The stock market, much like everyone else, seems to be enamored with the shiny new toys of the AI world. But while everyone is focused on things like chatbots and AI-generated art, the real, transformative AI revolution is happening quietly behind the scenes.
We’ve seen it this week, with Nvidia, the darling of the AI stock world, getting hammered despite excellent earnings. Why? Because investors are starting to get nervous about the future of AI.
But, just because some AI stocks are experiencing a short-term pullback doesn’t mean the AI revolution is slowing down. In fact, it’s just the opposite. The companies with the deepest pockets in the tech world, like Microsoft, Amazon, and Meta, have all recently announced plans to increase their AI spending. See these quotes directly from their recent earnings calls.
And it’s this behind-the-scenes revolution that’s going to be the real driver of profits in the coming years. So, we need to shift our focus from the hype to the real action, the AI that’s changing industries and making a real impact in the world.
Nvidia: The AI Engine
Nvidia is the undisputed leader in AI chips, and its GPUs are powering the AI revolution. The company’s recent earnings report showed that demand for its chips is still incredibly strong, and the AI boom is in its early stages.
Why we like it: Even though many analysts are predicting a slowdown in NVDA’s price, we’re still bullish. We’re seeing consistent, clockwork behavior in the stock price. After every earnings report, NVDA’s P/E drops to around 50x, but within the next 3 months, the stock rallies to reclaim a P/E of closer to 80x. Read the breakdown of this playbook in detail here.
Apple: Quietly Embracing AI
Apple, the tech giant known for its sleek devices and stringent control over its ecosystem, is finally making a big move into AI. They’re reportedly partnering with OpenAI to bring next-gen AI to the iPhone via Apple Intelligence. For more insights on Apple’s new AI plans, check this out.
Why we like it: Apple is notoriously secretive about their plans, but their reported investment in OpenAI and upcoming Apple Intelligence launch signal a complete shift for the company. By Christmas, tens of millions of people could be using this advanced AI right in the palms of their hands.
Super Micro Computer: A Contrarian Play
Super Micro Computer is a lesser-known player in the AI server space. It recently experienced a sharp decline in price after a short-seller report and news about their delayed financial statements.
Why we like it: Despite the negativity, we see this as a classic contrarian opportunity. Super Micro’s focus on AI servers puts them in a strong position to benefit from the ongoing AI boom. We’re also looking for potential value in the stock, driven by a possible bounceback, especially as we see the AI world expand.
- Key Insights from the Articles:
- Eric Fry: We’re on the verge of a massive wave of AI disruption. Don’t just focus on the flashy AI tools; look for companies driving the real revolution behind the scenes.
- Luke Lango: OpenAI could launch a new AI model, Strawberry, this fall. This model could be more impactful than ChatGPT.
What to Do: While the stock market may be wobbly right now, these three stocks offer a compelling opportunity to profit from the quiet AI revolution. Consider adding them to your watchlist and, if you like, taking a position in them, perhaps with a buy-the-dip strategy since the market is experiencing some corrections.
Tomorrow, we’ll delve deeper into another exciting opportunity, “The Fed’s Rate Cut Playbook: 5 Stocks Poised to Surge as Rates Fall.” Stay tuned!