Riding high on AI hype
With a 95% market share in the emerging cutting-edge $10,000 artificial intelligence superchips, $NVIDIA Corp(NVDA)$
Its share price has so far doubled year to date, and I expect the momentum to continue in the near term, as more investors jump onto the AI bandwagon of the likes of $C3.ai, Inc.(AI)$
Hopefully, the company will turn in a promising set of earnings results this week that surpass market expectations in order to support its hefty price-to-earnings ratio, as hopes are running high that Nvidia will be able to maintain its technology leadership and dominance on AI chips.
Nevertheless, with a historical beta close to 2, Nvidia’s stock is twice as volatile as the broad market, and is expected to fall more than the market should a recession materialises. It does not help that Bank of America's CEO, Brian Moynihan, just said he thought the recession would be worse than the consensus and last longer.
Hence, all eyes will be on Nvidia’s coming earnings results and the company’s business outlook amidst challenging macro headwinds.
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