Written by Barbara Kollmeyer
Important information on US trading days
“We believe NVIDIA can surpass Apple by leveraging the artificial intelligence economy, which would add an estimated $15 trillion to GDP.”
That was Beth Kindig, chief technology analyst at I/O Fund, who made some prescient remarks about AI chipmakers in August 2021. Fast forward, and investor favorite Nvidia (NVDA) has a market cap of $2.23 trillion, while Apple (AAPL) has a market cap of $2.72 trillion. Trillion.
The I/O Fund is an actively managed technology portfolio that provides stock research and trading alerts, and is credited with a list of notable past predictions. Kindig made another bullish call on Nvidia in early 2023, when the stock rose 238%.
On today's call, Kindig offers some fresh technology thoughts through a chat with Jordi Visser, CIO and Chairman of Weiss Multi-Strategy Advisers via Real Vision. In it, she sees Nvidia reaching a minimum valuation of $10 trillion by 2030, largely thanks to its AI software.
Similar to what we've seen in gaming and mobile, AI will boom and bust, “possibly even faster,” with only a few winners remaining. But Kindig sees AI dominance and monetization by Nvidia, Alphabet (GOOGL), Meta (META), and Microsoft (MSFT) lasting a little longer.
Kindig said Nvidia's revenue growth is “not enough to protect technology as a sector,” adding, “The lack of risk reward has led us to take precautions, such as reducing our position in server maker Supermicro (SMCI). “We are taking lessons,” he said. For us now. ” Click here to learn more about the issues with Super Micro.
What other sectors and semiconductors will benefit from AI? Kindig says investors should “get used to” Semi because it accounts for 50% of the AI market. Kindig said Semi will be an “AI software player.”
Cybersecurity is also one of her favorite areas because of the rising cost of protecting businesses from attacks. When it comes to cloud stocks, she thinks 50% of those companies will be gone within her 10 years.
I/O does not own Broadcom (AVGO), which provides semiconductor and infrastructure software solutions. That's because “custom silicon is desirable to big technology companies,” he said. And she says she's keeping an eye on AMD (AMD), which says it's “looking to take on Nvidia this year.”
“NVIDIA had no competitors. You can probably argue all over how strong AMD is as a design company. It's completely undervalued. This company is very strong in design. , Intel is not as powerful,” Kindig said.
Investors should also keep an eye on so-called edge AI (AI models installed directly on devices that collect and process data locally) as smartphones, laptops, and device upgrades are scheduled.
As for her final words on Nvidia, she noted that the company's valuation is currently hovering around its October 2022 low, calling it “eerily low” and calling the company a “buy on the edge.” , on the other hand, “Microsoft is at a valuation level that is like Mount Everest.''
“We're waiting for a breather, and then we'll probably continue working on Nvidia,” she says.
market
The S&P 500 SPX is heading for a new record as stock futures (ES00) (NQ00) rise across the board and bond yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y fall following the Fed. Gold (GC00) continues to rise, with Nikkei JP:NIK and Hang Seng HK:HSI also surging. Follow MarketWatch's live market blog.
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Micron stock (MU) has soared as the company's AI profits have eclipsed it.
Antitrust litigation against Apple (AAPL) could begin as early as Thursday.
Reddit stock will debut on the NYSE under the symbol “RDDT” at the high end of the range at $34 per share. Here's how social media groups make money. For more coverage, follow MarketWatch's live blog.
Chewy (CHWY) stock is falling after the pet supplies retailer's unexpected profit came off with a warning.
Shares of Darden Restaurants (DRI) are falling after Olive Garden's parent company lowered its earnings forecast after seeing an unexpected drop in sales. Accenture (ACN) is leading the way.
The latest data showed weekly jobless claims fell to 210,000 with no sign of an increase in layoffs, while the Philadelphia Fed's manufacturing survey remained in expansion territory for the second month in a row. Going forward, the S&P U.S. Services Index and Manufacturing Purchasing Managers Index will be released at 9:45 a.m., leading indicators and existing home sales will be released at 10 a.m., and Fed Vice Chairman for Supervision Michael Barr will be announced at noon. His comments are expected.
The Swiss National Bank cut interest rates by a quarter of a percentage point, Turkey raised interest rates to 50% and the Bank of England left them unchanged. Mexico's central bank will hold a meeting later.
FTX CEO John Ray accused founder Sam Bankman Freed of being callous about victims and living a “life of delusions.”
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top ticker
The most searched tickers on MarketWatch as of 6 a.m. are:
Ticker Security name NVDA Nvidia TSLA Tesla AAPL Apple MU Micron Technology TSM Taiwan Semiconductor Manufacturing SMCI Super Micro Computer AMD Advanced Micro Devices GME GameStop NIO Nio PLTR Palantir Technologies
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Michael Kantrowitz, Piper Sandler's chief investment strategist, wrote in a note that the tech sector has become a simplistic bet these days because many smaller technology companies are unprofitable and “significantly underperform.” He told clients that just focusing on it is not a viable strategy.
His graph below shows the relative performance of high return on equity and negative earnings per share in the S&P 600 (small cap) technology sector.
“So the calls in tech are more about fundamentals and stock selection than buying the next hardware or semiconductor stock,” the strategist said.
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-Barbara Kollmeyer
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03/21/24 0839ET
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