Trends are trends because they come and go, and the world of investing and markets is certainly no exception.
In 2020, it was work from home. In 2021, it was the Grand Reopening. In 2022, it was all about crypto and digital assets, and a bit of ESG. The year 2023 focused on the Magnificent Seven. And this year? Clearly, artificial intelligence, with world leader Nvidia (NVDA) at the helm.
A quick look at the attention and coverage Nvidia is receiving in the lead-up to its quarterly earnings confirms this as he stock of 2024. It has also quickly catapulted the company into rarefied air, where analysts and investors continually place surreal expectations on how much the company is selling, how much it is expected to sell, and how much demand there will be for its AI-focused products. French fries.
Its most recent earnings report was no exception, with Superbowl-like media coverage before and after Wednesday’s numbers.
There’s no doubt why: Nvidia is clearly the king of AI, with massive, well-known customers like Microsoft (MSFT), Google (GOOG), Amazon (AMZN) and more acquiring its semiconductors and hardware at a ferocious pace to amplify. improve your AI-powered offerings.
But when it comes to investing, what matters most is potential. Even though Nvidia beat expectations for the quarter and issued better-than-expected guidance, the stock temporarily stumbled. Investors were either making profits from previous investments in the stock or were bitter about the fact that the profits (a 94% increase in sales over the three-month period) were not what they used to be.
Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter, and 265% in the fourth quarter of 2023.
Believers in AI maintain that the world is just at the beginning of the transition to the next level of computing, where large language models and algorithms process faster and more deeply than ever before. And Nvidia believers argue that Nvidia is leaps and bounds ahead of its competition in supplying the necessary chips and hardware.
“We are in the early stages of a transformative moment in computing,” Creative Strategies head of consumer technology Ben Bajarin told Yahoo Finance on Thursday after the earnings report.
On the other hand, some analysts suspect that Nvidia’s customers, including Meta (META), Microsoft and Google, could recoup the billions they are spending on AI hardware.
Nvidia’s ability to keep up with demand for its highly sought-after Blackwell chip is also giving some analysts pause, including Emarketer’s Jacob Bourne.