Dear Reader,
The new numbers of Americans filing for unemployment benefits are hard to comprehend. Over the last week, 3.28 million people filed for unemployment. For perspective, this is nearly five times more than the previous record high.
And what does the market do? It rallies hard.
As I write this midday, the S&P 500 is up almost 5%. Clearly people believe that the $2.2 trillion coronavirus stimulus package approved by the U.S. Senate is going to be effective. The numbers are so large that they are difficult to comprehend, so I’d like to put them in context.
The total revenues generated by the U.S. government in 2019 were $3.462 trillion. That includes everything from income taxes, corporate taxes, excise taxes, customs duties, and other smaller line items.
That means that this single stimulus package is equivalent to 63.5% of the annual revenues of the U.S. government in 2019. Wow… And I wouldn’t be surprised to see that $2.2 trillion number increase from here.
Let’s turn from here to our insights for today…
Numbers coming out confirm what we already knew to be the case – COVID-19 is ushering in a societal change that is slowing down the internet. Believe it or not, this is great news for us as tech investors. More on that in a minute. But first, let’s look at what’s happening…
Nokia just released data saying that most wireless networks around the world see 30–45% growth in traffic over a year. But peak usage has jumped 20–40% over just the past four weeks.
These numbers are beyond crazy. And it’s all because people are staying home. Videoconferencing traffic – for both work and socializing – has spiked 300%. Gaming traffic has exploded 400%… probably because the kids are staying home from school.
To put this growth in context, network data traffic would more than double every 12 months if this persists. We are talking about the definition of exponential growth. And it will overwhelm networks all over the world.
As a result, data centers are building out additional infrastructure, as are wireless carriers. And the European Union (EU) has gone so far as to ask companies like Netflix, Disney+, Zoom, and Facebook to reduce the quality of their video. The EU hopes this will relieve some of the strain on its networks.
And here’s the big takeaway – business is booming for many technology companies right now.
Any company providing wireless services has seen a massive spike in demand. And any company producing the products used by data centers, wireless networks, and 5G infrastructure is getting slammed with new orders as we speak.
For these companies, sales are going up, not down. Yet their stocks have pulled back. That’s a massive opportunity for savvy tech investors.
And guess what? This shift to remote work and remote entertainment will have a lasting impact.
For one, I predict we’ll see a second surge in COVID-19 cases in the fall. It won’t be as bad as the surge we are experiencing right now. But it will be enough to prompt many people to continue to work and play remotely. We can expect these modified behaviors to persist through the 2020–2021 winter in the northern hemisphere.
And the bigger picture is that remote operations just make sense for certain industries anyway. The transition to a more remote-based workforce was inevitable. COVID-19 was just the catalyst. We’ll continue to see elevated network use even after the virus is just a memory.
I know investing after the recent volatility may seem counterintuitive. But the world needs increased bandwidth and 5G wireless network services now more than ever.
That’s why I’ve been preparing my readers with a “best of breed” collection of 5G and cloud-based companies. They are all trading at “bargain” valuations right now. To add these companies to your portfolio today, you can go right here.
I have long said that Tesla has a tremendous strategic advantage over its competitors because it, at its core, is not an automotive manufacturer. Tesla is one of the most advanced artificial intelligence (AI) companies on the planet. It is essentially an advanced software and computer systems company that happens to manufacturer cars (and soon trucks).
That’s what gives Tesla its edge. All Tesla cars on the road feed sensor data back to the company. Tesla then feeds that data to its AI, making it smarter. That improves the self-driving technology. Tesla can upgrade its entire “fleet” of vehicles with new software as frequently as it wants to.
To date, Tesla cars have driven over three billion miles in Autopilot mode. That’s three billion miles’ worth of data feeding back into Tesla’s master AI. This is why Tesla has such a dramatic lead in the self-driving industry.
And recently Tesla applied for a new patent that caught my eye. This patent gives us insight into Tesla’s AI strategy going forward.
The patent outlines a method for Tesla cars to analyze their sensor data using deep learning AI technology. This will allow each car to determine if its data is useful to the network. If it is, the car will send the data back to Tesla to train the master AI. And if the car determines that the data is not useful, it will discard it.
This is an incredibly smart move. Here’s why…
For example, Tesla cars have seen well over a billion stoplights at normal T intersections. The master AI has already learned what typically happens in that situation. So using resources to analyze more normal examples isn’t going to add value to its core AI-powered self-driving software.
That’s where Tesla’s new method comes in. Instead of feeding data to the master AI that it doesn’t need, the cars will filter it out. But when the car encounters a unique scenario, it will send that data back to Tesla immediately.
Tesla will train its master AI on this new data, then it will push out software updates to the entire network of vehicles. That will enable all Tesla cars to benefit from each car’s unique experience. It’s a brilliant system.
This new method will further advance Tesla’s competitive advantage in the industry. And it’s a great example of how we are starting to deploy AI at the edge of networks – the car, in this case – and not just in the cloud.
Tesla’s self-driving technology has advanced to the stage that it is working on these kinds of nuanced technological details and optimization. These kinds of clues are what we look for to understand how close a technology is to broad consumer availability. We’re almost there… This is going to be a big year.
This is just dumbfounding…
A cybersecurity firm just discovered an unsecured database comprising extremely sensitive data on more than 200 million Americans. The database contained names, email addresses, phone numbers, birthdays, credit ratings, mortgage records, tax records, household demographics, and donation records.
We’re talking about everything a cybercriminal would need to break into financial accounts or engage in full-blown identity theft. It was all just sitting there, unencrypted on a Google Cloud server.
And here’s the kicker…
After further analysis, the cybersecurity firm identified certain codes in the data that are specific to the U.S. Census Bureau. Much of this exposed data appears to come from the government organization that claims to ask only basic demographic questions for benign purposes.
I have to admit that I’m fired up about this. I got my 2020 Census letter last week. It begins:
Dear Resident,
This is your invitation to respond to the 2020 Census. We need your help to count everyone in the United States by providing basic information…
Okay, that seems reasonable enough. But look at how it ends:
The census is so important that your response is required by law, and your answers are kept completely confidential. If you do not respond, we will need to send a Census Bureau interviewer to your home to collect your answers in person.
Wait a minute. I thought this was simply an invitation?
And look at the statement I highlighted in bold. If our answers, along with our most sensitive documents and records, were just sitting unsecured on Google’s Cloud, they were not kept confidential. They were just waiting for anyone with an internet connection and some decent computer skills to find them. (Some unknown party has since erased all the records.)
If this data originated from the U.S. Census Bureau, it would appear the “basic information” claim is not true. It would mean that the U.S. Census Bureau is collecting everything about us it can get its hands on and creating a larger profile on U.S. citizens and residents. What’s going on here?
Now, it hasn’t been confirmed yet that this was the Census Bureau’s doing. But even if some other organization is responsible for this data collection, that means the Bureau has failed to keep our data confidential and secure.
I suspect there is more insanity behind this data leak, and now that it is out in the public, the U.S. Census Bureau is going to have to respond to the situation. I’m going to keep my eye on this one.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. I am also fired up about the way the mainstream media has covered the COVID-19 outbreak.
To be blunt, I believe the coverage has mostly been fear-based and one-sided. The media hasn’t objectively reported the facts based on data. It’s been more interested in sowing fear and panic. Worse, it has provided very little useful information to people thirsty for answers.
For this reason, I’ve put together an emergency briefing on ways to protect your health and your wealth during the COVID-19 pandemic.
In this briefing, we smash some of the most dangerous myths about this coronavirus that you may have seen circulating from disreputable sources. It also reveals the one critical item everyone in your family should have – and it’s not a surgical mask.
My briefing provides a list of the 10 stocks every investor should avoid during this crisis, too. It details the one biotech company that could lead the race to provide a treatment for COVID-19. And it reveals the top tech stocks every investor needs to own right now – even during this market volatility. While many companies are suffering, others are prospering.
I believe this information is absolutely critical right now. To access the briefing, simply go here.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
