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Navigating the Risks and Rewards of the AI Trade
2024-07-25 22:59:45
Artificial Intelligence
Technology
Business

Navigating the Risks and Rewards of the AI Trade

The AI trade is under scrutiny as Morgan Stanley's CIO raises concerns about its impact on revenues. While Nvidia hits a $3 trillion market cap, Salesforce and ServiceNow face slower AI adoption rates.

Goldman Sachs highlights lesser-known AI opportunities. Elon Musk seeks input on funding xAI amid Tesla's challenges.

The environmental cost of AI's dominance is evident, with GPT-3 creation consuming vast energy and generating substantial CO2. Investors are advised to consider a diversified sector-based investment approach amidst the AI hype transition towards practical industry applications.

Nvidia's stock performance remains strong, with optimistic analyst projections, underlining the company's pivotal role in the AI sector.

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Investing in the Future: AI Stocks to Consider

Investors looking to capitalize on the transformative potential of artificial intelligence (AI) should consider these three stocks: Nvidia, Microsoft, and Palantir. Despite potential challenges, Nvidia's AI chip dominance and CUDA software provide a strong competitive advantage. Microsoft expects double-digit earnings growth and Palantir's flexible AI platform has the potential to expand to over 20,000 large businesses. Meanwhile, Meta Platforms offers AI-driven growth potential with various AI products and technologies. These stocks provide investors with diverse exposure to the booming AI industry. However, caution is advised, as the AI trade faces risks due to lack of impact on revenues and earnings. Furthermore, the performance of AI stocks can be volatile, as seen with Palantir's recent stock price increase. Nevertheless, with the generative AI industry expected to grow significantly and software being touted as the next big AI opportunity, investing in AI stocks can be a lucrative long-term strategy.

AI Impact: Alphabet's Profits Surge Amid Growing AI Investments

Alphabet's Q2 profits soared by 29%, fueled by AI products driving billions in cloud revenue. Despite a $2.3 billion AI research loss, net income hit $23.6 billion on $84.7 billion in revenue, surpassing forecasts. CEO Pichai highlighted a $10 billion cloud revenue milestone, with generative AI solutions reaping billions. Google's AI focus includes DeepMind and Research for ads and cloud. While Alphabet shares held steady, up 31.5% in 2024, Nvidia outperformed, soaring by 154.5%. IBM exceeded revenue estimates on software and AI strength, while Nvidia's partner Vertiv's orders surged, fueled by AI demand. Nvidia faces pressure as Alphabet and Tesla earnings impact stock, yet it may benefit from increased GPU demand from Google Cloud and Tesla's AI ventures.

Read 9 more recent news on this topic

The press radar on this topic:

Yahoo Finance
25. Juli 2024 um 12:00

Nvidia Stock Tries To Climb Back After Harsh Sell-Off; Is The Stock A Buy Now?

Technology
Finance
Nvidia (NVDA) is attempting to recover after a three-day sell-off, but analysts remain optimistic about the stock. Despite recent weakness, Citigroup, Cantor Fitzgerald, and Jefferies have raised their price targets and maintained their buy ratings for Nvidia, citing the company's next-generation AI chip plans. Nvidia is a leader in the AI investment theme and has shown strong profit and sales growth, but investors are advised to wait for selling to subside and for another base or follow-on buy..
The Street
31. Juli 2024 um 09:45

The big green price of AI dominance can't be ignored anymore TheStreet Daily Newsletter

Technology
Environment
Economy
Creating the GPT-3 model consumed 1,287 MWh and 552 tons of CO2, equivalent to 123 gasoline vehicles for a year. Data centers powering AI and cloud services account for 1-1.5% of global electricity use, challenging Microsoft and Google's climate commitments as their data centers consume 24 TWh annually, surpassing nations like Iceland and Ghana.
Yahoo Finance
24. Juli 2024 um 16:00

The hot AI trade is entering a danger zone: Morgan Stanley chief investment officer

Technology
Finance
Economy
Morgan Stanley CIO warns of dangers in the red-hot AI trade, citing lack of impact on revenues and earnings. Salesforce and ServiceNow see slower-than-expected AI adoption, while Nvidia reaches a $3 trillion market cap on strong demand. Elon Musk expresses concern over accessing state-of-the-art Nvidia GPUs. Goldman Sachs portfolio manager reveals under-the-radar AI plays. CIO credited with predicting the 2022 "rolling correction" in stocks.
The Street
26. Juli 2024 um 12:46

How to invest in AI hype without stock picking TheStreet Daily Newsletter

Technology
Finance
Sonders advises investors to take a balanced, sector-based approach with factor screening, focusing on quality companies that blend growth and value. She notes the outsized impact of individual tech stocks like Nvidia, and the evolving focus from AI hype to practical adoption across industries.
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