Navellier’s “The #1 Investment for the Coming 5G Revolution” and “Most Disruptive Innovation in 45 Years” Pitches

Checking in on an oft-requested teaser solution for Growth Investor

By Travis Johnson, Stock Gumshoe, January 24, 2020

This is a teaser pitch that we solved back in May of 2018, but folks continue to ask about it… and our older article is getting pretty stale, so we’re digging in for an updated look today.

The headline of the ad pretty much says it all:

“The little-known Washington D.C. financial “think tank” that recommended Intel at 46 cents… Apple at 56 cents… and Google before anyone else, makes a SHOCKING new discovery…

“THE MOST DISRUPTIVE INNOVATION WE’VE SEEN IN 45 YEARS!”

Investorplace Media is not really a “think tank,” of course (when an ad copywriter puts a term in quotes, that means “this part is made up”), but it is a publisher that has built up a decent-sized business over the years, much of it on the back of Louis Navellier’s longstanding stature as an early “quant” in the world of investing punditry and advice. They’re selling the idea of this next breakthrough…

“Recently, Google’s billionaire CEO said it’s ‘more important than fire or electricity.’

“Robin Li, the CEO of Baidu, one of China’s biggest companies, predicted this new breakthrough ‘will have a much bigger impact on society than the internet.’

“And the MIT Technology Review says its ‘changing the world and doing it at breakneck speed.’

“This technology even has the full faith and backing of the U.S. government…

“Just recently, President Trump signed an executive order that calls for his administration to ‘devote the full resources of the federal government’ to help fuel this new breakthrough.”

Those are all references, broadly speaking, to artificial intelligence, or AI — which is really just the evolution of computing, and, depending on your definition, has been in use for a long time (Google’s search results use AI, so does your robotic vacuum cleaner, and the auto-driving assist features in your car as computers “learn”… it’s just that we’re not particularly close to the “Terminator” robot phase where machines “think” and act independently).

Then the hinting gets more specific:

“… just recently we uncovered an “off the radar” Silicon Valley company we’re calling the “Artificial Intelligence Master Key.”

The Tiny Device That Will Unlock the AI Revolution

“It’s a company that’s created THE essential AI component…

“What insiders are already calling the ‘secret weapon’ in the AI race.

“In short, it’s the ‘brain’ that all AI software platforms need to function, analyze, and interpret data. It’s known as the “Volta Chip”—and without it, the AI revolution simply would not be possible.

“You see, for AI to work, the technology needs to sort through and analyze TRILLIONS of data points, in fractions of seconds…

“Then make a ‘decision’ in that extremely narrow window of time.”

And that seems clearly to be a pitch for NVIDIA (NVDA), since NVIDIA’s latest GPU architecture, Volta is their next advancement over the prior Pascal architecture. And Navellier has teased NVIDIA as a “master key” stock before, though last time it was hinted at as the “Master Key for Cryptocurrency” (that was a couple years ago).

That’s been kind of surprising as an over-and-over teased stock, since NVDA shares dipped to a “Sell” grade of “D” in Navellier’s Portfolio Grader service last Fall, last time I looked at this ad, though it is now back to a “B.” That quantitative system, which underlies all of Navellier’s recommendations, is primarily about prioritizing analyst upgrades and estimate increases and similar upward momentum indicators, and NVDA has certainly been up and down and back up in momentum terms.

But, of course, selling a newsletter sometimes means using the best story that the copywriter can craft into a compelling sales pitch, and re-using that story until it stops working — not using the stock that is actually favored at that moment by the newsletter editor.

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It’s no big news that NVDA is the most often teased AI stock, though, what I was really interested in Navellier’s latest pitch was his 5G stock — since that didn’t look like it was one of the ones we’ve seen pitched over and over (Nokia, Xilinx, tower REITs, the filter companies, etc.) What’s the 5G “Master Key” they’re pitching?

More from their ad:

“Although the ‘AI Master Key’ is the ONLY investment you need to make a fortune in the AI revolution…

“We’ve uncovered another opportunity to make many times your money from the rise of AI…

“To help you capture this opportunity as well, I have an additional report I’d like to include….

“The second report is called ‘The #1 Investment for the Coming 5G Revolution.'”

5G is certainly connected to the rise of artificial intelligence, if only because the processing power required for AI is so great that it’s much more efficiently done by massive “supercomputers” in data centers — and that only works for real-time work (like, say, self-driving cars) if the communication networks those systems use to talk back and forth to the “brain” in the data center are much faster than is possible now… which, of course, is the promise of 5G: Fast networks, extremely low latency (“latency” is the “waiting for an answer” period… think of the modern equivalent of sitting and listening to your modem connect with AOL). Your self-driving car needs to have an NVIDIA supercomputer in it unless it can get millisecond-fast instructions over the air, and it’s more efficient to have the supercomputer be in a datacenter than to require one in every car, and the same is true, to a lesser extent, for all of the smaller “AI” installations across the Internet of Things and mobile devices.

What else do we get by way of hints for this 5G stock?

“5G is a unifying digital fabric that will enable billions of devices to connect and communicate with one another, all the time…

“Making the “Internet of Things” possible.

“This gives you another rare chance to make a LOT of money as the AI and Internet of Things revolutions unfold.

“And I’ve identified a little-known company at the center of it all.

“It has the technology that will help connect billions of “Internet of Things” devices to the new 5G network.

“Becoming one of the biggest beneficiaries of the coming 5G revolution.

“This is a secret AI play practically NO ONE in the mainstream financial community is paying attention to…

“And I believe it could easily help make at least five times your money over the next few years.”

That’s not much, right? Thankfully, in the email originally introducing the ad last May, Navellier dropped a couple other hints that we caught:

“The whole industry is shifting to 5G, and soon Apple will be along for the ride — but I don’t view AAPL as the right way to play 5G now. Apple has a history of making more money from services (like AppleCare and Apple Music) than from the devices themselves. And, anyway, it won’t deliver 5G phones until September 2020.

“Samsung and Huawei are further ahead on 5G — but instead of the companies that need 5G technology, I think more money can be made in the one that’s involved in the creation of 5G. That will be the stock that lets us cash in on that whole meteoric rise of the 5G market.

“In Growth Investor, we own a little-known electronics company — that is helping some high-profile clients move to 5G. Its customers include the top 25 telecoms…the top 25 tech companies…and 78 of the Fortune 100 companies.”

So what is it? Navellier is still very likely touting Keysight Technologies (KEYS).

No, we can’t call that a 100% match… but KEYS cites just those numbers in its marketing materials