One Reason AI Has Hit a Wall Now

There's plenty of opportunity elsewhere… Published By Money & Markets, LLC. July 18, 2024 Published By Money & Markets, LLC. July 18, 2024 [Turn Your Images On] [Turn Your Images On] From The Desk of [Matt Clark, CMSA®]( Chief Research Analyst, [Money & Markets Daily]( One Reason AI Has Hit a Wall Now Money & Markets Daily, There is no doubt that artificial intelligence (AI) has become a generational investment opportunity. Just look at some of the year-to-date gains of some of the biggest AI-related stocks trading on the Nasdaq exchange: - Nvidia Corp. (NVDA) — 145%. - Alphabet Inc. (GOOGL) — 31%. - Meta Platforms (META) — 33%. - Advanced Micro Devices (AMD) — 15%. Compared to the YTD return of the S&P 500 (+18%) — those gains are even more impressive. The reason for this boom in AI-related stocks is simple. Since the release of OpenAI’s ChatGPT AI model to the general public in 2022, hundreds (if not thousands) of companies have been looking for an edge in this innovative and lucrative space. And that's created massive opportunity as the market expands: [Turn Your Images On] In 2022, the global AI market was valued at $124.8 billion. By 2030, the market is expected to reach $826.7 billion — a 562% expansion in less than a decade! AI is creating a once-in-a-generation investment opportunity. So much so that the Blackrock Investment Institute said transformation related to AI is equivalent to the industrial revolution. While the long-term potential of AI-related stocks is strong, there are some dents in the armor for the short term. --------------------------------------------------------------- [Turn Your Images On]( [Tuesday, July 23 at 1 p.m. ET: The Secret To Unlocking The Biggest Stock Market Gains]( Thanks to one hidden anomaly, you now have a chance to target stocks with the biggest profit potential and multiply your wealth, month after month. It has nothing to do with crypto, options, penny stocks or any kind of speculative bets. On Tuesday, July 23, at 1 p.m. ET, Adam O’Dell is revealing all the details of this revolutionary breakthrough. Don’t miss it – [click here to save your seat.]( Click the link above to automatically register for The Wealth Multiplier Summit. By reserving your spot, you will receive event updates and offers. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy](. --------------------------------------------------------------- AI Stocks Have a Valuation Problem The growing optimism in AI stocks presents a fundamental issue. Faster-than-average growth in revenue is pushing valuation metrics, like price to earnings, to sky-high levels. Just look at AI stalwart Nvidia Corp.: [Turn Your Images On] On May 22, 2024, NVDA was trading at its lowest P/E ratio of 2024 (55.6). This week, that ratio jumped 35% to 75. For reference, that’s twice the average of the semiconductor manufacturing industry (37). A similar AI-related stock, Advanced Micro Devices Inc. (AMD), is currently trading with a P/E ratio of 263 — 3.5X that of NVDA and 7X the industry average. This means AMD's price is high relative to its earnings and suggests the stock is way overvalued — investors have to pay more to invest in the stock. Now, the saving grace here is that P/E ratios and stock prices have not elevated to the level of the dot-com bubble that burst in 2000: AI Stocks Not as Frothy as Dot-Com Stocks [Turn Your Images On] The chart from J.P. Morgan above compares the Nasdaq 100 Index during the dot-com bubble (blue line) and presently (orange line). It also adds to the performance of AI leaders such as NVDA, GOOGL, AMZN, META and MSFT. From 1995 to 2000, the Nasdaq 100 gained more than 1,000%. The current performance of both the index and AI leaders is nowhere close to that. AI stocks may be a bit frothy now, but this is certainly not 2000. --------------------------------------------------------------- [Turn Your Images On]( [A Tiny $10 Company With a BIG Secret]( Four of the richest men in the world have scrambled to invest in this breakthrough technology before it goes mainstream … and one tiny $10 stock is set to dominate it. [Click for details.]( --------------------------------------------------------------- AI Isn't the Only Game in Town It’s easy to get caught up in the hype surrounding AI. To be clear, this is a transformative investing opportunity in the long term. But, for all its potential, the tech surrounding AI is still very much in its "pregame" phase. I don’t think we have even scratched the surface in terms of AI-related hardware and software. The high valuations of these stocks are likely to force some pause in the sector. I mention this now in part because our chief investment strategist, Adam O’Dell, is rolling out his [Wealth Multiplier Summit]( next week. As part of that summit, he’s put together a special report of AI stocks to avoid now. [Add your name to the guest list now]( and sign up for our text alerts … within moments, you'll receive that special report as a bonus for signing up early. (You can opt out of these alerts at any time.) Then, mark your calendar for Tuesday, July 23, at 1 p.m. ET... That's when Adam will provide details on his new portfolio — which leverages the Green Zone Power Ratings system in a way never done before and has the power to produce a 157,000% return in less than 25 years. [Click here to make sure you don’t miss his Wealth Multiplier Summit now.]( Until next time… Safe trading, [Matt Clark, CMSA®]( Chief Research Analyst, [Money & Markets Daily]( Click any of the links above to automatically register for The Wealth Multiplier Summit. By reserving your spot, you will receive event updates and offers. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy](. --------------------------------------------------------------- Check Out More From Money & Markets Daily: - [CAN THIS STOCK'S 1,300% GAIN CONTINUE?]( - [THE MATH GENIUS WHO “SOLVED” THE MARKET FOR $31 BILLION IN PROFITS]( - [EXPECT A “SURPRISE” FED TURNAROUND FOR SUMMER ’24…]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. 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The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Money & Markets permits editors of a publication to recommend a security to subscribers that they own themselves. However, in no circumstance may an editor sell a security before our subscribers have a fair opportunity to exit. Any exit after a buy recommendation is made and prior to issuing a sell notification is forbidden. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. (c) 2024 Money & Markets, LLC. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Money & Markets. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 800-684-8471) Remove your email from this list: [Click here to Unsubscribe](