Saturday, August 31, 2024

📌 Your End-of-Week Bulletin - August 31, 2024

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Manward Digest
 

Nvidia Just Fell Into the Same Trap as Google and Microsoft

Alex Moschina

Alex Moschina
Publisher

Welp, it happened again.

Following in the footsteps of Alphabet (GOOGL), Microsoft (MSFT), and Advanced Micro Devices (AMD), everyone's favorite AI chipmaker reported blockbuster earnings...

And then the stock promptly sank like a stone.

[Alex Finally Reveals His Personal Investments! See Where He's Investing $100K+]

That's right... not even the mighty Nvidia (NVDA) with its 122% sales growth and $16.6 billion in fiscal Q2 profits was immune from the trend we've seen play out again and again...

Enough is never enough.

No siree. Investors won't settle for a mere doubling of sales growth when Nvidia already showed it could triple sales growth in previous quarters. Those are rookie numbers!

CNN summed it up thusly:

Nvidia headline
 

And so, Nvidia shares were cast down into the fires of Mordor.

Or rather... they dropped 7%.

Never mind the fact that the company announced it's ramping up production of its next-gen Blackwell chip...

Or that it's expecting to ship billions of dollars' worth of units in the fourth quarter.

Who cares about those sorts of trivialities?

Ah well.

We shouldn't dwell on the market's impetuous reaction to Nvidia's earnings report. If we did, we might miss what should be the real headline for investors...

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That after nearly two years of AI market dominance, demand for Nvidia's wares only continues to soar.

Over the past eight quarters, the company's total revenue has jumped more than 400%...

Nvidia QR

Source: Nvidia. View larger image

And while Wednesday's report showed a "mere" doubling of sales of growth from the previous quarter, there's still plenty of reason to expect growth to keep ticking up in the months and years ahead.

For one...

By the end of 2026, Gartner predicts 100% of new enterprise PC purchases will be AI PCs... up from an estimated 22% in 2024.

That would be a monumental shift over a very short period.

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Then there's McKinsey's research that shows "growth for semiconductors related to artificial intelligence is expected to be five times greater than growth in the remainder of the market."

It's more proof of what Shah noted last week... that concerns over the supposed "AI bubble" may be overblown.

For now, we may just have to accept that anything less than perfection won't be good enough for Wall Street.

But as Shah wrote yesterday... that's good news for us.

It should create plenty of "buy the dip" opportunities.

Have a great (long) weekend,

Alex

P.S. While the spotlight has been on Nvidia for the past two years, most investors have missed out on an unknown AI stock that essentially acts as Nvidia's Secret Partner. If you've been looking for a cheaper, potential-packed alternative in the AI space, you've got to see what this tiny company is up to - click here.

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Rate cuts are coming… which means investors will be on high alert for high-dividend-paying stocks. That's why you should take a look at this 15% yielder with solid growth ahead. Get the ticker here.

Read This Before You Buy Nvidia

Nvidia - Buy or Sell

Analysts are calling Nvidia the most important stock of the year. But this week's market action suggests otherwise. Should you buy? Here's what Shah says...


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Alex Moschina

Alex Moschina is the Publisher of Manward Press. A gifted writer, editor and financial researcher, Alex's career in publishing began more than a decade ago when he worked at one of the world's leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.

 

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