Nvidia Has Been The Best Stock To Own

Doug McIntyre and Lee Jackson discuss Microsoft’s (NASDAQ: MSFT) recent performance, noting that despite the hype around its AI ventures, the stock hasn’t outperformed the S&P 500. They explore reasons for this, including the possibility that the AI trade is overbought and the anticipated benefits haven’t materialized as quickly as expected. They question the immediate business value of AI investments and consider whether AI’s long-term potential justifies current valuations. Jim Cabello from Goldman Sachs is mentioned, sharing a similar view that the AI trade may be overextended but acknowledges its long-term promise.

But There Is A Changing Of The Guard

Nvidia (Nasdaq: NVDA) has minted countless millionaires the last few years. But with the AI money printer potentially running dry for the company, investors are starting to wonder what the next Nvidia could be, and our analysts have identified three stocks that could deliver Nvidia like returns for the next few years. You can access the report free of charge by clicking here now.

Transcript:

So what happened to Microsoft?

If you look at the chart year to date, they do okay but they only do about what the S&P 500 has done.

You’ve got better stock if you bought Amazon or you bought Alphabet obviously or Meta.

Or Meta but I’m going to take the Nvidia off the table because right right it’s for crazy people.

So they were supposed to be the big AI winner.

The open AI deal they’re putting AI into all the Microsoft products, Windows.

I don’t get it. What happened?

I think it’s a combination of all of the big tech, for the most part, is way overbought.

As we’ve seen recently in trading, there’s been a huge rotation out.

But I think that it got ahead of itself on the initial chat GPT early investment and how big of a game changer it was going to be.

And then it doesn’t seem to be translating through as well as earnings at Azure are.

I think what people worry about right now is that AI has gotten out over its skis and that it could be a few quarters.

It could be a few years before all this money that people are investing in AI startups are getting billions and billions of dollars.

Big companies like Microsoft are investing at the same level in their products.

We don’t know whether this is going to translate into a good business to business arrangement for these companies.

And I’m not convinced at all that this is a good business to consumer thing.

I mean I can get free I can go online and get all sorts of free AI tools a free chat.

I mean absolutely almost anything.

Yeah and I think that and I think I was talking with you this on this subject earlier that I think I told you Jim Cabello over at Goldman Sachs says you know essentially what you said is that the AI trade is way out over at skis.

And to the extent that it’s added so much to the market cap of the S&P 500, it’s just been printing money for investors month after month after month after month.

And one of his points was, is that, okay, so if you go in to convert your business to be run by AI, how expensive is that going to be?

Are you going to be able to fulfill everything like you’re like you’re wanting to when you have actual people on board?

So, I mean, clearly and he thinks this as well.

Clearly, Cabello thinks it’s it’s a watershed moment now that may be part of a big backup, but that the long term is there.

But again, you’re not going to sell it to people because it’s being offered for free.

So it’s going to have to work in business as a an efficiency tool.

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