Last night, chipmaking giant Nvidia (NVDA) fired a warning shot to every single investor on the planet. The message? We have officially and irreversibly entered the Age of AI.
Some investors will make fortunes over the next few years during this new technological paradigm shift. Others will lose them.
That’s what Nvidia’s earnings report confirmed last night.
The company absolutely crushed Wall Street revenue and earnings estimates for the first quarter. Revenues beat estimates by a whopping $670 million. Earnings topped estimates by nearly 20%.
But it was the guidance that really turned heads.
Nvidia is guiding for $11 billion in revenues next quarter. Wall Street was looking for just $7 billion. That’s a $4 billion beat on expectations – the biggest beat I’ve ever seen in my career.
And it’s all being driven by AI.
The AI-Powered Bull Market Has Arrived
Management spent the entire conference call talking about how major data center operators like Alphabet (GOOG, GOOGL) and Amazon (AMZN) are racing to build out their AI-driven cloud services. And to do so, they’re ordering a bunch of Nvidia GPUs to power those AI cloud services.
Demand signals for Nvidia have never been stronger.
And by “have never been stronger,” I mean have never been stronger.
Nvidia went public in January 1999. Since then, the company has survived through the dot-com boom and bust, the 2008 financial crisis and recovery, the tech-powered boom of the 2010s, and the COVID crash and recovery.
Through all of that, Nvidia has never seen revenues pop more than 50% quarter-over-quarter. Even during the internet-powered tech boom of the 1990s, the cloud-powered tech boom of the 2010s, and the Covid-powered tech boom of 2020/21, Nvidia never reported a 50%-plus sales pop from one quarter to the next.
That had to wait until today – until the AI-powered tech boom of the 2020s.
NVDA Is Breaking Wall Street Records
Nvidia’s estimate for revenues will rise 53% from the first quarter to the second. That marks the first time in public company history – the first time in 25 years – that Nvidia will report a 50% surge in sales from one quarter to the next.
It’s an unprecedented growth surge to match an unprecedented tech boom.
AI isn’t crypto. It isn’t the metaverse. It’s not pot stocks, NFTs, ICOs, or SPACs.
It is the second coming of the internet – but bigger.
And Wall Street realizes this.
Last night, Nvidia stock shot up as much as 30% after hours. It added $200 billion in market value in a matter of minutes.
But it wasn’t alone. Other AI stocks caught a bid, too. Alphabet and Microsoft (MSFT) both jumped. So did AI service providers like Palantir (PLTR) and C3.ai (AI), as well as other chipmakers like Advanced Micro Devices (AMD).
Altogether, AI stocks added about $300 billion in market value in about an hour yesterday afternoon.
For context, that’s more the entire market value of Coca-Cola (KO).
Coca-Cola was founded in 1893. It spent 131 years trying to create $300 billion in economic value.
AI stocks created that much value in an hour yesterday afternoon.
The AI stock boom has arrived.
And it’s not going anywhere anytime soon.
The Final Word
Last year was a rough year for investors. Stocks were crushed big-time.
But guess what? The massive internet-powered tech bull market of the 1990s – the one wherein certain tech stocks like Microsoft and Cisco (CSCO) soared thousands of percent – also started with a steep drop in stocks in 1990.
History is repeating itself. Up next? A massive AI-powered tech bull market throughout the 2020s, wherein certain AI stocks will soar thousands of percent.
It’s a tiny, brand-new firm, developing the next-generation computers that we believe will be the foundation for all future AI software.
Indeed, these computers will be the foundation for the AI Revolution. This company could be the Intel (INTC) or Microsoft of the AI Age.
And the stock of the firm making these computers is currently trading for less than $15.
But time is of the essence here – because this tiny stock is already up more than 215% in 2023 alone!
Investors are starting to hear about this breakthrough tech stock. And amidst the AI frenzy, they’re buying it up in a hurry.
In fact, after Nvidia’s strong earnings report last night, it shot up sharply in after-hours trading, too.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.