If the doomsayers are right and the Artificial Intelligence thematic is just a market bubble, it looks like there’s still plenty of value left in it yet.
Shares in NVIDIA – perhaps the most popular Magnificent 7 tech megacap stock this year – continue to remain resilient despite two fairly recent waves of market panic.
At the start of this week, shares in NVIDIA were up more than +13% over the last five days. Over the last six months, they’re currently up more than +30%.
The consistent confidence shown in NVIDIA from markets reflects a resilient expectation from the investing community so-called AI (generative content models and ‘smart’ automation programs) continues to offer an unprecedented value proposition in our increasingly digitised world.
(With that said, the ‘premium’ companies in the US get for mentioning AI in their earnings reports is starting to fade away.)
That NVIDIA is a market darling in the year of 2024 makes sense: the household computer only became widely affordable to the middle class a quarter century ago.
If you consider agriculture the first and the printing press the second, we’re in the infancy of humanity’s third great industrial revolution. And we’re basically heading into sci-fi territory in the first minutes of the game.
NVIDIA’s bounceback comes even as we saw a panicked sell-off in the shares just last week (Week 36 of 2024) – the second such ‘test’ of NVIDIA’s resilience we’ve seen this year. And what a test it was.
In only one trading session, NVIDIA shed US$415B – for those playing at home, that’s as much money as Chevron is worth. If you wanted proof that Big Tech is the new Big Oil, that’s surely a smoking gun.
Shares were sold off as earnings from the tech giant disappointed, but that sour mood evidently didn’t last for long.
Nor did it last long when the same thing happened around a month-and-a-half ago.
AI might have its critics: but if it’s all just noise, that certainly isn’t obvious yet.