7 Charts on the AI Stock Boom

Plus: Is Apple stock a buy, final thoughts from Charlie Munger, and are small- cap stocks worth owning? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=50199&elqTrackId=54a8f92c315641f294b2d53801dd1ed3&elq=6528fdf3e9714fbeb94e38035cdcfa65&elqaid=50199&elqat=1&elqCampaignId=25112) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week's newsletter: - [Is Nvidia Stock a Buy, a Sell, or Fairly Valued After Earnings?]( - [7 Charts On the AI Stock Boom One Year After ChatGPT’s Launch]( - [Why Investors Should Pay Extra Attention to Shopping Trends This Holiday]( - [Apple: We Advise Waiting for a Pullback Before Investing]( - [Final Thoughts From Charlie Munger on Apple, Warren Buffett, and the Big Costco Error]( - [Why Berkshire Hathaway’s Success Will Continue After Charlie Munger ... and Warren Buffett]( This email isn’t being written by a computer program, but if I wanted to put myself out of a job, it definitely could be. In a year when the stock market has continued to be dominated by macroeconomic concerns like inflation and interest rates, one other story promises to outlast this (or the next) economic cycle: artificial intelligence. (As if to prove this point, I typed “a-r-t,” and the autocomplete software did the rest.) One year ago this past week, OpenAI released ChatGPT to the public. OpenAI’s recent board-room soap opera notwithstanding, ChatGPT unleashed a wave of money into the stocks of companies that people think will benefit from AI. To mark the anniversary, [I took a close look at the key trends]( driving the AI stock boom and highlighted some of the companies that Morningstar analysts think are most likely to play a critical role in this transformative technology. (For three undervalued AI stock plays, [see our previous article here]( and our post-earnings outlook for Nvidia stock, [here]( This past week saw another significant event: the passing of legendary investor Charlie Munger, who was Warren Buffett’s right-hand man for decades. Our coverage includes [excerpts from Munger’s final interview]( in which he talks about Apple, his partner, and Buffett’s decision not to invest in Costco. Meanwhile, Morningstar’s [Greggory Warren looks at why]( we think Berkshire Hathaway will continue to succeed despite Munger’s passing, and even when Buffett isn’t around. And we’ve got a great read with [12 lessons]( any investor can learn from Buffett and Munger. Speaking of Apple, Morningstar analyst William Kerwin has a refreshed read on the outlook for that company’s stock. You [can find out here]( why we’re raising our fair value estimate for Apple and whether we think it’s the right time for investors to dive in. More broadly, it was a quiet week for market news. But the floodgates are about to be unleashed, with the December employment report coming out Friday and the next inflation report and Federal Reserve meeting happening the following week. In the meantime, [Sarah Hansen looks at what investors should watch for]( around consumer spending and the holiday season. Lastly, it’s been a roller-coaster year for small-company stocks, with waves of underperformance and outperformance. Check out [this great video]( with Morningstar Indexes strategist Dan Lefkovitz, who unpacks the performance of small-cap stocks and does some myth-busting around small-cap investing. That’s it for this week! As always, check out our [Markets page]( for our latest coverage and live stock market updates along with our [weekly calendar]( of key upcoming data and events. Did a friend forward this email? [Sign up here](. [One Year After ChatGPT’s Launch: 7 Charts on the AI Stock Boom]( [One Year After ChatGPT’s Launch: 7 Charts on the AI Stock Boom]( These stocks and the key trends behind them are critical for understanding the AI investment landscape. Tom Lauricella, Lauren Solberg [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [Why Investors Should Pay Extra Attention to Shopping Trends This Holiday]( [Why Investors Should Pay Extra Attention to Shopping Trends This Holiday]( Resilient consumers have helped the economy stave off a recession—for now. Sarah Hansen [Best- and Worst-Performing Stocks of November 2023]( [Best- and Worst-Performing Stocks of November 2023]( Coinbase, Block, and Datadog post big rallies, while Agilon Health and Cigna slide. Tom Lauricella [Is Nvidia Stock a Buy, a Sell, or Fairly Valued After Earnings?]( [Is Nvidia Stock a Buy, a Sell, or Fairly Valued After Earnings?]( With the AI boom and a massive rally, here’s what we think of Nvidia stock. Brian Colello [After Earnings, Is Walmart Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Walmart Stock a Buy, a Sell, or Fairly Valued?]( Amid a precarious economic outlook, here’s what we think of Walmart stock. Noah Rohr [After Earnings, Is Home Depot Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Home Depot Stock a Buy, a Sell, or Fairly Valued?]( As the company gains traction with professional builders, here’s what we think of Home Depot’s stock. Jaime Katz [What’s Happening In the Markets This Week]( [What’s Happening In the Markets This Week]( The November jobs report is on deck, along with Nio and Broadcom earnings. Tom Lauricella [3 Gold-Rated Funds Whose Managers Love Healthcare Stocks]( [3 Gold-Rated Funds Whose Managers Love Healthcare Stocks]( Although the sector has suffered recently, it won’t hurt these well-run funds forever. Drew Carter [10 Cheap Dividend-Growth Stocks to Buy]( [10 Cheap Dividend-Growth Stocks to Buy]( The stocks of these companies with a history of raising their dividends look undervalued heading into 2024. Susan Dziubinski [Should You Invest in Stocks, Bonds, or a 5% CD?]( [Should You Invest in Stocks, Bonds, or a 5% CD?]( As cash yields remain attractive, here’s how to think about your asset allocation today. Christine Benz, Susan Dziubinski [Undervalued by 45%, This Wide-Moat Stock Is a Buy This Holiday Season]( [Undervalued by 45%, This Wide-Moat Stock Is a Buy This Holiday Season]( Bargain seekers on a mission for cheap stocks of high-quality companies can stop here. Sean Dunlop [3 Great Funds for Contrarians in 2024]( [3 Great Funds for Contrarians in 2024]( These highly rated funds hail from a part of the market that’s out of favor in 2023. Susan Dziubinski [Are Small-Cap Stocks Worth Investing In?]( [Are Small-Cap Stocks Worth Investing In?]( Given their chronic underperformance, it’s a fair question. Dan Lefkovitz, Susan Dziubinski [The 10 Best Companies to Invest in Now]( [The 10 Best Companies to Invest in Now]( These undervalued stocks of high-quality companies are attractive investments today. Margaret Giles [Final Thoughts From Charlie Munger on Apple, Warren Buffett, and the Big Costco Error]( [Final Thoughts From Charlie Munger on Apple, Warren Buffett, and the Big Costco Error]( Buffett’s partner at Berkshire Hathaway has died. Here are some excerpts from one of his final interviews. James Gruber [Why Berkshire Hathaway’s Success Will Continue After Charlie Munger ... and Warren Buffett]( [Why Berkshire Hathaway’s Success Will Continue After Charlie Munger ... and Warren Buffett]( Munger’s passing is a spiritual loss for the company. Greggory Warren [12 Lessons on Money and More From Warren Buffett and Charlie Munger ]( [12 Lessons on Money and More From Warren Buffett and Charlie Munger]( After Charlie Munger’s passing, words of wisdom from two of the world’s most successful investors. Haywood Kelly Recent Earnings [Apple: We Advise Waiting for a Pullback Before Investing]( [Farfetch: Uncertainty Turns Extreme as Company Fails to Provide Third-Quarter Financials]( [Snowflake: Long-Term Upside Is Far From Melting]( [Salesforce: MuleSoft Shines In Another Overall Good Quarter]( [Instacart: Market Dominance at Risk With Heightened Competition]( [Zscaler: Robust Sales Growth Goes Hand In Hand with Strong Margin Expansion]( Future-Proof Your Strategy With Morningstar Investor Build a portfolio that's durable, no matter what the market throws your way. Subscribe to Morningstar Investor and get unlimited access to our powerful ratings and performance data, unbiased analysis on thousands of stocks, funds, and ETFs, and portfolio management tools that give you a deep understanding of your investments so you know when to make changes to keep your strategy strong. [Start your free trial today](. 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