breakthrough. It’s a common strategy to sell pricey “upgrade” newsletters that promise to reveal the secrets to immense profits. What’s particularly interesting is that these subscriptions are almost always nonrefundable. There are certainly more examples, but you get the gist.
Now, James Altucher is focusing on the latest trend – NVIDIA, the most in-demand stock on the market right now. NVIDIA’s chips are being sold at elevated prices to drive AI innovations, making it one of the most talked-about stocks with one of the most exciting stories in the market. This week, NVIDIA is organizing its GTC developers conference, where we can expect an influx of announcements, partnerships, and groundbreaking news. CEO Jensen Huang will give the keynote at 4 pm today, with the conference running through Thursday.
It’s important not to rush into investments without taking the time to gather all the relevant information first. We maintain a skeptical stance on the flashy stories often tied to stocks. While these stories may seem thrilling and get some initial attention, it’s crucial to approach them with caution before committing your hard-earned money. In the thick of things, we might be swept up in the excitement and urgency of a “hot tip,” which could harm our retirement savings. So, the best approach is to carefully listen to the entire pitch, gather the details, and only then decide whether or not it’s the right investment.
That’s my starting point of caution, but naturally, I’m curious about this particular stock too. Let’s take a deeper examine what is the potential investment truly is entails, assess the potential for success, and figure out if we should anticipate a major Success on the 21st of March. Are you ready? Here’s what the subscription form has to say about it:
Much like Altucher’s exaggerated promotion of Apple’s next-gen headset a few months back, this new offer is tied to The Paradigm Press collective—a package deal of newsletters created by Altucher and the Paradigm Press team partners, Ray Blanco, Jim Rickards. The cost for this is $2,495 per year, and while they advertise a “full satisfaction promise,” it’s important to note that this doesn’t mean a refund. Instead, you’ll receive a “credit” which can only be used to purchase other newsletters from Paradigm Press. In other words, after handing over the $2,495, you won’t receive a refund, regardless of how the stock pick turns out.
What else can we glean from this pitch?
The spotlight is on NVIDIA’s upcoming GTC Conference, which Altucher describes as the highly buzzed-about AI occasion on Silicon Valley,” promising “the most groundbreaking tech announcement in our lifetime.” He claims that on March 21, this announcement will hit, creating a media storm and sparking Wall Street to pour billions into what he believes will be the next big leap in AI. The big reveal, according to Altucher, will be NVIDIA’s brand-new AI chip, which he dubs the “XChip.”
NVIDIA’s new AI chip, the B100, is generating a lot of excitement. Based on the Blackwell architecture, it’s set to replace the now H100, which uses the Hopper framework, and the upcoming H200 chipset. Investors are eagerly anticipating the B100’s release, hoping it will make a big impact. It’s expected that more details about the B100 will be revealed at NVIDIA’s GTC Conference, either during today’s main presentation or in a later session. Considering that Jensen Huang is likely to personally introduce the new chip, it’s reasonable to expect the B100 to be showcased today. However, Altucher suggests that the key announcement won’t happen until March 21, the final conference day.
The reference to “1,700 times smaller” in comparison to NVIDIA’s market capital of around $2,200,000 is a bit misleading, as it’s an abstract figure that doesn’t align with traditional valuation metrics. If we try to make sense of it, we could interpret this as implying that the company in question would have a market capital of around from $1 billion to $2 billion, which is still relatively small in comparison to NVIDIA. Later on, Altucher mentions the company being a “billion USD company” multiple times, which could indicate that he was referring to a firm in that ballpark, perhaps when he made the assessment a few months ago.
If he had based his judgment on figures from early January, then to be “1,700 times smaller,” the company would need to have a market capital of roughly $700 million. So, while the exact number is tricky, the takeaway is that this is indeed a smaller company in the market.
What’s next in this pitch? What other aspects should we consider?
Doug Hill, a colleague of Altucher, referred to it as a small company that will have a specific role in the AI infrastructure project.
And the kind of FOMO-driven hype that can easily lure people in, even though they hesitate to acknowledge it…
It’s crucial to remember that the world of investments is unpredictable, especially with the growing interest in artificial intelligence. For instance, rumors recently spread about Apple possibly licensing Gemini AI by Alphabet platform for iPhone. This speculation alone sufficed to increase Alphabet’s market value by $100,000,000,000 in premarket trading. But we must remain cautious—investment trends are often subject to change and can be swayed by stories, trends, and headlines rather than solid fundamentals. As a result, what seems like the next big thing today can quickly fade away once a new headline steals the spotlight.
So, which company is James Altucher referring to in his ad? Unfortunately, there are not many concrete clues in his description:
Despite an email calling it a “small semiconductor company” this doesn’t seem to be an accurate description. It’s more likely a technology consulting or hardware firm, possibly involved in Artificial intelligence initiatives. or simply acting as a reseller. The exact nature of the company remains unclear.
NVIDIA collaborates with an extensive range of partners worldwide—about 1,000, in fact. This list features prominent tech contractors, consulting firms, and smaller enterprises focused on IT, hardware, distribution. Key players like SoftServe, Lambda, WWT stand out in this network, along with several others targeting regional markets.
Some candidates that might fit the clues given are ePlus, SMART Global, PC Connection, Perficient, and including GDS Holdings if we expand the search to China. However, none of these companies saw the kind of big movement expected from a major stock teaser. This makes it unclear whether the $2500 offer generated enough interest to have a noticeable impact. The clues provided weren’t detailed enough for many—including myself—to make a definitive guess.
From the information I’ve gathered, only one company stands out for its public connections to both the Energy, Defense Departments., as well as its collaborations with Tesla, Meta Platforms, all of which have been highlighted in press releases. That company is SGH, valued at around $1 billion. Although not a leading force in the industry, the company provides services leveraging NVIDIA’s hardware for assist in AI project development. They focus on constructing servers powered by NVIDIA chips and offer consulting services, platform solutions for advanced computing systems. With nearly $1 billion in annual sales and a market capitalization in a similar range, the company has found success within its niche. Additionally, it holds a special status as a top NVIDIA partner, having earned multiple “Partner of the Year” awards across different categories.
SMART Global doesn’t necessarily shine in the financial spotlight. Its revenue has remained relatively consistent in the last five years, with earnings showing little movement until a decline last year. Analysts tracking the stock predict aevised earnings of around $1.17/share for this year, with an optimistic forecast of $2.1 next year. My choice of this company isn’t driven by personal preference, but rather because it seems to align well with the limited information we’ve been provided.
If SMART Global is poised for significant growth, it will likely stem from its Penguin Solutions division. This segment of the company specializes in the design, deployment, and management of large-scale AI and high-speed computing systems. To date, it has deployed more than 50000 GPUs in collaboration with top AI companies.
SMART Global has a fascinating history, operating as a conglomerate in the semiconductor space for over 25 years. It has undergone several acquisitions and sales, including two IPOs. Initially focused on memory chips, including owning manufacturing plants in Brazil, the company pivoted in the last five years following its acquisition of Penguin Computing. SMART also expanded by acquiring Cree’s LED business, maintaining a presence in multiple sectors. However, its primary focus today is on driving service revenue, particularly through its “Smart System Innovations” division, which encompasses Penguin. Last October, they showcased a strong presentation of their Penguin business.
Ultimately, it’s hard to say for certain whether SMART Global checks all the boxes based on the vague clues Altucher has shared.
I see what you mean—there’s a company acting as an intermediary, managing thousands GPUs. However, when it comes to landing massive deals, they don’t really make a splash. Big players like Dell, HP, Microsoft, Amazon, Alphabet are likely to snatch up far more GPUs. Still, this company remains crucial, serving as many intermediaries that assist smaller firms in scaling up their AI hardware leveraging NVIDIA products. If you’re interested, it might be worth looking further into this company while waiting Jensen Huang’s presentation. Enjoy the rest of your day!
