Shares in US tech giant Nvidia soared more than 14% in Thursday’s pre-market trade after the firm posted mammoth earnings that surpassed Wall Street forecasts,.
This, again, out-of-the-park performance underscores why I believe the buzz surrounding AI (artificial intelligence) is genuine, and why most investors should now consider including it in their portfolios.
Nvidia reported revenue of $22.10 billion for its fiscal Q4, a 265% year-on-year rise, whilst net income skyrocketed 769% on the AI-related excitement.
So why should investors include AI as part of their investment mix?
Artificial intelligence is poised to revolutionise entire sectors and drive innovation, highlighting the importance for investors to take note. It’s my view that nearly all investors who are aiming to future-proof their portfolios should include AI-focused stocks.
Despite the prevalent buzz surrounding AI, we are merely scratching the surface of its potential. As such, investors should seize the opportunity now to gain an early advantage.
Indeed, the transformative power of AI, combined with its capacity for cross-industry disruption, data-driven approaches, and swift innovation, presents a compelling investment prospect.
Subsequently, as the AI market grows and develops, investors who grasp its potential stand to benefit significantly from this dynamic technological shift.
The scalability of AI applications ensures extensive market penetration, spanning across industries and providing varied revenue channels.
Moreover, the continual enhancement of AI algorithms and machine learning models leads to ongoing advancements in product offerings, solidifying the competitive edge of firms in this sector.
The global shift towards digitalisation and automation also highlights the pivotal role of AI in fostering business expansion.
By incorporating AI-focused stocks into an investment portfolio, it not only reflects the current technological trends but also serves as a safeguard against the possibility of missing out on significant returns.
With AI reshaping the business environment, investing in these forward-thinking companies, such as the so-called Magnificent Seven (Nvidia, Meta, Microsoft, Apple, Alphabet, Amazon and Tesla) enables investors to seize the emerging opportunities, thus representing a strategic decision for nearly every investor aiming to secure long-term wealth.
Indeed, it was thanks to the performance of the Magnificent Seven that led to a bumper year for the S&P 500, which ended 2023 with a gain of over 24.2%.
Following this latest earnings report by Nvidia, the tech titan shows no signs of slowing down. The company has forecast its current quarter revenue to reach $24 billion, far surpassing estimates.
To my mind, the underlying strength of these tech giants, coupled with their ability to navigate challenges and seize opportunities, signals the future is certainly bright for the Magnificent Seven.
As such, I believe that incorporating AI exposure into investment portfolios isn’t merely following a trend; it’s a strategic decision that aligns with the trajectory of innovation and economic growth.
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