Key Points Nvidia has better foresight into impending AI spending than most investors. Nvidia may receive positive news regarding exports to China soon. The stock isn't as expensive as you may think. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) has been one of the best artificial intelligence (AI) stocks to own since the AI arms race kicked off in 2023. Its technology has powered most of the AI we experience today, and that's unlikely to change much in the future. However, many in ...

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Core Viewpoint - Nvidia Corporation's CEO Jensen Huang is perceived as a central figure in the ongoing "AI bubble," highlighting the company's significant role in the AI sector and the broader market narrative surrounding it [1] Group 1: Investment Strategies - Michael Fitzsimmons, a retired electronics engineer, recommends constructing a well-diversified portfolio anchored by a high-quality low-cost S&P 500 fund [1] - For investors willing to accept short-term risks, an overweight position in the technology sector is advised, as it is believed to be in the early stages of a long-term secular bull market [1] - Fitzsimmons suggests considering large oil and gas companies for strong dividend income and growth, reflecting his background in the industry [1] Group 2: Portfolio Management Approach - Fitzsimmons advocates for a top-down capital allocation strategy tailored to individual investor circumstances, including age, employment status, risk tolerance, income, net worth, and investment goals [1] - Suggested investment categories include S&P 500, technology, dividend income, sector ETFs, growth, speculative growth, gold, and cash [1]

Core Viewpoint - The article discusses the prevalent concerns regarding a potential "AI bubble" as major technology companies approach their earnings reports, indicating a high performance expectation [1] Group 1 - The term "AI bubble" reflects the anxiety surrounding inflated valuations and expectations in the artificial intelligence sector [1] - Major technology companies are facing a significant challenge as they prepare for earnings announcements, which are expected to meet high standards [1]

Company Insights - Amazon announced layoffs of 14,000 employees, which, while significant, represent a small fraction of its total workforce of approximately 1.6 million [4][5] - The layoffs at Amazon have raised concerns about potential ripple effects across the white-collar job market, with fears that similar layoffs could occur at other companies [5][6] - The current job market is experiencing a "Great Freeze," where companies are hesitant to hire or fire, which could lead to cracks in the job market if layoffs continue without replacements [7] Industry Trends - The tech industry is seeing increased scrutiny regarding job losses attributed to artificial intelligence, with some experts suggesting that overhiring during the pandemic may be a more significant factor [8][9] - Nvidia reached a milestone as the first company to achieve a $5 trillion market capitalization, driven by substantial investments in data centers [15] - Major tech companies, including Google, Meta, and Microsoft, are ramping up spending on AI infrastructure, indicating a strong commitment to AI despite concerns about a potential bubble [17] Market Overview - Amazon's stock performance has lagged behind its peers, with a 43% increase over the past five years compared to Nvidia's 1,521% gain [13] - The Federal Reserve cut interest rates for the second time this year, which may provide relief to borrowers, although future cuts remain uncertain [14] - November is historically a strong month for the stock market, with positive expectations for this year as well [14]

Core Insights - The article discusses the deflation of the AI bubble and identifies technology stocks that are positioned to survive and thrive in the changing market landscape [1] Group 1: AI Bubble Dynamics - The AI bubble is experiencing a deflation, indicating a shift in market sentiment towards technology stocks [1] - Companies that have strong fundamentals and innovative capabilities are likely to withstand the downturn in the AI sector [1] Group 2: Investment Strategies - A playbook for managing investments during the AI bubble deflation is provided, emphasizing the importance of selecting resilient tech stocks [1] - The article suggests focusing on companies with sustainable business models and growth potential, rather than speculative investments [1]

Core Insights - Meta is forecasting "notably larger" capital expenses for the next year due to significant investments in AI, alongside a nearly $16 billion one-time charge that negatively impacted its third-quarter profit [1][8] - The company's third-quarter revenue grew by 26%, but this was overshadowed by a 33% increase in costs, which pressured profit margins [2] - Meta's capital expenditure is now expected to be between $70 billion and $72 billion for the year, up from a previous forecast of $66 billion to $72 billion [4][6] Financial Performance - Excluding the one-time charge, Meta's third-quarter net income would have been between $15.93 billion and $18.64 billion, compared to the reported net income of $2.71 billion [1][8] - The increase in costs is largely attributed to employee compensation, particularly for AI talent, which is expected to be the second-largest contributor to rising expenses [4][9] AI Investments - Meta has committed to substantial investments in AI, aiming for superintelligence, which involves building massive AI data centers [2][11] - The company has reorganized its AI efforts under the Superintelligence Labs unit to enhance decision-making and streamline operations [8][9] - Major tech companies, including Meta, are projected to spend a total of $400 billion on AI infrastructure this year, raising concerns about an AI bubble [10] Advertising and Market Position - Meta continues to leverage its extensive user base to drive ad revenue, utilizing an AI-optimized ad platform to enhance marketing effectiveness [5] - The company has expanded its advertising efforts on platforms like WhatsApp and Threads, competing directly with rivals such as X and TikTok [7]

Core Insights - Meta Platforms Inc. recorded a nearly $16 billion one-time charge in Q3, significantly impacting its earnings, with reported net income at $2.71 billion instead of an adjusted $18.64 billion without the charge [1] - Following the announcement, Meta's shares fell approximately 6% in after-hours trading [1] Capital Expenditure - Meta raised its full-year capital expenditure forecast to $70–72 billion from a previous range of $66–72 billion, with expectations for notably larger spending in 2026 [2] - The company plans to invest aggressively in infrastructure to meet expanding compute needs, both through building its own facilities and contracting with third-party cloud providers [2] Rising Costs - Employee compensation costs, particularly for AI hires, are expected to be the second-largest contributor to rising expenses [3] - Despite recent job cuts of around 600 in the AI division to streamline operations, Meta's investments in AI infrastructure are increasing, leading to short-term cost pressures [5][6] AI Initiatives - Meta is focused on artificial intelligence, aiming for superintelligence, and has reorganized its AI initiatives under a new unit called Superintelligence Labs [4] - The company has committed to spending hundreds of billions to develop advanced AI infrastructure, including a recent $27 billion financing deal for a data center project in Louisiana [5] Advertising Strategy - Meta leverages its 3.2 billion daily active users to enhance ad revenue through an AI-optimized ad platform that automates campaign delivery and improves ad quality [7] - The company has expanded its advertising reach to platforms like WhatsApp and Threads, competing with other social media giants [7] Industry Trends - Meta's significant investment in AI reflects a broader trend in the tech industry, with major firms expected to spend $400 billion on AI infrastructure by 2025 [8] - However, the aggressive spending amid economic uncertainty raises concerns about a potential AI bubble and scrutiny over executive decisions [9]

Market Trends & Performance - International stocks and ETFs are outperforming the US stock market [1][2] - The MSCI All Country World ex USA Index is up approximately 30% year-to-date, marking its widest outperformance against broad US indexes in 16 years [3] - US dollar weakness, declining about 9% this year, boosts returns of foreign indexes in dollar terms [3] - International stocks are attractively valued after 10-15 years of underperformance versus US stocks [3] ETF Analysis & Diversification - Diversification and better valuation are reasons to consider international stock ETFs [5] - VXUS, a Vanguard ETF, holds 8,700 developed and emerging market stocks excluding the US, with a 005% expense ratio and $111 billion in assets [6] - IVLU, an iShares ETF, focuses on value characteristics, holding 343 large and mid-cap developed excluding US stocks, with a 030% expense ratio and $8 billion in assets [9] - Gwell, a Cambria ETF, is actively managed, focusing on the cheapest countries in the world with a concentrated portfolio of 113 stocks, a 066% expense ratio and $353 million in assets [10][11] Sector & Country Allocation - International stock ETFs offer more diversification to sectors beyond technology, such as financials and industrials [8] - Top countries in VXUS include Japan, China, UK, Canada, and Taiwan [9] - Japan receives approximately 30% weight in IVLU [9] Comparative Performance - Gwell is up about 47% year-to-date, IVLU is up about 37%, and VXUS is up about 30%, compared to the S&P 500 index which is up about 17% year-to-date [13]

Core Insights - Nvidia has officially become the first company to reach a $5 trillion market cap, driven by strong market performance and optimism surrounding its AI-related products and partnerships [5][33] - The company's shares rose by 5.4% following CEO Jensen Huang's remarks at the GTC conference, highlighting the importance of AI in data center expansion [2][3] - Analysts expect Nvidia's data center revenue for the next year to exceed previous estimates, indicating strong demand for its products [3][11] Company Performance - Nvidia's stock rally is part of a broader trend in the semiconductor industry, with other companies like Broadcom, TSM, and AMD also experiencing gains [4][33] - The company's partnerships with various firms, including Uber and Lucid, are expanding its ecosystem and potential for growth [14][40] - Nvidia's market cap now accounts for 8% of the S&P 500, a level not seen since the 1970s, reflecting its significant influence in the tech sector [33] Market Dynamics - There are ongoing discussions about the potential for Nvidia's Blackwell chip sales to China, which could provide additional upside for the company [8][41] - The overall sentiment in the market suggests that demand for AI infrastructure will continue to grow, with hyperscalers expected to maintain or increase their capital expenditures [11][12] - The competitive landscape for Nvidia remains strong, with concerns about other companies like Qualcomm attempting to challenge its dominance [36] Future Outlook - Analysts believe that Nvidia's growth trajectory is likely to continue, with expectations for increased spending from major tech companies like Google and Amazon [12][13] - The partnerships and collaborations Nvidia is forming may enhance its long-term growth prospects, although the immediate impact on cash flows remains uncertain [17][18] - The upcoming IPO of OpenAI is anticipated to create significant market interest, potentially affecting Nvidia and the broader AI sector [25][26]