What I Got Wrong About Nvidia

I got Nvidia wrong… [Jeff Clark's Market Minute]( Jeff’s Note: Today we’re sharing an opportunity from our colleague over at Brownstone Research, Colin Tedards. Colin’s been waiting 20 years for this… An idea [so big it has true fortune-making potential](. You see, while mainstream investors are chasing Nvidia higher, dozens of tiny, undiscovered AI stocks could deliver profits of 1,000% and higher. In short, it’s the next tidal wave of AI profits, set to explode soon… It could be 3X bigger than the launch of Google, Microsoft, and Open AI’s AI projects combined. For all the details, [tune into his “Nvidia Effect” event tomorrow night at 8 p.m. ET right here](. Then, read on for why he’s looking beyond just a few big tech stocks to play the AI boom. --------------------------------------------------------------- What I Got Wrong About Nvidia By Colin Tedards, editor, Bleeding Edge Dear Reader, I got Nvidia wrong… The chipmaker released its second-quarter results on August 23. And I had forecasted that Nvidia would report $11.5 billion in revenue… For context, my estimate was $500 million over Wall Street’s. [Chart]( Nvidia actually made $13.5 billion. That’s 17% higher than what I was expecting. Here are some of the highlights from the earnings call; all figures are year-over-year changes: - Revenue: Up 101% - Gross margin: Up 26.6 pts - Operating income: Up 1,263% - Net income: Up 843% - Earnings per share: Up 854% Expectations were high coming into Nvidia’s earnings announcement… but it still managed to surprise everyone. What surprised me the most wasn’t the demand. I know AI is an undeniable trend and that every major software maker is scrambling to get as many of Nvidia’s H100 GPUs to build and train their AI models. No, what was shocking was how fast suppliers were able to get Nvidia the parts it needed for these chips. Nvidia’s H100 is a complex machine. It weighs 70 pounds, has 35,000 parts, and has nearly 1 trillion transistors. Nvidia relies on a web of suppliers and testing companies to source parts and make sure each unit is running at peak performance. There was some concern that if even one of these suppliers fell short, the entire supply chain could be disrupted. However, these suppliers ramped up their operations to meet Nvidia’s surging demand. Nvidia has a rare opportunity today. Its H100 chips are the best in class. If you’re a tech executive trying to build the next great AI model, Nvidia’s chips are the go-to. But once again, Nvidia is not my favorite way to gain exposure to the AI trend. Nvidia dominated earnings. But with a market capitalization north of $1 trillion, it takes a lot to move the stock. As a company, Nvidia has a bright future. But as an investment, its days of explosive growth potential are over… However, there are plenty of opportunities within the broader AI trend to profit from. And if Nvidia’s rapid sales growth is any indication, the AI opportunity is going to be even bigger than the boldest estimates out today. Recommended Link [Exclusive Invitation-Only Brownstone Research Event What we unearthed on our recent trip to Nvidia headquarters about the AI boom…]( [image]( This could help you capture a tidal wave of profits from the AI boom that is BIGGER than anything you’ve seen so far… Join us tomorrow at 8 p.m. ET for [The Nvidia Effect: How to Supersize Your Profits In The Next Phase of the AI Boom]( [Click here to RSVP.]( -- Hardware, Software, Everywhere When we think back to the adoption of the internet, we see a similar pattern play out. First, it was the hardware providers that benefited. We can think of companies like Cisco with its networking hardware. Then, there were the software developers. I would put a company like Microsoft in this bucket. Microsoft’s Windows operating system made personal computers accessible and user-friendly at precisely the time when the rise of the internet made PCs a “must-have” device. As for “everywhere?” Can we think of any industry that has not been changed in some way by the adoption of the internet? The businesses that resisted the new technology simply faded away. The companies that adopted it became more efficient, more productive, and more profitable. It will be the same pattern with AI. Just remember: Hardware, software, everywhere. Nvidia is the hardware company powering AI today. But it has a vast network of suppliers that also offer triple-digit upside. As for software, Microsoft is once again a market leader… along with others like Meta and Alphabet. But there are also smaller companies like Adobe that are making AI applications for enterprise and personal use. Many others have announced AI services and products that they’ll be rolling out over the next year. AI isn’t everywhere yet. But we’re seeing strong interest. A survey by Accenture showed that 73% of companies polled are prioritizing AI investment over other technologies. JPMorgan Chase is using AI to cut down on fraud. Gucci is using AI to improve its customer service. Johnson & Johnson is using AI to help research compounds for new drug discoveries. These are just the earliest adopters of AI. By 2030, AI will be as commonly used as the internet is today. Nvidia’s production ramp-up means that more GPUs are making it into the hands of developers and software companies. That’s pulling the entire timeline of AI adoption forward. That means as investors we can’t afford to sit on the sidelines and wait. If we don’t invest in AI today, we’re going to miss one of the greatest technology and investment opportunities of our lifetime. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Let the “Nvidia Effect” Make You Rich Nvidia is a great company. It is the undisputed king of AI hardware. But it is not my favorite way to play the AI megatrend. Instead, our strategy is to target the smaller, lesser-known suppliers that make Nvidia’s dominance possible. This opportunity is so massive… and so urgent… I’ve put together a strategy session all about it. It will go live tomorrow night at 8 p.m. ET. I’ll show you the full potential of the Nvidia Effect and how you can profit from it in your portfolio. So, mark that date on your calendar. This will be my first major event this year. And I couldn’t be more excited about the fortune-making potential of this strategy. If you haven’t already, reserve your spot with one click [here](. Regards, Colin Tedards Editor, The Bleeding Edge [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.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](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](