THE LEADER OF THE

$4 TRILLION AI FORTUNE
BY E.B. TUCKER, EDITOR, STRATEGIC INVESTOR
Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

John Butterfield’s friends thought he was crazy. He promised regular West Coast mail delivery
in less than 25 days.

To accomplish this unheard-of feat, Butterfield bought 1,200 horses and 600 mules. He hired
1,000 men and built 200 weigh stations. His men stockpiled grain and supplies before the first
of his 250 stagecoaches took off. This was a monumental effort in 1857.

His route hugged the southern half of the western U.S. He thought this would help keep the
service moving during winter months.

Butterfield’s motto was, “Nothing on God’s Earth must stop the United States Mail.” He
signed a six-year deal with the U.S. government for regular mail delivery. Within a year, his
business hemorrhaged cash. Worse yet, the Californians receiving his regular mail deliveries
complained the service was too slow.

Thanks to gold discoveries in 1848, California’s non-native population swelled from 2,000 to
300,000. These new residents demanded reliable communication. Once they got it, they wanted
it faster.

In 1860, a new, faster service launched. The Pony Express cut the 1,840-mile route from St.
Joseph, Missouri to the growing Bay Area to just 10 days. The Pony Express had 120 riders and
400 horses. That’s just a fraction of the staff Butterfield used.

But within 18 months, the Pony Express also became obsolete, when Western Union sent a
telegraph message along the same route for the first time.

Coming up with a faster, cheaper, or more reliable way to move information can mean
overnight riches.

The same is true today, 160 years later… and we stand to make a fortune off the latest
innovation…

I’m talking about autonomous trucking – more importantly, the crucial technology behind this
trend.

Let me explain…

THE NEXT BIG MONEY-MAKING OPPORTUNITY FOR STRATEGIC

INVESTORS…
Recently, the United States Postal Service (USPS) road-tested a fleet of autonomous trucks.
These are not the square white vans you see delivering mail in your neighborhood. These trucks
are long-haul semis carrying mail between distribution centers.

USPS spends $4 billion per year on long-haul trucking costs. The cost of trucking is on the way
up, not down. Most of this money goes to contractors. USPS can’t find enough of them right now.

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

I found dozens of postings for USPS trucking jobs online. The average pay was over $30 an
hour, plus benefits. That’s $65,000 per year for driving a semi-truck full of mail along the same
stretch of highway every day. And the ads also promised drivers would be home each night.

Similar to Butterfield’s Overland Mail stagecoach operation, many USPS semi-trucks carry
two drivers. Halfway through a haul, they switch seats to avoid violating Department of
Transportation resting requirements.

The $4 billion spent hauling mail between distribution centers amounts to 5.4% of total annual
USPS operating expenses. USPS needs that cost to go down. It hopes automated trucking will
help that happen.

We found a way to invest in the technology needed today to make that happen.

DRIVERLESS TRUCKS AREN’T POSSIBLE WITHOUT THIS TECHNOLOGY

Every day, USPS sends semi-trucks filled with mail and packages between Phoenix and Dallas.
Dallas is one of 21 distribution centers in the nationwide USPS network.

On May 21, it made the first of five round-trip hauls with driver-assisted trucks. These trucks
are only in testing now. The Service hopes to have fully operational automated trucks with no
drivers on board someday. That would help reduce the $4 billion it spends now on long-haul
drivers.

The trucks in testing with USPS have two people in the cab. News headlines call these trucks
automated. They’re actually “driver-assisted.” There’s a big difference.

What the Postal Service doesn’t mention is automated trucks are not possible with existing
technology. The systems in testing are more like the radar-enhanced cruise control in my 2018
Toyota Land Cruiser. That system only works well on a thinly traveled freeway. It expects me to
grab the wheel if anything outside of convoy driving pops up.

Western Union couldn’t send the first telegraph message across the country until miles of lines
and poles went up. Up until that point, the Pony Express was still the fastest way to send a
message.

Automated, or “driverless,” vehicles can’t function on the cellular data network your phone uses
to connect. That network is 4G, or fourth generation.

We need a 5G network.

A functioning 5G network means today’s popular technology ideas like driverless cars will
become a reality. Since these devices can’t work on the existing 4G network, it means billions in
spending to build a new one. That spending just got started.

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

WE’RE BETTING ON THE NETWORK BUILDOUT

The technology of tomorrow might seem years away, but it’s actually weeks away in some cities.
Verizon promises 5G coverage in at least 30 cities this year. In April, AT&T announced 5G
coverage in 19 cities. But there’s a catch.

AT&T doesn’t offer a phone that works on its burgeoning 5G network – not yet, at least.
Existing cell phones don’t work on the new 5G network.

The 5G network will be faster than anything you think is possible now. Say you’re downloading
a picture sent to you by text. Right now, you might wait 20 seconds while your phone receives
the picture. On the 5G network, that will take one second. If you’re in a major city in direct line
of sight of a 5G tower, it could take one-fifth of a second.

But the revolutionary part of 5G is not sending pictures quickly to loved ones. It’s connecting
devices that will change your life. It’s what we call the Internet of Things (IoT). Automated
cars, health-monitoring devices, and safety equipment built for the IoT can’t exist on today’s
4G network.

5G Connecting the Community

Smart Smart
Homes Energy

Virtual
Reality Healthcare

Smart
Phones Education Cars

The 5G network will connect life-changing technology.

The most important difference between the 5G and 4G networks is latency. Latency is the time
it takes for a signal to travel from sender to receiver. The delay created between sending and
receiving on the existing network can prove deadly.

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

For example, look at the convoy of trucks hauling mail from Phoenix to Dallas for USPS. The
driver-assisted features can’t function yet without humans behind the wheel. That’s because
programmers realize the sensors on the truck can’t send and receive data fast enough to react to
real-life situations on the road. That will change when the truck connects to a 5G network.

The graphic on the previous page shows devices you’ve heard about all connected to a new 5G
network. The buildout of that network is underway now… and we’ve found the best way to
profit from this megatrend…

NOT ONLY DO SELF-DRIVING CARS NEED TO BE PLUGGED INTO THE

INTERNET OF THINGS…
They need artificial intelligence too.

In particular, they need a good set of eyes…

And the ability to comprehend what they’re seeing. That requires special computer parts.

Current technology feeds the car’s computer blurry images like the one on the right.

Now here’s where this company comes in.

It manufactures a better version of high-resolution radar that’s called LIDAR. Which you can
see in the image on the left.

LIDAR offers the AI system a better set of “eyes” so it can make smart split second decisions.

LIDAR units cost anywhere from $4,000 to $75,000.

So let’s look at the money that could be made. 70 million cars are produced yearly.

Let’s suppose this company only sells 3.5 million lowest cost LIDARs, priced at $4,000.

That would amount to $14 billion in revenue. That’s the value of the NFL!

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

But this could be a very conservative figure. After all, this company is the obvious “go-to”
supplier for LIDAR.

Yahoo Finance found that it’s a strong momentum stock that’s beat analyst earnings per share
estimates for 17 consecutive quarters. That’s very impressive.

They also report it’s got the attention of hedge funds.

Institutional investment firms like BlackRock, Vanguard, and JPMorgan Chase are also moving
in for the kill.

Since then, this stock is gaining steam.

Now’s the time to buy in.

PRODUCTS TOUCHING EVERY PART OF LIFE

Analog Devices (ADI) produces many of the components needed to make 5G work. Best of
all, it’s an American company free from the drama of the ongoing trade war between the U.S.
and China.

It’s impossible to send a text message or make a call from your cell phone today without using
equipment made by Analog. The company’s equipment goes unnoticed everywhere from the
iPhone screen to the cell towers on the freeway. An entirely new 5G network set to go up
means big demand for ADI components.

5G technology is in the crosshairs of the ongoing trade war with China. Leading Chinese 5G
component company Huawei (pronounced wah-way) makes daily headlines right now. The
company’s 5G equipment faces new trade restrictions. Its suppliers in the U.S. also face scrutiny.
And, although President Trump has lifted some restriction on Huawei, we still see the trade
war getting worse, not better.

MIT graduates Ray Stata and Matthew Lorber founded ADI in 1965.

It booked $574,000 in revenue that first year, with only three products. Sales reached $5.7
million by year three. By the 2000s, an ADI device touched nearly every cell phone call or data
transmission in the free world.

Most people haven’t heard of ADI. It doesn’t make cell phones or smart gadgets, nor does it
spend money on advertising. While ADI components are essential to modern life, the company
is anything but trendy.

ADI is the leading maker of mixed-signal analog and digital integrated circuits. These devices
convert real-world sensations like sounds, temperatures, or pressures into digital signals.

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

For example, ADI helps convert your voice into the sound heard by the person on the other end
of your smartphone. Your voice enters the phone as an analog, real-life sound. ADI converts it
into a digital sound that travels to the cell tower, through a network, and back to the speaker on
the recipient’s phone. Then ADI converts that sound back to analog, so the person you called
can hear you in your own voice.

Or consider what happens when you touch the screen of your smartphone or tablet. An ADI
device senses the pressure applied to the screen. It converts that pressure into a digital signal,
which commands the device to perform any task you want. This component specifically was a
big winner for ADI as smartphones took off.

ADI’s pressure-sensing smartphone film is so sensitive, in fact, it can read your blood pressure.
Michigan State researchers recently discovered simply pushing your index finger on the
smartphone screen to open an app is enough for an accurate reading. ADI’s product could soon
double as a life-saving technology.

The smartphone screen film is a big piece of ADI’s business today. Apple made up 14% of
ADI’s revenue in 2017. Some analysts criticize the company for having one large customer. We
think this is off-base for two reasons.

First, ADI produces over 45,000 separate pieces of equipment. It has 125,000 customers around
the world. Apple used the company’s pressure-sensitive product on the screens of its devices.
That was a big win for the company. From our research, we see a different segment of the
company set to explode. If revenue from Apple wanes, we’re not sure it matters going forward.

Second, U.S. companies account for 34% of the company’s revenue. We see that share rising
sharply over the coming quarters. With the trade war heating up, we don’t expect to see many
5G components from China used in the U.S. network. This is a natural benefit to a powerhouse
like ADI, headquartered here in the U.S.

SHARES SET TO TAKE OFF

We see shares of ADI set to surge over the coming quarters.

The driver-assisted trucks in testing with the Postal Service can’t be driverless without a 5G
network. That network can’t work without ADI components.

Meanwhile, ADI makes radar, lidar, and navigation equipment used in driver-assisted vehicles
like my Toyota.

ADI produces products in a diverse array of industries. From building technologies to asset-
tracking sensors, it has its hands in everything. The common thread among these businesses
is analog inputs turning into digital signals. Anything we see, touch, or feel with our human
senses needs to become digital for gadgets to help us. That’s what ADI does.

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Strategic Investor THE LEADER OF THE $4 TRILLION AI FORTUNE

In order for pacemakers to talk to hospitals, driverless cars to scan the road and make rapid
decisions, or movies to download in seconds, ADI devices have to be involved. Demand for its
most cutting-edge components looks set to take off as gadgets that can’t function without 5G
digitize our life.

ADI makes a fortune producing these high-tech components. It produces profit numbers that
would make bankers blush.

The company’s fiscal 2018 gross margin was over 71%. That means 71 cents of every dollar of
sales remains after producing the actual products it sold last year.

ADI also knows how to run its business. This is important because some tech firms have
scientists running the company. That’s a mistake ADI doesn’t make.

In 2017, the company faced stiff competition from a firm called Linear Technology. Linear
created an edge in data conversion and power-management equipment. It started winning
contracts over ADI. ADI solved the problem by buying the company for $14.8 billion. This
shows that when ADI faces a serious business threat, it knows how to handle it.

ADI has manageable debt at less than $6 billion. More importantly, its debt sits at just over two
times its EBITDA (earnings before interest, taxes, depreciation, and amortization). That’s lower than
many other companies growing at ADI’s pace of nearly 20% year-over-year over the past five years.

We expect the company to continue on this course. More importantly, we see it as one of the
only providers of essential 5G components produced in the U.S. As the trade war heats up, that
becomes a critical advantage.

BUY shares of Analog Devices (ADI) up to $125. Use a 30% trailing stop loss on the trade.

Important note: If this stock is trading over its buy-up-to price by the time you read this,
be patient and don’t chase higher.

To contact us, call toll free Domestic/International: 1-888-512-2739, Mon-Fri: 9am-7pm ET, or email us here.

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