Nvidia’s Run May Be Done
Doug McIntyre and Lee Jackson discuss the dangers of investing in AI stocks, particularly the risk of buying at the peak and the potential for significant losses. They compare the current AI investment craze to the dot-com bubble, warning that late investors are often the biggest losers. They highlight the example of NVIDIA (NASDAQ: NVDA), which only broke out after its gaming chip success, and emphasize caution with other AI-related stocks. They also express skepticism about Microsoft’s (NASDAQ: MSFT) AI-driven growth, despite its partnership with OpenAI, and suggest looking at earnings reports to gauge the real impact of AI on company performance.
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Transcript:
There’s a point of no return when you invest in this, because you know, that’s always the more greater fool that somebody will always be the last one to turn off the lights when they buy NVIDIA at the top and, or, or whatever stock has got AI at the end of the name.
And again, that’s going to run out because the suckers that come in at the end are always the most disgruntled because they’re the biggest losers.
And it’s one thing to make a lot of money in a stock.
I mean, NVIDIA traded under $10 for years, years.
And, and, and they didn’t even break out through that until they had a chip that was used by the gaming community.
Yeah.
And so, I mean, Anybody that wants to pick up the last proverbial nickel in front of a bulldozer, they get what they deserve to some degree.
But I saw it during .com, and we’ll probably see it again.
Well, one of the reasons I agree with the observation that you’ve just expressed is that Microsoft is supposed to be the AI poster child, other than NVIDIA, because of the open AI arrangement.
That stock has lost gas.
I mean, it might be up as much as the S&P is, you know, some of the other magnificent seven are up a lot more.
And that tells me that the savvy people buying in and out of these stocks have sort of said to themselves, I’m not so sure that we should look at Microsoft’s earnings and figure that they’re going to say, oh, wow, AI, you know, it’s supercharged our earnings.
I don’t think that’s going to happen.
No, I don’t either.
And I think people are looking, I mean, AMD has had a huge bounce because people are like, okay, what can I buy that’s competitive to NVIDIA?
And so AMD is a player in there.
And I think to some degree, people are starting to look at Intel again and things of that nature.
So yeah, you don’t want to be, again, the last one in line because you’re inevitably the loser.
Yeah.
Well, look, we can look at Microsoft’s earnings.
I think two or three of the, you know, probably Google, maybe Amazon, certainly Apple.
You know, once they put AI into their products, it won’t be this quarter, but the quarter after the iPhone 16 comes out, there’ll be a lot of talk about that.
So let’s come back once we start to see some earnings that AI should have helped and maybe they didn’t.
Yeah, well, it’ll be something that not only we scrutinize, but you can bet that Wall Street strategists really scrutinize.
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