Nvidia and AI - 02/02/24

Chart of the Day: (02/02/24)

Nvidia and AI

Open Position: 3.8%

ACB: $47.82

Last $59.78

Stop: TBD

• [Note: We own Nvidia through the Canadian Depository Receipt which trades on the Toronto Stock Exchange, so when you check the price, make sure you look at that listing as opposed to the US based listing.]

• Artificial Intelligence (AI) refers to the development of computer systems that can perform tasks that typically require human intelligence. These tasks include learning, reasoning, problem-solving, understanding natural language, speech recognition, and visual perception. AI systems aim to simulate human cognitive functions and have the ability to adapt and improve their performance over time.

• My view is that not many people fully understand the ramifications of the advancements in AI, on society. 

• I’ve seen it compared to the discovery of fire and the invention of the Gutenberg Printing Press. No pressure AI.

• Nvidia is a core provider of computer chips that facilitate the immense computing power driving AI advancements.

• In January, NVDA resumed its up move after consolidating in a controlled base since August of last year. On Feb 1, NVDA looks to be coming out of a high tight (flag) consolidation of this breakout.

• I’m not saying that the strength in this position, along with other open positions like AMD and Arista Networks, reminds me of the Tech craze in 1999. I am saying that there are similarities. 

• The top ten stocks in the MSCI USA Index, including the 'Magnificent Seven,' account for 29.3% of the index, nearly matching the dot-com peak of 33.2%.

• The current sector allocation, with only four sectors represented among the top ten, including AI, is even less diverse than during the dot-com bubble. 

• Despite these stocks commanding a higher valuation premium, overall valuations are not as extreme as in the 2000s. 

• All eyes in the global market are on AI.