Artificial Intelligence Is the Real Deal
By Brian Nelson, CFA
Artificial intelligence [AI] is the real deal, in our view, and Nvidia (NVDA) has the chips to power it. When we first tested generative AI via ChatGPT, we were blown away by the technology. There may be some hype surrounding the technology powering large language models at these early stages of development, but from where we stand, the future is as much AI as the present is Apple products, Google (GOOG) (GOOGL) search, and Microsoft (MSFT) and Amazon (AMZN) cloud.
Nvidia AI is the latest catalyst to propel the area of large cap growth, which continues to trounce other areas of the market. Since the release of the first edition of the book Value Trap, an ETF that tracks large cap growth has outperformed an ETF that tracks small cap value by ~80 percentage points, beating the market return handily, while leaving the strategies of dividend growth and real estate investing in its dust. We continue to like the area of large cap growth, and while we won’t be adding Nvidia to any newsletter portfolio, we’re loving the big cap derivative plays on AI, including Microsoft, Alphabet and Apple. |
