Exploring the Future of AI Trading Beyond NVIDIA Corporation

Following a recent analysis by Goldman Sachs, concerns over the overvaluation of NVIDIA Corporation (NASDAQ: NVDA) have been dismissed. The surge in expected profits, as highlighted by the analyst Ryan Hammond, indicates that the current upticks in stock price are justified.

Throughout this year, NVIDIA’s shares have seen an 84% increase, and a staggering 522% surge since the beginning of 2022. Hammond explains that the price-to-earnings ratio has remained relatively stable since the start of 2023, with the majority of the stock price growth attributed to higher profits.

The worries of a technological bubble spanning across the sector, as Hammond suggests, can be cast aside. The expected profit growth over three years for the top ten tech companies stands at around 15%, notably lower than the 24% observed during the tech bubble in 2000. Furthermore, current valuations stand at a 28-times earnings multiple, significantly lower than the 52-times multiple from 2000.

The advent of the current artificial intelligence phase in 2023, marked by the introduction of ChatGPT, has delivered substantial profits for NVIDIA, according to Hammond. However, there are three subsequent phases in AI trading that present numerous investment opportunities.

**FAQ:**

1. **What concerns regarding NVIDIA are addressed in the Goldman Sachs analysis?**
– The Goldman Sachs analysis tackles concerns regarding the overvaluation of Nvidia Corporation (NASDAQ: NVDA) and asserts that the stock price growth is justified due to the expected rise in profits.

2. **What stock price increases have been recorded for NVIDIA this year?**
– NVIDIA’s shares have increased by 84% this year and by 522% since the beginning of 2022.

3. **Why is the majority of NVIDIA’s stock price growth attributed to higher profits?**
– Analyst Ryan Hammond explains that the price-to-earnings ratio has not changed significantly, and most of the stock price growth is due to higher profits.

4. **Can concerns about a technological bubble in the sector be dismissed?**
– According to Hammond, worries about a technological bubble in the sector can be dismissed. The expected profit growth for the top ten tech companies is lower than in 2000, and valuations are substantially reduced.

5. **What are the three subsequent phases of AI trading according to Hammond?**
– The three subsequent phases of AI trading according to Hammond are: Phase 2 – Infrastructure, Phase 3 – AI-reinforced revenues, Phase 4 – AI productivity.

6. **Which companies are listed in Phase 2 – AI Infrastructure?**
– Companies involved in AI infrastructure in Phase 2 include, among others, Broadcom Inc (NASDAQ: AVGO), Advanced Micro Devices Inc (NASDAQ: AMD), Intel Corporation (NASDAQ: INTC), GlobalFoundries Inc (NASDAQ: GFS).

7. **Which companies are analyzed in Phase 3 – AI-enhanced revenues?**
– The analysis includes companies that mention AI applications aimed at increasing revenues, such as Adobe Inc (NASDAQ: ADBE), Meta Platforms Inc (NASDAQ: META), or Apple Inc (NASDAQ: AAPL).

8. **What are the suggestions for investing in emerging tech trends?**
– Investors can seek exposure to evolving tech trends through ETF funds like the Global X Artificial Intelligence & Technology ETF (NYSE: AIQ) or iShares Semiconductor ETF (NYSE: SOXX).

**Definitions:**
– **Technological Bubble:** A period of excessive growth and market euphoria in the technology sector, which later leads to a sharp decline in stock prices.
– **Artificial Intelligence (AI):** A field of computer science that deals with creating computer systems capable of performing tasks that would typically require human intelligence.
– **Price-to-Earnings Ratio:** A measure that compares a company’s stock price to its earnings per share.

The source of the article is from the blog trebujena.net