What’s Going on With AI Software Stocks

[The Bleeding Edge]( Colin’s Note: The next wave of artificial intelligence (AI) is coming… That’s what Nvidia CEO Jensen Huang said this week ahead of the Computex 2024 tech expo in Taipei, Taiwan. It’s one of the largest technology trade shows in the world… and more than 1,500 companies showcasing their contributions to the future of computer tech. But it was Nvidia’s announcement about what’s coming next that stole the show… and captured our attention as investors. Later this year, Nvidia will roll out its highly anticipated Blackwell GPUs. With AI having hit a standstill… Nvidia has announced that the performance-boosting power push we’ve been waiting for is just months away. And there’s one industry in particular that’s going to benefit… It’s an industry I’ve been hammering the table on… and even identified as the top investment trend of 2024… and now, Nvidia has its eye on it. So, let’s get into it… [Image]( --------------------------------------------------------------- The next wave of AI is coming… You don't have to take my word for it. Jensen Huang, the CEO and founder of Nvidia, said as much this week at Computex 2024. It’s one of the world's largest computer chip conferences. All the leading chip companies – from Nvidia to AMD to Intel – show off their latest bleeding-edge chips coming later this year and in the future. But what Jensen Huang said about what's coming next is the most exciting from an investment standpoint. What industry was he talking about? Who will benefit? And more importantly, how can you make money? I'll try to answer those questions for you today. What is going on investors? Hopefully, you guys are doing well out there. Welcome to The Bleeding Edge newsletter. The state of AI seems to be constantly changing. But, in reality, it's more or less at a standstill. We saw evidence of this last week as software companies reported earnings. And, one after another, they came up short of expectations. Sure, you have models like ChatGPT, Meta's Llama, and several others. They've gotten more sophisticated and a little faster over the past year. But nothing groundbreaking. Much of that is because current-generation GPUs made by Nvidia have maxed out from a performance perspective. But that's all about to change. Later this year, Nvidia will roll out its highly anticipated Blackwell GPUs. The chip has such a dramatic increase in capabilities that companies like Amazon have paused orders of Nvidia's current designs. During his Computex keynote, Jensen Huang showed a chart that illustrates just how much of a performance increase the new Blackwell chips are set to deliver. Measuring performance in TFLOPS, Blackwell is a five times increase over the previous generation. [FLOPS stands for floating point operations per second. They measure a computer’s ability to perform complex mathematical tasks. One TFLOP – or teraflop – represents one trillion calculations every second.] This performance level increase will surely raise the bar once again on large language models like OpenAI's ChatGPT and Google's Gemini – what they can create and do. But that's not what Jensen Huang said is coming next. And as investors, that's not all that exciting anyways. That's because mega tech-giant companies like Google, Microsoft, and Meta will likely maintain a leadership position in enterprise software, social media, and search engines no matter how great Nvidia chips are in the future. But there is an industry that is ripe for innovation, one where many companies in the industry stand to benefit… And that's where Jensen Huang and Nvidia have shifted their focus. But look, it's not just the great minds over at Nvidia. In fact, if you followed our Bleeding Edge newsletter, you would know that I have been very bullish on this sector as well. In fact, back in January at the Consumer Electronics Show in Las Vegas, Nevada, I identified it as the biggest investment trend of the next couple of years. That, of course, is robotics. With the dramatic increase in performance, Nvidia Blackwell chips will bring data centers in just a couple of months. Expect a tidal wave of advancements coming very soon. Large companies with an obvious inside track are Amazon, Walmart, and I believe Tesla, as well. During Nvidia's keynote, Jensen Huang specifically called out Siemens, manufacturer Foxconn, transport company ArcBest, Teradyne, and numerous other smaller startups as well. The aspect of robotics that’s more exciting than the current AI investments is software and hardware companies aren’t the only ones set to benefit. Everything from fast food restaurants to trucking companies stand to benefit. That's really exciting. And if Jensen Huang is correct, this is what's coming next. I'll be sure to keep you updated as this exciting trend is just now starting to take off. And as Blackwell releases later this year, we should see rapid advancement in this industry. That was The Bleeding Edge for today. I'll be back later this week. I'll see you then. [Brownstone Research]( Brownstone Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.brownstoneresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Brownstone Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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