Nvidia, despite reaching a new record high, continues to be considered inexpensive due to the rapid pace of its earnings growth. Eric Jackson from EMJ Capital believes that there is no artificial intelligence bubble in sight and that Nvidia’s massive quarters are likely to continue. With earnings per share increasing nearly 600% in the latest fiscal year, Nvidia’s forward price to earnings ratio is at 39, which is below its five-year average of 40 according to FactSet. The market value of Nvidia has surged around 145% this year, approaching $3 trillion.
Bank of America has expressed optimism in Nvidia’s future, stating that the company’s head start in artificial intelligence chipmaking could potentially boost its shares by another 30%. The impressive results from HPE and Dell have highlighted Nvidia’s dominance in the market, with a significant share of profits and gross margins. Jackson has advised investors not to underestimate the success of Nvidia, as the company continues to lead in the AI space.
While Nvidia remains a top pick for Jackson in the AI sector, Dell has also caught his attention as a potential investment opportunity. Despite a recent pullback in Dell’s shares, Jackson sees potential in the company’s AI server storage capabilities, positioning them as a major beneficiary of AI technology. Despite a recent decline in margins and missed expectations in its AI server backlog, Dell’s incremental AI server revenues of $1.7 billion from the previous quarter indicate a positive outlook for the company moving forward.
The increasing importance of AI technology in various industries has created numerous investment opportunities for companies like Nvidia and Dell. As businesses continue to rely on AI for data processing and analysis, companies specializing in AI chipmaking and server storage are poised for significant growth. Investors looking to capitalize on these advancements in technology should consider companies like Nvidia and Dell, which have demonstrated strong performance and potential for future growth in the AI sector.
The AI sector presents exciting investment opportunities for those willing to take advantage of the rapid advancements in technology. Companies like Nvidia and Dell have proven their capabilities in the AI space and continue to show strong growth potential. As the demand for AI technologies continues to rise across industries, investors should keep an eye on companies like Nvidia and Dell for potential investment opportunities in the AI sector.