1) The AI Market is Growing Exponentially
A) AI Market Size Forecast from 2023 to 2030 Is Blowing Up...
Source: Statistica 2023 study
AI market size worldwide is predicted to increase times 1,000.
That's +100,000%.
AI drives innovation and allows companies to deliver a better product to their customer.
Netflix, Spotify, and StocksToBuyNow, all leverage AI for better recommendations.
- Netflix for movies.
- Spotify for music.
- StocksToBuyNow AI for stocks.
The ability to deliver personalized and live experiences drives better customer's satisfaction.
B) Exponential increase in companies mentioning AI in their financial reports
According to Goldman Sachs study: 16% of the top / biggest 3,000 companies in the US mentioned AI in their 2023 revenues reports.
Source: Goldman Sachs 2023 study
Governments, research institutions, and tech companies are investing heavily in AI research and development.
C) Digital technologies are now everywhere
There is an explosion of data being generated every day:
Source: Statistica 2023 analysis
AI thrives on data and the ability to analyze large datasets to derive meaningful insights.
This abundance of data provides a fertile ground for AI algorithms.
D) Human workforce is shifting into AI and Tech
McKinsey study on the total hours worked in Europe and United States: 2023 vs 2030 estimate in billion
Source: McKinsey 2023 analysis
By 2030 there will be a 65% increase in technology workers.
AI is freeing up human resources to focus on more critical and creative activities.
This increased automation can lead to improved operational efficiency.
Automation and artificial intelligence will accelerate the shift in skills that the workforce needs.
Prospects and innovations in the AI sector make it a buy. But what about Nvidia stock?
1) Nvidia Financial performance
The Big Picture
Nvidia is definitely not a bubble, it's change in revenues is supporting the change in share price.
The company grows with and facilitates the growth of the industry it relies on: AI.
Nvidia's change in Net Income is higher than the change in share price.
The company did not release new shares (that could have diluted the share price).
This is confirmed by the change in Earnings per Share (EPS is Total Earnings divided by Number of Shares available).
The change in EPS confirms Nvidia has never been as discounted as it is now.
Wish you bought Nvidia at $50 before it reaches $500?
This is what Nvidia looked like in 2018 when I bought it at $50 📈
And this is what happened to NVDA stock price right after 📉
The timing was not great, I had lost -35.6% on Nvidia.
The Short Term Picture
There are only 3 ways to predict the short term.
A) You know someone who works at Nvidia and can disclose revenues before they go public
Anyone who trades and buys stocks based on insider information will be fined and jailed: it is a crime, don't mess with the SEC (Security Exchange Commission).
B) You know someone who can influence macro economics and political events
Politicians and insider trades are disclosed on the SEC's website we track what they buy / sell and notify you for stocks you follow in StocksToBuyNow App.
C) You have access to news and information more efficiently than others
StocksToBuyNow tracks Hedge Fund activity (form 10Q) and notify you in StocksToBuyNow App.
We have social bots that monitors the web and alert you as soon as relevant news is detected.
3) Nvidia Competitive landscape
Will Nvidia take the biggest share of the pot? What are other alternatives?
A) Competitors sorted by Price to Earning
First we sort competitors by PE ratio (Price of the stock / Company earnings)
This shows you which stocks are 'hyped' with high growth expectations.
The lowest the PE, the more discounted is the stock.
It means the stock is undervalued, but often for a reason.
However: the highest the PE, the more overvalued is the stock.
Again here: the market could expect something big.
Nvidia is a Better Option than ARM
We see that ARM and AMD are even more 'hyped' than Nvidia!
- ARM is overhyped: Softbank marketed it all over the news.
→ Never buy a stock right after Softbank.
- ARM stock trading volume spiked because of its IPO.
→ Everyone bought the stock over a short interval of time.
- Their IPO was pre released, you could not buy the stock before.
→ Everyone rushed and made the stock spike for no reason.
- Apple pre releases new iPhone model before the official date.
→ It is a marketing strategy / market manipulation tactic to create the IPO rush.
- When you buy the stock on IPO, the company doesn't receive 100% of investments.
→ 15% of your money goes to the banks which setup the IPO
Conclusion: ARM is overvalued, you better buy Nvidia.
Nvidia is a Better Option than AMD
Let's select AMD, it now shows in orange:
We look at the changes in prices over the last 2 years.
AMD price 2 years ago has been scaled to match Nvidia price.
- 1) Nvidia stock price did x4, Nvidia's Net Income and EPS also did x4 → it validates the stock price change.
- 2) AMD Share Price Increased, but AMD Net Income decreased a lot and its EPS decreased
- 3) This confirms AMD is overvalued, people are buying it because they think the 'share price is low', but price doesn't mean anything, company market value matters.
- 4) People also think Nvidia increased but AMD has not yet, so it should increase as well, but AMD financial performance has nothing to do with Nvidia.
- 5) You might make money with AMD, but not as much as you would with Nvidia, the price will rally back to match its financial performance and it will underperform.
Conclusion: you better buy Nvidia than buy AMD.
So why is AMD price so high compared to its earnings? 🧐
Most people don't understand what they are doing 🙄
They see Nvidia price spiked so they buy AMD hoping it does the same.
They think they will get a better deal with AMD ❌
We just looked at competition financial analysis ✅
B) Competitors sorted by Valuation
Nvidia is first! The biggest whale out there.
Guess who you should compare it with?
If you had to pick a similar company, which one would be your next buy?
Hint: (the second one)
