Yahoo Finance Live’s Akiko Fujita and Sheena Smith discuss the company’s earnings report, other chip stocks, and NVIDIA’s soaring stock amid AI development.
video transcript
Akiko Fujita: Stock talk today, Nvidia. Semiconductor giants soared on Wall Street’s better-than-expected earnings and earnings outlook. At the heart of the optimism is AI. Today, Nvidia is the market leader in chips that power artificial intelligence. you are looking at stocks It is currently up 25%, its best day since November 2016.
And Sina, for those of you who are thinking the same way now, why are you thinking so much about Nvidia? We’re talking about GPUs. These are highly specialized chips, the real building blocks of the latest advances in AI we’ve seen in the last six months. I’ve seen some analysts take an incredibly bullish view on stocks. HSBC and Rosenblatt Securities are the most bullish on $600 per share.
And there’s a lot of what we’re hearing from analysts today that really shows this excitement. Some might argue it’s a little unreasonable, but the Trust has raised its price target to $470 a share, calling the gains “amazing.” Susquehanna says NVIDIA sells pickaxes and shovels, calling it the AI gold rush. And it all contributes to this massive uptick we’re seeing today.
Sheena Smith: That’s certainly the case, and we’re talking about stocks that were already up 100% or more since the beginning of the year, ahead of last night’s earnings. Now let’s talk about the excitement going on in the market. This is not only his Nvidia, which is certainly making significant profits, but many stocks with exposure to AI are also riding this wave and this excitement is heading upwards. AMD and Micron are both exposed to AI. Today they are in the green. When we talk about Google and Microsoft, ChatGPT and exposure to generative AI there, those two stocks are trending higher. And Palantir and Arista Networks are among today’s gainers.
Akiko, you were talking about the analyst comments we’re receiving. A lot of that is based on what we’ve heard from her about NVIDIA’s guidance. And Bank of America today issued a memo noting the importance of that guidance. The company now expects second-quarter sales to reach $11 billion. But Bank of America said in a memo that it hadn’t seen anything like this before in the press, noting that the market cap is now approaching $1 trillion and will continue to do so today and beyond. It’s not far, he says.
Sure, there’s a lot of hype going on here about what we just heard from NVIDIA, but it’s also about what the company might look like in a few years’ time with advances in AI. I’m here.
Akiko Fujita: Yes, and Seana, the excitement around AI can be traced back to last November when we saw this release of ChatGPT. Investors have spent the last few months figuring out how to position their companies against what they see as groundbreaking technology. Here he would like to introduce an interesting research result from NBER. This talks about where AI can benefit. They took particular note of the circumstances in which corporate employees are exposed to AI, and when they calculated that, excess earnings he said increased by 0.4% per day. IBM tops the list and Nvidia is in the top five, but certainly as this hype grows, investors will continue to pursue all sorts of profits from AI.
Sheena Smith: Well, look at the target price. Certainly, we’re very excited about what we heard last night about what could happen here in the future.
