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Most investors think of AI as a software story. Joe Austin thinks they’re looking in the wrong place.
After four decades on Wall Street, Joe – who now works with our friends at Chaikin Analytics – believes some of the biggest opportunities in the AI boom may come from the infrastructure quietly powering it all. Specifically, the growing convergence between AI and the Internet of Things.
In today’s Friday Digest takeover, he explains why connected machines, sensors, and industrial systems are becoming increasingly important to the AI economy… and why the companies enabling that transformation may offer more upside than many of the headline-grabbing names dominating today’s market.
He also shares why this trend is attracting so much attention from market veteran Marc Chaikin and the team at Chaikin Analytics. In fact, Joe and Marc will be unveiling a new AI-powered research tool during a free event on June 24. You can reserve your spot right here.
If Joe is right, the next generation of AI winners may not be the companies everyone is talking about today – but the ones quietly making the entire AI revolution possible.
I’ll let Joe take it from here.
Have a wonderful Juneteenth,
Jeff Remsburg
Deep in the Australian bush, one coal mine nearly ground to a halt.
And nobody saw it coming…
Mines rely on vast networks of conveyor belts. These snake underground and across open terrain, moving ore from extraction to processing. If the belts stop, so does the mine.
In this coal mine, that’s exactly what was about to happen. AI-powered sensors on belt motors flagged something odd — a conveyor drive bearing was deteriorating faster than it should have been.
The culprit was bearing fluting. That’s when electrical current leaks through the bearing instead of flowing through the grounding system. It silently damages the bearing from the inside — until it’s too late.
A physical inspection might have spotted the wear, but it wouldn’t have detected the urgency. The sensors did.
They caught the problem early enough to trace it back to the grounding issue, fix it, and swap the bearing before the belt went down. As a result, the site avoided 10 hours of unplanned downtime and roughly $191,000 in lost production.
More importantly, fixing the root cause — not just the symptom — extended bearing life and cut long-term maintenance costs.
The sensors didn’t save just a bearing. They saved the whole operation.
This is part of a broader theme I’ve had my eye on…
AI and machines are doing the work that people can’t do — or doing it better.
And a key concept is increasingly making this possible.
The Foundation for Industrial AI
I’m talking about the Internet of Things — the IoT.
It has quietly become one of the defining technologies of our generation.
Not long ago, a thermostat was just a thermostat. Today, it’s a connected device sharing data with your phone, your HVAC system, and the cloud. The IoT is reshaping how people, machines, and processes communicate.
Back in the early 1980s, programmers at Carnegie Mellon University rigged a campus Coca-Cola vending machine to the internet so they could check if the drinks were cold before walking over. In 1999, Kevin Ashton at MIT gave this kind of thing a name: the Internet of Things.
Ashton’s argument was simple: Machines shouldn’t have to wait on humans to feed them data. People can be slow, distracted, and error-prone. If computers could gather information on their own and track the physical world in real time, we could eliminate waste, catch problems early, and know the state of everything — at all times.
We’re now living in the world he imagined.
The Numbers Reflect This Shift
According to industry research firm IoT Analytics, 18.6 billion devices were connected to the IoT in 2024. By 2030, that number is expected to grow to 39 billion — and hit 55 billion by 2035.
The IoT market generated nearly $550 billion in revenue in 2025. And it’s projected to reach more than $865 billion by 2030.
But industrial applications are driving much of that growth — and that’s where it gets really interesting for investors.
The industrial IoT market — think sensors, connected machinery, and automated systems in factories — came in at almost $326 billion in 2025. By 2034, it’s expected to nearly triple to about $945 billion. That’s nearly double the growth rate of the broader IoT market.
And it makes sense. Physical industries have the most to gain from machines that can sense, communicate, and act without human intervention. AI only accelerates what those machines can do.
Here’s a number that really caught my attention: By 2030, nearly half of all industrial IoT revenues are expected to depend on AI. That’s a fundamental shift in how factories, mines, and energy grids operate — and by some estimates, it could unlock up to $70 billion in new market value.
The data backs this up. According to a 2025 survey of nearly 18,000 private-sector firms, companies investing in AI alone saw a 10.4% productivity gain. Companies investing in the IoT alone saw a 6% decline. But the businesses that invested in both AI and the IoT together recorded a productivity increase of 18.9% — nearly double the AI-only gain.
Put simply: AI without physical connectivity is only half the story. And physical connectivity without AI is falling behind.
AI Is Moving Closer to the Machine
Until recently, most industrial sensors had no AI built in at all. That’s changing fast.
Manufacturers are now building AI directly into the sensors, gateways, and equipment on the factory floor. Instead of sending data to the cloud and waiting for a response, machines process information on the spot. The result is faster decisions, fewer failures, and fewer humans required to manage the whole system.
That’s what happened in that Australian coal mine. And it’s playing out in manufacturing plants, oil fields, shipping ports, and power grids around the world.
Folks, I’ve seen this pattern many times over my 40 years on Wall Street.
The biggest AI names — companies like Meta Platforms Inc. (META) and Microsoft Corp. (MSFT) — get most of the attention. And they face enormous pressure to prove that trillions of dollars in AI investment will eventually pay off.
But you don’t have to chase the headline names to find great investments in this megatrend.
In fact, some of the best opportunities in every major technology cycle have come from the companies building the infrastructure that makes it all possible — not the ones getting the most airtime on CNBC.
Think about the internet boom. Yes, Alphabet Inc. (GOOG) and Amazon.com Inc. (AMZN) became massive winners. But so did the companies making routers, fiber cable, and server hardware — the picks-and-shovels plays that powered the whole buildout.
The AI-plus-IoT convergence is setting up a similar opportunity. And the companies best positioned to win aren’t necessarily the ones you already own.
How to Find the Next Wave of Winners
That’s exactly where Marc Chaikin comes in.
Marc has spent 60 years on Wall Street developing the kind of analytical tools that can cut through the noise and find stocks with real momentum behind them. His Power Gauge has been doing that for decades.
But on June 24, Marc and I are unveiling something new — something neither of us has ever shown the public before.
It’s an AI-powered platform we’re calling the Time Machine. And it works by going “back in time” through decades of market data to find stocks today whose financial and technical DNA closely matches the profiles of stocks like Nvidia Corp. (NVDA), Amazon, and Meta at the very beginning of their historic runs.
In backtesting, it identified stocks that went on to deliver gains of 995%, 1,406%, and even 3,804% — all while the “seed” stocks they mirrored posted far more modest returns.
I’ve spent 40 years trying to get ahead of major technology shifts. This is the most powerful tool I’ve seen for doing exactly that.
The industrial AI buildout is real, it’s enormous, and it’s still early. The question is whether you’re positioned to benefit from it — or whether you’ll be watching from the sidelines while the next generation of big winners takes shape.
On June 24, Marc and I are going to show you exactly which stocks the Time Machine is flagging right now — for free.
To get access, all you need to do is reserve your spot now. When you do, you’ll get early access to the Time Machine’s beta platform, so you can start exploring it before our free broadcast. You can type in any ticker and see how it compares to the greatest stock market winners of all time.
This is Chaikin Analytics’ first-ever AI-powered product — and charter spots will be limited.
Sign up for this free event here.
Good investing,
Joe Austin
Senior Analyst, Chaikin Analytics
P.S. Joe has spent four decades watching major technology cycles play out. And he says the AI-plus-IoT convergence is one of the most significant investment opportunities he’s seen. But the window to get in early doesn’t stay open forever. Marc and Joe’s event on June 24 is free — and when you reserve your spot, you get early access to a beta version of the Time Machine right now, no purchase required.
