It is often said that timing can be the make or break in the world of investments. Successful market participants understand the importance of quality in outshining mere timing. While a well-timed investment can lead to fortunes, it is the quality of the investment that truly endures, often paving the way for long-term growth and prosperity.
While the S&P 500 and Nasdaq Composite have reported solid gains exceeding 10% year-to-date, certain stock picks have managed to significantly outperform these indices.
The Potential Soar of Nvidia: A Chart-Topping Journey
Jake Lerch (Nvidia): Nvidia’s ride in the stock market this year has been nothing short of extraordinary, with shares skyrocketing by a staggering 133% year to date. The company’s market capitalization of $2.8 trillion is now trailing only two other U.S. giants (as per latest data): Microsoft ($3.2 trillion) and Apple ($2.9 trillion), with Nvidia swiftly narrowing this lead. Nvidia appears poised to potentially clinch the title of the world’s largest company by the end of 2024.
Investors are grappling with the burning question of whether it’s still a good time to bet on Nvidia. To paint a clearer picture, let’s delve into the numbers.
Nvidia’s share price explosion is a direct result of the rapid growth the company is experiencing. Analysts have recurrently revised their sales projections upward over the past couple of years as Nvidia’s revenue continues its upward trajectory. The revenue chart below helps elucidate this staggering growth:
NVDA Revenue (TTM) data by YCharts
The trailing-12-month sales of Nvidia have more than tripled, escalating from approximately $26 billion to nearly $80 billion in less than two years. This phenomenal growth is largely attributed to the unfolding AI revolution, with Nvidia playing a pivotal role as the prime supplier of AI “brains,” better known as graphics processing units (GPUs). As the AI domain continues to flourish and companies keep pouring substantial investments into fortifying their AI prowess, Nvidia’s sales are poised for further expansion.
The pivotal question that lingers revolves around the sustainability of this growth. While an absolute answer remains elusive, indications point towards a continued upsurge in AI expenditures. Amazon recently unveiled ambitious plans to channel billions into AI infrastructure — a move that underscores the significance of Nvidia GPUs — for its Amazon Web Services (AWS) division. Elon Musk’s xAI venture is similarly gearing up to invest billions in Nvidia GPUs.
To summarize, Nvidia’s remarkable price surge appears well-founded, spurred by its exponential revenue expansion. With the AI revolution set to perpetuate over the coming years, if not decades, steadfast investors need not be deterred by Nvidia’s impressive run thus far, as its trajectory could evidently extend well into the future.
Unearthing Potential in Overlooked AI Chip Sector
Will Healy (Qualcomm): While Nvidia has been the flagbearer in the AI chip domain with all the buzz surrounding it, Qualcomm’s stock has stealthily scaled to historic highs.
This can be attributed to Qualcomm’s diversification beyond smartphone chipsets, with a significant emphasis placed on AI chip development. The advent of Snapdragon 8 Gen 3 has catalyzed on-device AI integration across a spectrum of smartphones and diverse devices.
By June, Qualcomm is slated to introduce a next-gen AI Windows PC chip under its Snapdragon umbrella, posing a credible challenge to the likes of Advanced Micro Devices and Hope this helps
Exploring the AI Expansion in the Tech Market
The Rise of Intel’s AI Endeavor
Intel has ventured into the realm of Artificial Intelligence with its AI Hub for developers, poised to facilitate the at-scale commercialization of various AI applications.
While these AI products are a nascent addition to its financial reports, with revenue hitting $19 billion in the first half of fiscal 2024 (ended March 24), marking a modest 3% rise compared to the same period last year, the company’s net income soared to $5.1 billion, showcasing a robust 29% annual growth fueled by decreased operating expenses and boosted investment profits.
Intel’s Stock Surge Amidst AI Ambitions
Intel’s stock has surged by an impressive 43% since the commencement of 2024, reflecting investor optimism in its AI-focused strategies. However, this upward trajectory has concurrently propelled the company’s Price/Earnings (P/E) ratio to reach 28, its highest level in over three years.
Despite concerns regarding the elevated P/E ratio, which might deter potential investors, the semiconductor giant foresees a 15% uplift in earnings per share at the midpoint. With projections hinting at a fair valuation, the chip manufacturer appears to hold promise for prospective shareholders.
Robinhood’s Impressive Ascent and Future Projection
Robinhood Markets has been on a remarkable ascent, with its stock catapulting by 65% since the onset of the year, showcasing the potential for further growth in the foreseeable future. The company recently unveiled a $1 billion share repurchase initiative, underscoring a resolute confidence in its impending trajectory.
Notably, the upswing in retirement assets under management to over $8 billion within a mere two months signifies the firm’s adeptness at attracting investor funds. Robinhood’s profitability in the first quarter as per Generally Accepted Accounting Principles (GAAP) underscores a positive trend that could persist as assets continue to accumulate on its platform.
The NASDAQ Composite Index: A Viable Investment?
Before delving into investing in the NASDAQ Composite Index, meticulous consideration is imperative.
While NASDAQ Composite Index may not top the charts according to the Motley Fool Stock Advisor analyst team, history unveils the exponential growth potential through exemplary stock picks like Nvidia, which accrued remarkable returns over time. The service’s track record of quintupling the returns of S&P 500 since 2002 entails a promising outlook for investors.
