There may still exist an undiscovered gem in the AI market.
The AI-linked tech stocks are witnessing a significant upswing, C3.ai (NYSE: AI), a prominent player in AI, saw its shares soar by a remarkable 16.7%. In parallel, Qualcomm (NASDAQ: QCOM), self-styled as the “on-device AI pioneer,” experienced a 3.7% hike, and Nvidia (NASDAQ: NVDA), now the first semiconductor firm with a $1 trillion valuation, registered a 5.5% increase.
Most of today’s advancements could be attributed to the bullish sales forecast provided by Nvidia in its 2024 fiscal first-quarter earnings report last week. Nvidia posted a 28% rise in Q1 earnings, surpassing estimates by 16%, and predicted a 64% surge in second-quarter sales, hinting at further potential for earnings growth.
Furthermore, Nvidia has striven to maintain this upward trend over the weekend. The semiconductor behemoth unveiled a series of press releases following its earnings announcement: On Saturday, Nvidia, initially a creator of graphics processing units for games, introduced “a bespoke AI model foundry service” to enhance non-player characters’ performance in games via AI algorithms and confirmed the full-scale production of its GH200 Grace Hopper Superchip.
Nvidia revealed its plan to link 256 of these Grace Hopper Superchips to build “a new breed of large-memory AI supercomputer,” named the NVIDIA DGX supercomputer. To conclude the weekend, Nvidia launched an upgraded networking platform to bolster the performance of Ethernet-based AI clouds.
Investors may still be deciphering the impact of Nvidia’s innovative technologies on its bottom line. With the pace of advancements, they may also be hesitant to wait for outcomes, leading them to buy AI stocks now and evaluate them later.
In the meantime, other tech entities need help to remain significant in a scenario dominated by Nvidia. C3.ai announced that Amazon would employ C3’s Generative AI technology on the Amazon Web Services marketplace. Qualcomm also received a favourable mention from Bloomberg, which covered Qualcomm’s shipment of “2 billion AI-capable products” this morning – a strategic move to integrate AI into mobile devices, contrasting with Nvidia’s focus on conducting most AI operations in server farms and on the cloud.
Will Qualcomm manage to shift the narrative around AI? Time will provide the answer.
Investors suggest that with the current focus on Nvidia (valued at 218 times earnings) and C3’s acquisition of the highly-desirable “AI” ticker symbol (despite the lack of profits), Qualcomm stock, at 11.6 times earnings, appears to be a more secure wager.
The AI sector continues to evolve acceleratedly, as evidenced by the thriving stocks of Nvidia, C3.ai, and Qualcomm. These companies are pushing the boundaries of technology, but the question of who will emerge as the definitive leader remains open. While the jury’s still out on which firm offers the most lucrative opportunity for investors, the undeniable progress in the AI industry ensures an exciting and prosperous future.
