The Power Gauge Reveals the Split Reality on AI

Editor's note: Earlier this week in Empire Financial Daily, we shared insights from Marc Chaikin, the founder of our corporate affiliate Chaikin Analytics. Today, we're turning to his colleague Marc Gerstein – Chaikin Analytics' director of research – for what Chaikin Analytics' Power Gauge system thinks about a popular tech stock you may already own... […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] Editor's note: Earlier this week in Empire Financial Daily, we shared insights from Marc Chaikin, the founder of our corporate affiliate Chaikin Analytics. Today, we're turning to his colleague Marc Gerstein – Chaikin Analytics' director of research – for what Chaikin Analytics' Power Gauge system thinks about a popular tech stock you may already own... --------------------------------------------------------------- The Power Gauge Reveals the Split Reality on AI By Marc Gerstein --------------------------------------------------------------- ['My first time selling put options on camera']( A 37-year-old man has agreed to try our No. 1 trading strategy. It's a way of collecting hundreds or thousands of dollars instantly, without buying a single stock upfront. Win or lose, we'll show you the full trade recorded LIVE. Including how it works, and how some folks are seeing massive gains with this strategy right now. [Click here to watch](. --------------------------------------------------------------- I needed 0.4 seconds to find out why Nvidia (NVDA) is once again in the spotlight... That's how long my online search took. And all the results focused on the same topic. This opening sentence from the Barron's article sums it up perfectly... Nvidia is betting big on the buzziest new technology trend: generative AI. In short, the leading graphics-card designer is working on the "next big thing" in artificial intelligence ("AI"). And it revealed the latest details at its developers conference last month... Nvidia's AI Foundations is a set of cloud services that enable users to customize across uses like text, visuals, and even biology. The company's semiconductors make it all possible. Some of the world's biggest tech companies are putting big money into generative AI... Microsoft (MSFT) has invested more than $11 billion into OpenAI's industry-leading ChatGPT tool. It wants to bring AI to its Bing search engine to close the gap with Alphabet (GOOGL) in that area. And Alphabet just launched an experimental version of its own AI called Bard. It's way too early to judge how these AI innovations will transform the tech space. But for better or worse, investors want in on AI – and they want in now. That raises the usual question... Even if the AI trend explodes, how likely is it to reward folks who buy Nvidia's stock? As always, to answer that question, we can turn to the Power Gauge... --------------------------------------------------------------- Recommended Link: [Billionaire's 'Secret Currency' Uncovered]( One of the richest men in the world has been quietly profiting from a "secret currency" over the past few years. It's got nothing to do with gold, gold coins, any sort of crypto, or likely anything you've ever heard about. But it IS all part of a trend Forbes called a "$100 trillion opportunity." And according to Pulitzer-nominated journalist Michael Robinson, while this "secret currency" is flying under the radar for now... It could soon spread like wildfire. Handing anyone who stakes a claim in this "secret currency" today the opportunity of a lifetime. [Click here for all the details](. --------------------------------------------------------------- Generative AI is sparking a tech revolution... It allows users to create new images, text, audio, video, and more. And of course, that's opening up new opportunities for computer artists, poets, music composers, and others. But for investors, it all comes down to results... Nvidia's AI advancements aren't cheap. And at some point, they need to start paying off for the company. If they do, shareholders could reap the rewards. If they don't, shareholders will end up holding an incredibly expensive company. The Power Gauge reveals this clearly... We'll start with valuation. In the Power Gauge, four out of the 20 factors relate to valuation. They are projected price-to-earnings (P/E) ratio, price-to-sales ratio, free cash flow, and price to book value. All four valuation-related factors are "very bearish" for Nvidia right now. That tells us the stock is expensive at its current level. And yet... the Power Gauge is "bullish" overall on Nvidia. Has the Power Gauge thrown valuation out the window and gone all-in on futurism? Not at all... As I said, four of the Power Gauge's factors relate to valuation. But that's only one piece of the puzzle. The system includes 16 other factors. Together, they complete the puzzle for us. Here's the current breakdown from the Power Gauge for Nvidia... Now, it might seem like the Power Gauge is all over the place. The top two categories earn "very bearish" ratings. And the bottom two categories earn "very bullish" ratings. But in reality, this setup makes a lot of sense... You see, the Financials and Earnings categories involve "observable" factors. That data includes things like 10-K filings, earnings reports, and valuation ratios. On the other hand, the Technicals and Experts categories reflect "expectations" for a company. That data involves traders' and experts' predictions, which are more subjective. In Nvidia's case, the positive investment case is moving far away from the "observable" and more toward the "expectations" side. That makes for a riskier-than-usual investment. Simply put... this is the split reality investors are facing today. Nvidia's AI venture comes with incredible promise. But it's also a high cost against the company's core financial metrics. And we don't know whether it will meet expectations. That hasn't stopped Nvidia's stock from soaring. It's up a staggering 84% so far this year. So yes, the Power Gauge is "bullish" overall on Nvidia. And as long as the stock continues its upward trajectory, the company will maintain that rating – even if it's expensive. Regards, Marc Gerstein April 8, 2023 Editor's note: In a special presentation, Marc Chaikin shares how a powerful indicator just triggered that has only appeared a handful of times since 1950... and every time, it has predicted the stock market's next move with a 100% success rate. He also explains why ignoring this signal could spell disaster for your money in 2023... and he shares what he believes you need to do this year to be on the right side of history. [Learn more here](. --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2023 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 1125 N. 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