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Hello, Reader.
If you gave David Bowie’s “Changes” a listen when it came out in 1972, you’d mostly be limited to a record player or a radio station.4e
The internet was barely more than an idea among scientists and engineers, let alone music streaming apps.
That was also the year that Atari released the arcade video game “Pong,” and when Intel Corp. (INTC) introduced the Q1 microcomputer.
But, to put it in Bowie’s words, “Time may change me, but I can’t trace time.” Essentially, time has the power to transform, and we have no ability to control it.
And much has changed in the decades since. We now have personal computers and video game consoles. The internet and music streaming apps.
But time’s biggest technological changes are happening right now, thanks to artificial intelligence.
The CEO of DeepMind Technologies, Demis Hassabis, believes that AI and, eventually, artificial general intelligence will have 10X the impact of the U.S. Industrial Revolution in a 10th of the time.
Change used to unfold over decades. Now it’s happening in real time.
The leap from AI chatbots to AI agents is happening in a fraction of the time it took to develop the models themselves.
And that acceleration is where the biggest opportunities are forming…
Often in places where few investors are looking.
So today, let’s dive into the latest change on the AI block – the rise of agentic AI – and what it means for where the smart money flows next.
Let’s jump in…
LLMs Were the Warm-Up Act
AI chatbots are now incredibly normalized.
A June 2026 Pew Research Center survey found that 49% of U.S. adults use AI chatbots such as ChatGPT, Gemini or Copilot, up from 33% in 2024. About one in four adults use them daily. ChatGPT alone is used by 44% of U.S. adults, up from 34% in 2025.
That growing adoption helps explain the scale of the opportunity ahead: Gartner forecasts worldwide AI spending will reach $2.7 trillion in 2026, up 49.5% from 2025.
AI agents will be a major driver of that surge.
Take Muse, Meta Platforms Inc.’s (META) personal AI agent released earlier this month. Muse can browse the web, use connected apps and complete multistep tasks on its own. It can even keep working in the background after you close the app.
That is a meaningful shift from asking AI for information to letting AI act on your behalf.
The distinguisher here isn’t just intelligence – it’s access and persistence. The more access Muse gets to your email, calendar, shopping, computer, and physical surroundings, the more tasks it could potentially handle on your behalf.
And that’s where things get interesting for investors. If agents like Muse become good enough at comparison shopping, they could change how consumers choose financial products, travel, retailers, and other services.
Instead of spending hours researching insurance policies, bank accounts, or other financial products, a consumer could eventually ask an agent to compare the options and do much of the legwork.
That possibility was one factor behind Tuesday’s selloff in financial stocks, as investors considered whether agents could make it easier for consumers to compare products – or eventually take on some tasks now performed by insurance agents, financial advisers, and brokerages. The S&P 500 Financials Index fell as much as 2.4% on Tuesday, while Charles Schwab Corp. (SCHW) and several other brokerage stocks dropped more than 5%. Banks, insurers, and travel companies were also hit.
AI is changing the world around us so rapidly and in so many mind-blowing ways that I hesitate to anoint any technology company immune to AI’s disruption.
But I’ve narrowed down a swath of stocks that possess a significant defense against AI agents’ encroachment…
Those that have an essential connection to physical products or infrastructure.
Here’s a simple way to identify this group of stocks…
The One Rule for Investing in an AI-Disrupted World
For simplicity and clarity, I’m referring to this essential investment qualification as: “If you can kick it, you can pick it.”
The corollary is equally valid: “If you can’t kick it, you can’t pick it.”
In other words, in the AI-infested world we now inhabit, many of the most secure and successful companies will be those that maintain a connection to the tangible world.
That connection could take many forms, including proprietary medical machinery or devices, copper mines, wind turbines and solar panels, and even trash-sorting equipment.
You get the idea. I believe physical connections like these will help companies defend against competition from AI agents.
By contrast, pure technology companies that operate entirely in a digital world seem increasingly vulnerable to this next version of AI.
I’ll admit right now that I don’t know what those future versions will look like.
So, to “turn and face the strange”… world of AI, .
While that includes businesses that prioritize human experiences or products that AI cannot replace, it also includes the physical components that keep AI and data centers running, which are in short supply.
I’m talking about raw materials like copper, energy sources, and memory chips.
In fact, in new presentation, , I discuss each of these bottlenecks in detail and reveal 15 companies, , that are set to profit as AI continues to change our everyday lives.
AI is changing itself and the world in the blink of an eye. So instead of trying to make sense of this enormous, unpredictable wave, I recommend riding it.
Regards,
Eric Fry
P.S. Small-cap stocks are already having an unusual year. My colleague Louis Navellier thinks what happens next could create some of the market’s biggest winners — and some painful losers. On September 29 at 10 a.m. ET, he and Marc Chaikin will explain what they’re watching and why they believe investors should prepare before Election Day. .
