Bull market believers certainly owe a lot to AI in 2023…
Whilst most are worrying about inflation and growth slowdowns, AI is proving to be the one holdout for optimists. A fledgling piece of technology that is primed to revolutionise the world like many other advances before it.
And as always, early investors are reaping the reward from it.
Overnight, US chipmaker NVIDIA Corp [NASDAQ:NVDA] was the big market standout. The company is estimating that revenue will exceed current estimates by up to 50% thanks to AI chip demand.
That possibility sent the share price into overdrive. NVDA stock finished the trading day up 24%, and is close to making it to the US$1 trillion market cap territory.
It’s pretty clear that the AI theme isn’t going away any time soon.
And more than that, it’s proving quite lucrative for big tech at a time of extreme volatility.
But with such incredible and swift success comes doubt. You can’t deliver these kinds of explosive stock moves without someone somewhere questioning if it may be the next investing bubble…
History repeating
Let’s be frank for a moment. AI is certainly a bit of a buzzword in the investment sphere right now.
There are a lot of businesses, both within and outside of the typical tech space, that are hyping up their AI potential. Does that mean all of them will eventually yield outstanding productivity from said AI?
Unlikely.
The reality is that most businesses discussing or implementing AI solutions right now will likely not amount to much. You have to remember that we’re just beginning to scratch the surface of what is possible with this new tech.
For that reason, calling AI a bubble is certainly plausible. But what you need to understand is that it’s the implementation and expectations of the individual businesses that’s creating the bubble, not the tech itself.
Just like the dotcom bubble of the early 2000s, the tech will long outlive the buzzword frenzy. And, as we see in today’s biggest corporations, will likely create incredible opportunities for long-term profits.
The hard part for individuals like you and I is to find stocks like Microsoft rather than Pets.com…
But my overall point to you would be to embrace the frenzy…just in a more rational way. Because bubble or not, if you play your cards right, you can always find ways to profit as a savvy investor.
Invest like a zoomer
See, whether you’re a diehard trader or not, you can always make money from the market by pre-empting trends. It’s not always easy to do, but it is possible, and it can be very, very lucrative.
This is something our newest Money Morning editor, Callum Newman, knows all about.
Cal has been on top of the Aussie small-cap sector for years. He’s seen the best and the worst the sector has to offer, and he knows how to navigate his way around the booms and busts better than most.
That’s why, right now, he believes one of the best ways to profit from small-caps is to look at popular trends like AI. Because in today’s day and age of social media, ‘finfluencers’, and meme stocks, you can make good money without the need for good fundamentals.
As Cal will tell you:
‘“Next big things” seem to be coming with more ferocity and frequency than at any time in the history of stock markets.
‘The potential upside — if you get your timing right — can be jaw-dropping.
‘The potential downside — if you hang on too long — can be devastating.’
It’s a tricky balance to get right, but it’s worth a punt if you’ve got the stomach for it. Because as AI and NVIDIA have shown, the appetite for this sort of explosiveness is riper than ever.
To check out more about this trend and these ‘Tik-Stocks’ (as Cal calls them), click here.
Because whether we’re headed for a boom or bust is inconsequential.
The fact of the matter is that gains are made regardless. You just need to know where to put your money before everyone else does. And that is exactly what Cal is doing for his subscribers…
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
