NVIDIA (NASDAQ:NVDA) reported strong results for its fourth fiscal quarter of 2024 on Wednesday (February 21).Quarterly revenue hit a record US$22.1 billion, 22 percent higher than Q3 and up 265 percent compared to a year ago. The company said gains were driven primarily by data center revenue, which came to US$18.4 billion, up 27 percent from Q3 and 409 percent versus last year. Non-GAAP earnings per diluted share were up 28 percent from Q3, coming in at US$5.16; that's higher than analysts' expectations of US$4.64 and represents 486 percent year-on-year growth. Revenue for NVIDIA's 2024 fiscal year was up 126 percent to US$60.9 billion.The company has become the poster child for artificial intelligence (AI), and has surpassed analysts’ estimates quarter after quarter. NVIDIA's Q3 metrics reveal revenue of US$18.12 billion, 34 percent higher than the amount seen in Q2 and up 206 percent year-on-year. Non-GAAP earnings per diluted share of US$4.02 were up 49 percent quarter-on-quarter and nearly six times year-on-year. Growth was again driven by NVIDIA's data center business.At the time of its Q3 release, NVIDIA was expecting Q4 revenue of US$20 billion, plus or minus 2 percent. Ahead of Wednesday's release, analysts were calling for the company's revenue to more than triple compared to a year ago. NVIDIA's share price tripled in value in 2023 and has already gained more than 50 percent in 2024, driven by growing demand for the company’s AI-focused products and services. The firm blazed a trail in the AI industry last year following the emergence of AI-powered chatbots like ChatGPT. Leading the pack of tech giants dubbed the "Magnificent Seven," NVIDIA overtook Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) last week to become the world’s third most valuable company. Together, Big Tech has propelled the S&P 500 (INDEXSP:.INX) to new heights, with the index surpassing the 5,000 level on February 8. NVIDIA reportedly accounts for a third of those gains on its own. The strong performance of NVIDIA's share price reflects the broader optimism surrounding the tech industry, as well as the continued growth of AI and other cutting-edge technologies. In the days leading up to the company's Q4 results, investors added nearly US$200 billion in market value in options positions, implying a 10.6 percent move in either direction; analysts at Goldman Sachs (NYSE:GS) referred to NVIDIA as “the most important stock on planet Earth." NVIDIA has also received attention for its strategic expansion into the custom chip market. Reporting on the news on February 9, Reuters said that by entering this market, NVIDIA aims to maintain its competitive edge in the booming AI sector. While NVIDIA's general-purpose H100 and A100 chips have been its driving force, the market for custom AI chips has been dominated by competitors like Broadcom (NASDAQ:AVGO), Marvell (NASDAQ:MRVL) and AMD (NASDAQ:AMD). These companies are the go-to providers for cloud giants Microsoft (NASDAQ:MSFT), Alphabet and Meta (NASDAQ:META), which have been working on developing their own chips. However, NVIDIA's expertise in AI combined with its expansion strategy could disrupt these plans. By offering custom chips at competitive prices or with superior performance, NVIDIA could make it harder for other companies to justify the cost and effort of developing custom chips.Along with AI, NVIDIA is reportedly in talks with Swedish networking and telecommunications company Ericsson to develop a wireless chip for telecom infrastructure. Custom chips for the automotive and gaming industries are also part of the company's pipeline, according to sources referenced by Reuters. Despite its recent success, NVIDIA's performance was volatile leading up to its Q4 results. After closing at US$726.13 on February 16, NVIDIA declined slightly, opening at US$719.05 on Tuesday (February 20). By day’s end, it had fallen 3.4 percent. Although NVIDIA beat out Tesla (NASDAQ:TSLA) as Wall Street’s most-traded stock on Tuesday, it dropped 2 percent that day and a further 2.3 percent in after-hours trading. The downward trend continued on Wednesday, with the stock opening at US$678.41 and declining throughout the day before rebounding to close at US$674.72, down 0.54 percent. It picked up during after-hours trading, rising as high as US$743.98 as of 5:30 p.m. EST. This volatility could have been influenced by fears of a potential technology bubble resembling the dot-com burst in 2000, a "sell-the-news" mindset and export bans to China stimulating growth in local chip-manufacturing companies. On the whole, NVIDIA's strong performance is symbolic of the growing importance of AI in today's technology landscape, and the company expects growth to continue in the first quarter of its 2025 fiscal year. In a statement shared on Wednesday, NVIDIA CEO Jensen Huang said, “NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators. The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward."Don't forget to follow us @INN_Technology for real-time news updates!Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
The behavioral component or human synthesis with AI and the manner in which it is deployed internally, beyond mere corporate logistics, seems to be a puzzle piece that is consistently missing.
For investors, it is clear that AI and machine learning technologies have matured past the point of novelty and have begun to show real value in automating and scaling operations for companies in every industry.
Climate change has contributed to the intensification of extreme weather events, leading to more frequent and severe damage to properties and infrastructure.
For decades, even the most advanced enterprises have struggled to forecast and manage revenue growth. The uncertainty of sales performance has plagued management, created risk for investors and shareholders, and for employees.
Artificial intelligence (AI) is the simulation of intelligence in manmade software. In computer science, AI is the study, development and application of machines able to learn and make decisions similar to how humans do. Since 2023, the progression of AI — and the exciting concept of generative AI — has sparked renewed interest in the field, and many investors are wondering if it's a good idea to jump into the sector. There's a lot to understand about this fascinating subject, and the Investing News Network is here to help answer all your questions about the AI industry, including whether now is the right time to invest, how to get exposure and what trends may be seen in the future. Read on to learn more about this developing market.
What is the history of AI?
The term "artificial intelligence" was coined by John McCarthy in 1956 at the Dartmouth Summer Research Project on AI. McCarthy was a computer scientist and is widely regarded as the father of AI. He organized the event, which brought brilliant mathematicians and scientists from around the world together and is considered to be what officially established AI as a field of study. The project's goal was to brainstorm about AI's potential and how to achieve it.The 1960s brought the advent of robots. Unimate, the first industrial robot, had no AI capabilities, but in 1966 the Stanford Research Institute built Shakey. Shakey was the first robot to possess AI. It could observe its surroundings and reason accordingly; for example, it could navigate around obstacles, had the "foresight" to plan out simple tasks and could rearrange a few small objects. The first chatbot was also introduced in 1966; it was a program called Eliza that could simulate a conversation by applying a set of pre-programmed rules to generate appropriate responses to text inputted by users. AI and the broader tech industry continued to evolve in the 20th century, with major milestones including the completion of the first microprocessor in 1970, the commercial sale of the first expert systems in 1980 and the birth of the internet in 1990. In 1997, a sophisticated AI computer system called Deep Blue became the first machine to win a chess match against a human. The dawn of the 21st century came with even more advancements, such as inventions like the Roomba, which navigates using an AI version of spatial awareness called visual simultaneous location and mapping. It also brought the iPhone, which at the time of its debut had a host of AI-powered capabilities, such as the most accurate touchscreen keyboard to date, built-in location services and, eventually, Apple’s (NASDAQ:AAPL) AI-powered virtual assistant Siri.Siri was especially influential, and its success after launching in 2011 inspired further research into computation and language, leading to increasingly sophisticated virtual assistant technology like Alexa and Google Assistant. Sophia, a humanoid robot that looked, spoke and learned from its social interactions like humans do, was created in 2016; when it was granted Saudi Arabian citizenship in 2017, the idea of what AI could accomplish went from fodder for science fiction to a tangible reality.Nowadays, AI can have a hand in everything from making art to drafting emails. Generative AI, technology with the "brainpower" to create something entirely new and original, is improving by leaps and bounds before our very eyes. ChatGPT, a generative AI program capable of creating human-like dialogue, made headlines in January 2023 after becoming the fastest-growing consumer app in history, amassing a million users in just five days. Since then, generative AI technology has continued to gain widespread attention, not only from consumers, but also from governments worldwide and tech giants like Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), which are investing heavily in AI startups that aim to push the boundaries of what AI can do.
What is the forecast for AI stocks?
The excitement around AI's potential has sent investors to AI stocks in droves, but does that mean that now is a good time to invest? If the dot-com bubble burst of 2000 taught us anything, it's that overvaluing revolutionary sectors can have dire consequences. While there’s no doubt the industry carries a lot of potential, the truth is that we don’t fully understand the effects AI will have over the long term — even the experts are merely speculating at this point. Not only that, but as AI becomes more mainstream, the barriers are significantly lower than they were even just a few years ago. The cost of entry is such that companies can jump on the AI bandwagon even if they have little or no expertise on the subject. It's also possible that companies may overstate the impact of AI on their profits. In addition to increased competition, there is a greater risk of obsolescence in AI due to rapid technological innovations.Nevertheless, there are some promising signs that "the fourth industrial revolution" has the potential for long-term economic growth. After all, the handful of internet companies that managed to survive the dot-com crisis went on to become majorly successful. For now, the AI hype seems set to continue — multiple AI exchange-traded funds (ETFs) have enjoyed strong returns, with no immediate signs of slowing down. Shares of tech giant NVIDIA (NASDAQ:NVDA) have seen impressive growth too, skyrocketing just over 200 percent year-on-year as of February 2024. At the same time, some market participants are interpreting Microsoft’s multibillion-dollar investments in AI as a vote of confidence from a leading expert in computer science. In June 2023, the company (along with other tech giants) invested US$1.3 billion in Inflection AI. The California-based startup is seeking to humanize AI personal assistants with a product designed to deliver knowledge based on users' personal needs and interests in a friendly, natural-sounding dialogue.Not only that, but Microsoft, Google and a host of other tech companies have developed their own natural language processing models — a term that describes AI systems that can understand and generate human language — since ChatGPT made its debut.
How to invest in AI now?
Seasoned investors with decent knowledge of AI and its applications might want to invest in individual AI stocks. One of the biggest names is Qualcomm (NASDAQ:QCOM), a partner of Microsoft that designs and builds semiconductors, software and wireless telecommunication products. There's also OpenText (NASDAQ:OTEX,TSX:OTEX), one of Canada’s largest software companies, and Snowflake (NYSE:SNOW), a multi-cloud platform that recently acquired MystAI, a time-series forecasting software that can predict spikes and drops in energy demand, capacity and price.For a list of the nine biggest AI stocks by market cap, click here.There are also investment opportunities in generative AI, arguably the field's most exciting sector, as evidenced by the reception to OpenAI’s ChatGPT platform. While you can’t yet directly invest in OpenAI, you can invest in companies that are pouring money into generative AI research. To date, Microsoft has committed US$13 billion to OpenAI, and both Alphabet and Amazon (NASDAQ:AMZN) are reputable, publicly traded companies that have subsidiary services with generative AI capabilities (Google Gemini and AWS, respectively).If, however, you’re new to investing or AI, an AI ETF might be the simplest way to invest in AI. Some of the most successful AI ETFs are the Global X Robotics and Artificial Intelligence Thematic ETF (NASDAQ:BOTZ), the ARK Autonomous Technology + Robotics ETF (BATS:ARKQ) and the iShares Robotics and Artificial Intelligence ETF (ARCA:IRBO). For a detailed description of each ETF and more AI ETF ideas, click here.
What are the market trends for AI?
AI and generative AI have already taken the world by storm, and the industry only looks set to grow from here. Software that expedites workplace productivity is already easily accessible, and a number of industries are reaping the benefits that AI brings to the table, such as the elimination of boring, monotonous tasks and human error.AI is also proving to be a valuable resource in the healthcare industry, particularly when it comes to drug discovery, diagnosis and research. The market for AI in healthcare is expected to grow at a compound annual growth rate of 47.6 percent between 2023 and 2028, according to research conducted by Markets and Markets.For its part, the global AI market was valued at US$136.6 billion in 2022 and is expected to grow at a compound annual growth rate of 17.3 percent between 2023 and 2030, according to a report by Grand View Research. On a much larger scale, the impact AI could have on our quality of life is unprecedented. It has already made an impact on industries like healthcare, education and manufacturing; however, it also has the potential to completely disrupt the economy by rendering some paid jobs obsolete. AI-powered machines are certain to shape our future; the question is no longer if, but how.
This is an updated version of an article first published by the Investing News Network in 2023. Don't forget to follow us @INN_Technology for real-time news updates!Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
As a former Silicon Valley executive, it’s been exciting to watch the rapid rise of AI technologies — but I’m alarmed at how few young people know how to use them effectively in professional settings.
Ian Hawkins, Head of Nasdaq Trade Surveillance Product Management, and Tony Sio, Nasdaq’s Head of Regulatory Strategy and Innovation, discuss what’s behind the success of the trade surveillance and market surveillance products.
At the forefront of Generative AI-based business decision making, Large Market Models (LMMs) have emerged as groundbreaking GenAI innovations that are actively reshaping business strategies.
Many in healthcare have been cautious about embracing the latest digital innovations and AI takes that concern up a level. AI involves a learning curve and changes how you work – regardless of industry.
Every year, we at eToro write an investor’s almanac full of themes we think could transform the world. And of course, no 2024 trend piece is complete without AI.