As we scanned the headlines over the past week, we spotted many reports that bolster our views on several Pro Portfolio investment themes, including stories and news on AI bots, cyber attacks and new initiatives from Sam’s Club (WMT) and Priceline (BKNG) .
Let's dig in:
Artificial Intelligence
“Meta Platforms Inc. is expanding its AI-powered chatbot to 21 new locations, including the UK and Brazil, where the social media giant has significant numbers of users, the company announced Wednesday. Meta AI, the company’s chatbot, lets users converse and get recommendations on its Facebook, Instagram, WhatsApp, and Messenger apps. It’s also available as a voice assistant in the social media giant’s smart glasses and mixed reality headsets.” Read more from bloomberg.com
“Amazon.com Inc. unveiled a new artificial intelligence tool designed to solve a major pain point in its quick delivery apparatus: drivers rummaging through cluttered vans at each stop searching for packages… Called Vision Assisted Package Retrieval and in development since 2020, the tool will be deployed in 1,000 Amazon vans next year and will shorten the typical delivery route by about 30 minutes…” Read more from bloomberg.com
“As artificial intelligence (AI) chatbots enter workplaces, they’re not just boosting productivity — they’re opening digital back doors to corporate secrets, with over a third of employees unwittingly playing the role of gatekeepers. A Sept. 24 survey by the National Cybersecurity Alliance revealed a startling trend: 38% of employees share sensitive work information with AI tools without their employer’s permission. The problem is particularly acute among younger workers, with 46% of Generation Z and 43% of millennials admitting to the practice, compared to 26% of Generation X and 14% of baby boomers.” Read more from pymnts.com
"Priceline’s recent integration of artificial intelligence (AI)-powered voice technology into its booking system signals how the technology is changing the way travelers plan and purchase trips. The travel company updated its Penny chatbot with AI-powered voice technology, using OpenAI’s GPT-4 API for real-time conversations. This development comes as the travel industry, worth $766 billion globally, sees most bookings happening online.” Read more from pymnts.com
Sam’s Club is reportedly preparing to launch its first store without checkout lanes … “Using a combination of AI, computer vision and digital tech, Sam’s Club’s system identifies what’s in a shopping cart, confirming customers have paid for their items without requiring an associate to check their purchases before leaving the store… Sam’s Club’s digital store, along with recently reported cashierless McDonald’s locations, are happening at a time when unattended payments technologies are “increasingly becoming indispensable in today’s fast-paced retail environment,” Read more from pymnts.com
Position: Alphabet ( (GOOGL) ), Amazon ( (AMZN) ), Meta ( (META) ), Microsoft ( (MSFT) ), ServiceNow ( (NOW) )
Cybersecurity
“The largest regulated water and wastewater utility company in the United States announced Monday that it was the victim of a cyberattack, prompting the firm to pause billing to customers.
New Jersey-based American Water — which provides services to more than 14 million people in 14 states and on 18 military installations — said it became aware of the unauthorized activity on Thursday and immediately took protective steps, including shutting down certain systems.” Read more at cnn.com
“Today, Proofpoint, Inc., a cybersecurity and compliance company, and Ponemon Institute, an IT security research organization, released the results of their third annual survey on the effects of cybersecurity in healthcare. The report found an increase of 77 percent from last year in patient care disruption due to cyberattacks.” Read more at hcinnovationgroup.com
“Home and small business security company ADT disclosed it suffered a breach after threat actors gained access to its systems using stolen credentials and exfiltrated employee account data… This is the second ADT breach in two months, with the company warning in August that they suffered a data breach after a threat actor leaked 30,800 customer records, including customer emails, complete addresses, user IDs, and the products purchased, on a hacking forum.” Read more at bleepingcomputer.com
“MoneyGram has confirmed that hackers stole customers' personal information and transaction data in a September cyberattack that caused a five-day outage… During this time, the threat actors stole a varied amount of sensitive customer information, including transaction information, email addresses, postal addresses, names, phone numbers, utility bills, government IDs, and social security numbers.” Read more at bleepingcomputer.com
Position: First Trust Nasdaq Cybersecurity ETF (CIBR)
Digital Infrastructure
“Taiwan Semiconductor Manufacturing Co. on Wednesday beat forecasts in posting a sharp increase in its third-quarter revenues in a sign of ongoing demand for high tech chips driven by the continuing artificial intelligence boom. The Taiwanese chipmaker, which is the main supplier of advanced semiconductors to Apple and Nvidia, reported September sales worth NT$251.87 billion ($7.82 billion), in what marks a 39% increase in its revenue compared to the same month last year.” Read more at marketwatch.com
Position: Marvell (MRVL) , Nvidia (NVDA) , Qualcomm (QCOM)
Digital Lifestyle
“In today’s digital age, streaming media has woven itself into the fabric of daily life in America. The recent survey reveals a striking statistic: on average, Americans are dedicating a substantial three hours and nine minutes each day to streaming digital media. This engagement translates to over 21 hours per week—equivalent to the commitment of a part-time job. This significant investment of time underscores the central role that streaming services play in entertainment and information consumption for the average American.” Read more here at forbes.
Position: Alphabet (GOOGL) , Amazon (AMZN) , Trade Desk (TTD)
Digital Payments
According to the report, 71% of merchants believe SoftPOS will replace traditional terminals, highlighting a strong consensus on the technology’s future… SoftPOS technology allows merchants to accept contactless payments using only a smartphone or tablet, eliminating the need for expensive hardware typically associated with traditional POS systems. This is advantageous for small businesses and mobile vendors like food trucks and service providers, who can now operate without being tethered to a fixed location.” Read more at pymnts.com
Position: Mastercard (MA)
Homebuilding & Materials, Rebuilding America
Including homebuilders that are key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
“Hurricane Helene tore through the Southeast at the end of September, destroying roads and bridges, knocking out electricity and cell service, sweeping away homes… Preliminary estimates place the price of rebuilding from Helene in the tens of billions: On the lower end is $30.5 to $47.5 billion, from CoreLogic, a California-based financial and consumer analytics company, while forecasting company AccuWeather pegs it from $225 to $250 billion. “ Read more at constructiondive.com
“Hurricane Milton’s once-in-a-century potential could cause damage of more than $50 billion, with the potential to leave behind devastation approaching $175 billion or more in a worst-case scenario, according to leading Wall Street analysts. That would be on top of the carnage already left behind by Hurricane Helene, posing a potential record-breaking path of wreckage…” Read more at cnbc.com
Position: Builders FirstSource (BLDR) , United Rentals (URI) , Vulcan Materials (VMC) , Waste Management (WM)
Safety & Security
“There’s no shortage of excitement on NATO’s eastern flank over military hardware nowadays. Put together, 14 member states have ramped up defense spending since Russia’s invasion of Ukraine to a level unseen since the fall of communism. It amounts to $70 billion this year alone. Yet the orders for jets, helicopters, tanks and missile systems have exposed just how much more needs to be done to catch up with NATO standards at the most perilous time since the Cold War.” Read more at Yahoo.com
“The Norwegian government proposes to increase the defense budget for 2025 by NOK 19.2 billion, up to a total of NOK 110.1 billion. The proposal fulfills the first major promise of the Norwegian long-term defence plan and exceeds NATO's target of its members spending 2.16 percent of their gross national product (GDP) on defense.” Read more at regjeringen.no
Position: Lockheed Martin (LMT)
Themes mentioned in this alert:
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption or destruction of data.
Digital Infrastructure & Connectivity - The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Digital Lifestyle - The companies behind our increasingly connected lives.
Digital Payments - This model focuses on companies benefitting from the accelerating structural adoption of digital payments and financial technology (FinTech).
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.