6 Investment Megatrends for Explosive Profits Part 1 of 3

Hi guys. So, in this three-part video, I'm going to focus on what are the six most powerful investment mega trends that are poised to deliver double-digit gains in the next 10 to 20 years. Because once we know this, we know how to best position our portfolio to beat the market.

Let's find out more. Over the last seven years, my investment portfolio has delivered over 260% return versus the S&P 500 that has delivered 170% return. This is despite going through a major recession, COVID 19 pandemic, two bare markets, and a very close bare market last year.

And the key to doing this is, I keep saying, not just owning the highest quality businesses with the strongest economic modes, but even more importantly is to make sure that you invest in businesses that are in long-term growth trends or we call them mega trends. So what are mega trends? These are trends driven by long-term structural changes.

So we call them secular trends which are different from cyclical trends which are basically they go up and down with the business cycle. So these are multi-deade themes where demand and spending are likely to grow regardless of the short-term macro situation. The first investment mega trend is pretty obvious.

You guessed it. I've been talking about this for the last 3 years. That's right.

This is the AI and robotics mega trend. So why is this a long-term secular mega trend? Because as you know AI, AI, agentic AI, uh large language models are being embedded into every sector of the economy.

Embedded into manufacturing, healthcare, finance, logistics, energy, and defense. And all this drives structural productivity gains for all these businesses. And it's very sticky, high switching costs.

Once companies integrate it, they're going to stick with it and they're going to grow it. And businesses are now forced to automate because of aging populations, labor shortages around the world, and of course, global competition. You have to embed AI in order to compete in the world right now.

And the global AI market is projected to grow at 26 to 30% compounded annual growth rate or keer to at least 2033. Now, one of the most common questions obviously is what are the best AI stocks to invest in? Now AI stocks again is a very broad topic but you can divide it into two types of AI stocks.

You have got first of all what we call the AI enablers and you've got the AI adopters. So AI enablers are companies that make AI possible either by providing the infrastructure hardware or the infrastructure software and services. So in terms of infrastructure hardware obviously the main ones would be the accelerated chips or the semiconductors and those have done the best in the last uh 3 years.

So for example semiconductors like your Nvidia, your ASML, your Broadcom, your TSM. So are these semiconductor stocks already too expensive? Have they run too far?

Is there any more growth left in them? Well, let's take a closer look. So if you take a look at for example Nvidia, you can see that the latest intrinsic value, you can check it out from stock oracle is $215 and currently the share price after a slight uh pullback is now at $184.

So it is actually slightly undervalued and what is the projected uh growth rate moving forward? you can see for the next 3 to 5 years is still projected to grow at 31. 96% a year and beyond that is still projected to grow at 26.

26%. So is there a lot of runway left? Yes, I believe so.

Is it too expensive? I don't think so. Now, of course, having said that, you know, if I were to want to buy for the first time, would I just jump in with everything right now?

No. All right. So the thing is once I know it's a great business I know the intrinsic value I like to buy when there's a margin of safety that means when the share price goes significantly below the intrinsic value after a wave down pattern it has waved down to a level of support.

So for example let me show you one of my charts and again these are the charts which I teach my students to draw in our investment class. They learned that for every stock they have to you know uh draw the intrinsic value and below the intrinsic value they learned that they have to draw at least four support levels and these are technical support levels because remember that nothing goes up in a straight line yeah Nvidia will be high in the future but it doesn't go up every day every week every month every even every year right although it could be every year I don't know right but uh it goes up in wave patterns as you can see wave up wave down wave up wave down wave up, wave down, wave up, wave down, wave up, wave down. So, every time it waves down, it would tend to bounce off a support level and you can never predict which one, right?

So, in this case, for example, uh this kind of like bounced off the first support level, but if there's another wave down because of some macro uh development in a short term, it may wave down to the second support level and bounce back or even wave down to the third or the fourth support level. So I've always got at least four support levels. And what are these support levels for?

These are where I add shares. So once it hits the first support level, for example, 177, I will add shares. And it hits 153, I add more.

130, I add more. 90, I add more. And so if I want to build a position, I'll add about one quarter each time until I've got so-called a full position.

And that is one of my main styles in investing. So that's an example for Nvidia. Let's take a look at at another example uh ASML which has actually done really well for me uh last year especially.

It's still my portfolio. Nvidia is still my portfolio. These are my core portfolio holdings.

And now ASML is now slightly overvalued. You can see the intrinsic value is about 871 and right now the share price is 1280. So this is now overvalued.

So would I want to buy this right now? No. It's in fact gone up on a wave up.

I want to wait for a wave down below the intrinsic value, a margin of safety, then I'll add again. Right? So it's having that discipline.

Never chase the girl after the girl has run away. Don't chase. Always be cool.

Wait for the girl to run back to you when she's fearful. And something will always spook her in the markets. You can be certain of that.

And you can see see that for ASML again. And what's the growth rate next uh 3 to 5 years? Still projected to grow at 21%.

And beyond that growing at 16. 98%. By the way, these figures come from fact set which is the data provider of stock oracle.

So give you giving you the other example of ASML. Okay. So again you can see for example that the intrinsic value is over there and right now it has waved up.

So never buy after wave up. never chase the girl. Right?

So you can see, you know, so this is, you know, the wave up, wave down, wave up, wave down, wave up, wave down, wave up, wave down, wave up, wave down, wave up. There's a big wave down, wave up, wave down, wave up, wave down, wave up, wave down, wave up, WAVE DOWN, WAVE UP. Never chase.

Wait for it to wave down and then I buy. I buy on the wave down. Uh, letting the stock come to me.

Now again, this only applies to good companies. Good companies after wave down what happens? What happens after wave down?

They will always wave up again. How do we know? Because their revenues, profits, free cash flow, they keep growing, right?

But don't do this on a lousy company. If you do this on a company where the revenue is dropping, profits are dropping, cash flow is dropping, and the company doesn't have a strong mode, these are companies that drop and will never come back. They will never ever come back.

So, you got to know the difference, right? Only do this on the top 1% of companies in the world that have solid fundamentals. Don't do this on the 99% of companies that are full of crap or may go up temporarily because of high but they drop and they never come back.

So you got to differentiate, right? So you can see for example ASML where are my support levels? My support levels at 826, 763, 682 and 645.

These are the levels I buy at. So how do you find out these levels? Well, you can learn technical analysis, which is what I teach in my courses.

And I combine fundamentals with technicals. So, with technical analysis, you know where to identify the support levels. These are levels when the price drops, there's a high higher probability they would reverse at these levels.

Yeah. And for those of you subscribed to Ultimate Investors Playbook, I will update all my levels every month and I share with all my subscribers my levels uh for all my portfolio stocks. If you're too lazy to draw it yourself, you can check that out.

Let's look at uh what's the other one? Broadcom. Okay, how about Broadcom?

Broadcom right now is oh it's it's it's it's slightly undervalued despite going up a lot in the last few years because the earnings and the cash flow have gone up even more than the share price. All right. So you can see intrinsic value about 405 stock price 352 slightly undervalued and projected to grow at 20.

88% next 5 years beyond that 24%. So again, you can see they've gone up a lot, but there's still a long runway left. Let's look at the last one, TSM, which I I don't own this one.

I own all the rest. And the only reason I don't own TSM is because of the Taiwan issue right now that uh Trump is saying, I'm going to take Greenland, he's probably going to say, "Okay, she you take Taiwan. " And then, well, I don't know.

I I can't predict what's going to happen. But anyway, that's the only reason I don't own TSM. But but as a company, it's a great business.

It's a fantastic business. Okay. Uh and TSM is is overvalued.

Can see intrinsic value 281 right now 331 overvalued but still projected to grow at 23 22% in the next 5 10 years. So still a long runway left. So those were the semiconductors that again are part of the infrastructure hardware that makes AI possible.

But within infrastructure hardware you also have got the other part which is data centers and compute infrastructure and again there are many companies for example one of the companies is digital realy trust or DLR. Now bear in mind this is a REIT that owns a lot of the data centers in the US. You also have got Vertive, ticker symbol VRT.

This company makes the thermal management or cooling systems and power management systems within the data centers. And you've got Ethan, ticker symbol ETN. This company, they build the grid infrastructure that make sure electricity flows uh safely, right, to power the data centers and and so forth.

Now, personally, I do not own them individually, DLR, VRT, ETN. uh but I do own them within a uh ETF uh which I'll talk about later on. In fact, I've shared in my previous video uh and why do I why do I not own them individually?

Because I think that individually they are economic modes are not that strong, you know. So for me, I'll only buy an individual stock if it's got what I call a monopolistic edge in the market. It's got a very strong economic mode.

I'll buy the stock. But if the company is growing but I think the mode may not be that strong uh or the financials are not that consistent then I would rather buy within an ETF. So there's more diversification.

All right I'll show you some examples in a while. Now within infrastructure hardware you also have got what we call the power providers the independent power producers like for example constellations energy uh CG you got Vistra Corp VST. You got chemical CCJ which is in which is a uranium company but I'll talk more about that separately because that alone is a second mega trend which is what we call the AI energy and power mega trend.

So take a closer look at those data center in compute infrastructure stocks I just talked about. The first one was DLR which is uh digital realy cor which is a REIT and again you can see that um it's got a narrow mode which is not bad but again notice the difference notice that a lot of the companies I buy they have got very very strong financials what I what do I mean by that right if you look at Nvidia you can see that in terms of predictability of the revenue and profits very high profitability very High growth very high mo very strong financial strength very very strong. So they all like high high high high high high high high high high high high high high high high high high high high high high high high high high high high high high high high high and like broadcom same thing right if you look at broadcom again same thing look at that predictability very high profitability very high growth very high mode very high financial strength very strong so these are the companies that I feel safe in buying the individual companies but when you look at a company like digital realy trust which again is not a bad company it's a good company it is growing is doing Okay.

But again, you can see that its financials are not as strong, right? It's not not as strong. You can see predictability, yes, pretty predictable, very high.

Profitability, okay, medium growth, low mode, not bad, narrow mode, strong financial, so it's not too bad, right? But again, I like to buy the ones that are all high. Ideally, those are the ones.

And projected growth rates a bit lower. is like 11% for the next 5 years but beyond that it's like 3. 85% 85% so lower growth and again if you want to find out more about the mode again this is a REIT so generally REITs uh their modes are not as strong as the normal monopolistic company right so for example if you look at their mode over here you can see where their mode comes from uh they've got a mode score of 6 out of 10 they are one of the largest global owners of data centers with a portfolio spanning over 300 facilities in more than 25 countries.

Uh not that high pricing power, high barriers to entry, medium switching cost, uh high economies of scale, but low network effects. So it's a good business, but I wouldn't say it's like rock solid super uh monopolistic, which which is what I like, right? What's the other one again?

The other one was I think Vertive um Vertive Holdings that does the thermal management, the cooling systems, the power management in the data centers, right? Because remember data centers are made of all these semiconductor chips and if it's too hot it will melt. So you need a cooling system.

So this company builds like the air conditioning within the data center, right? And the growth is pretty good. You can see that they are growing at 25% in the next 5 years.

Beyond that 29. 96% pretty good growth. Uh and you can see that again it's not bad.

The financials are quite strong. The only thing is their mode is not that strong, right? They've got a they don't have a mode.

So what does that mean? That means that they could have high growth now, but in the long run they could be more easily disrupted by competition. That's what no mode means.

easily disrupted by competition. So companies like that, I rather not buy the individual stock unless I'm doing a short-term trade. But if it's a long-term investment, then I rather buy them within an ETF.

The other example I gave for Compute Infrastructure was ETN, ticker symbol ETN. I don't own this individually as well, but it's a great company, but I own it within an ETF again. And again, it's a pretty good company.

You can see that high predictability, high profitability, growth, not bad, medium growth, 12. 8 to 11. 47%.

So roughly 12% growth in the long run. Uh mode, they've got a narrow mode, which is not bad. It's investable, very strong balance sheet, uh but currently slightly overvalued.

You can see intrinsic value 270, but now selling at 329. So this is currently a bit overvalued uh when it comes to EAN but it's it's a pretty good business. So again last year semiconductors did really well.

Data centers and comput infrastructure did also not too bad and you can see that power producers which I'll talk about next that has also now started to catch up. Now let's move on to the other part about enablers. Again remember enablers are companies that make AI possible.

So we talked about the hardware part, the infrastructure part. Let's now look at the infrastructure, software and services. So these are companies that provide the software that make AI possible.

So for example, uh the cloud providers, the hyperscalers like your Microsoft, your Amazon, your Alphabet, your Meta and Palanteer. So in 2025, Palanteer did really well over 100% return. I still own Palunteer although I've sold quite a bit of it but I still own a sizable position and of course I own the rest as well.

Uh what's interesting is that yeah Alphabet did really well, Google did really well in 2025 but Meta slightly underperformed Microsoft underperformed and Amazon which is my biggest position underperformed in 2025. But I believe in the next in this year and next year and beyond I think Amazon will be the next Alphabet or will be the next Google. And what I mean by that is that it's been sleeping sleeping sleeping but I think it's going to be one of the best performers in the next couple of years.

Again I could be wrong but that's just my guess. I'll I'll explain why later on. So they provide the software and services.

So again while this has been flying uh this has been consolidating but pretty soon this would start to take off again right and then you've got database companies like MongoDB MDB and Snowflake SN now I don't own any of these but they've done pretty well in 2025 uh then you've got design automation companies like Synopsis and Cadence Design two very good companies but I don't own them and the only reason I don't own them is because I already have a lot of exposure uh to enablers. But if you ask me, would I buy them if I didn't have a lot of enablers? I wouldn't mind buying them because they're both very, very good companies.

Synopsis and Cadence Design, and they are kind of like a duopoly in the design automation market. Next, enterprise software supporting AI workloads. The two main leaders in this area are Salesforce, ticker symbol CRM, and Service Now, ticker symbol N.

They both significantly underperformed in 2025. In fact, they're both down like over 20% 2025 for different reasons. For Salesforce, the concern is that Agentic AI may reduce their revenue because with Agentic AI, companies need less employees and because their pricing is based on the number of licenses that could reduce the licenses because of less people that could reduce the revenue.

But Salesforce has already been pivoting to a consumptionbased pricing model. So that means that even if their customers have less employees, less seats, but if each person uses more and more of their agentic AI platform, that can still grow their revenue and their profits because again it's a consumption based pricing model and not a seed licensebased pricing model. Now for service now the reason it dropped was a pretty stupid reason is because of they made the biggest acquisition into a cyber security company ARMIS for $7 billion.

All right. So uh personally I think that these two stocks are very undervalued right now and they are prime beneficiaries of the agentic uh AI growth moving ahead. So I think that once the market shifts back to software I think that this has significant upside.

So, so far in the first 3 years of the AI revolution, a lot of the money has gone into the enablers, specifically the hardware. But I believe that from now on the hardware will still do well, but I think money will broaden to shift into the software infrastructure and into the adopters. So, I think that this is where companies are undervalued and I think this is where a lot of uh upside will be in the next year or so.

So what are AI adopters? These are companies that do not make the AI. These are companies that use the AI to make their products either better or make their companies more efficient by lowering their cost and increasing their profit margins.

So again we can divide them into external product enhancement where AI makes their product better or AI makes their company more productive, improves their improves their profit margins. So examples of external product enhancement with AI would be cyber security companies like leaders like Palo Alto uh PNW foret FT&T and Crowdstrike CRWD and these cyber security companies by themselves are within a long-term growth uh trend as well right because of cyber risk and cyber security they have underperformed in 2025 but I think that they will rebound uh this year and in the years to come. Next will be medical devices companies like Intuitive Surgical which is a great company.

The only thing is a bit too expensive. If it was cheaper, I'll buy it. Still waiting.

And IT consulting of which the leader is Essential. So Essentia has underperformed in 2025. But the majority of their billings are now coming from AI consulting.

So I think they're also one of the prime beneficiaries of AI, but it's not been factored in yet to their share price. So I think there's a lot of upside in essential because again currently it is also very very undervalued. Next will be companies that can use AI to become more efficient growing their profit margins.

Companies like waste management uh which initially underperformed at the start of last year but started to rebound back and I bought a pretty big position in waste management. Uh data providers like S&P Global Fax Msei underperformed last year. It's a matter of time they will rebound.

And of course banks, banks have done very well. Uh especially Singapore banks like DBS uh uses a lot of AI. In the US you've got JP Morgan and with AI they would significantly increase their margins as well.

So I think banks have again a lot of room to run. But bear in mind as much as I love the banks, I think they are currently a bit overvalued and overextended uh in the short term. For example, if you look at DBS Bank, it's like wave up, wave down, wave up, WAVE DOWN, WAVE UP.

OKAY, I'LL WANT TO WAIT FOR WAVE down before I'll add more. I'll see you guys in part two and then part three of this video where I'll cover a lot more about these mega trends. If you want to catch my latest videos, click on the subscribe button right now.

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