For Immediate Release
Chicago, IL – October 4, 2024 – Today, Zacks Investment Ideas feature highlights Nvidia NVDA, Taiwan Semiconductor TSM and Accenture ACN.
AI News: Blackwell Demand, OpenAI Raise
Will the AI Sugar High Wear Off?
Since OpenAI’s ChatGPT chatbot became the fastest-growing consumer app in history, big tech companies have been spending money furiously in hopes of profiting from the coming artificial intelligence (AI) revolution or at least avoiding being disrupted by it.
“I am telling you, the world’s first trillionaires are going to come from somebody who masters AI and all its derivatives and applies it in ways we never thought of.” ~ Mark Cuban
Despite Wall Street’s concerns of an AI bubble or an overhyped innovation, several of the world’s brightest tech minds, and those who participated in the last meteoric technological revolution have weighed in. Everyone whose anyone in tech, from Peter Thiel to Bill Gates to Elon Musk has weighed in on AI and believes the hype is real.
Mag 7 AI Spending Explodes
“Magnificent Seven” stocks have trounced the broader market regarding earnings growth and stock prices. The success of America’s big tech juggernauts has led to massive cash hoards.
Nevertheless, big tech CEOs are not resting on their laurels regarding the next big revolution. In fact, the largest tech firms spent an eye-popping $100 billion on AI during the first six months of 2024 alone (up nearly 50% vs. 2023). However, with little in the way of revenue to show for the spending, many analysts on Wall Street are wondering if the expenditure will slow down, leading to an AI stock correction.
Jensen Huang Blackwell Update
To answer those concerns, no better AI proxy exists than Nvidia, the undisputed AI leader. In a television interview Thursday, CEO Jensen Huang quelled concerns. Huang updated investors on Blackwell, Nvidia’s most sophisticated and next generation chip, saying that demand for it is “insane.” He also divulged that Blackwell is in “full production” after a brief delay attributed to Nvidia supplier Taiwan Semiconductor.
Accenture, Nvidia Ink Landmark Partnership
Huang’s primary reason for making the TV appearance was to tout the company’s deal with consulting giant Accenture. Accenture will leverage Nvidia’s AI suite to scale its AI applications, spur innovation, drive efficiency, and cut costs.
OpenAI Valuation Swells to $150 Billion
In other news, OpenAI officially changed its business structure from a non-profit to a for profit entity last week. This week, OpenAI announced a successful fresh round of funding that values the start-up at $150 billion. Cathie Wood’s Ark is one notable investor who reportedly participated in the round.
Ark, best known for investing in disruptors, invested $250 million in OpenAI. A recent chart shared by Ark Invest shows that large language models like ChatGPT, Claude, Perplexity, and Bing are potentially eating into Google’s dominant search engine share.
Bottom Line
Many Wall Street analysts are concerned that the AI spending sugar high will wear off. However, Nvidia’s “insane demand” and OpenAI’s massive valuation suggest that the bull market in AI spend is unlikely to subside soon.
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Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
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Free: See Our Top Stock And 4 Runners UpAccenture PLC (ACN) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
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