Hey traders,
I’ve been getting this question for a while. But especially since I wrote yesterday about how I’m going to play NVDA earnings today.
“Why are you so bullish on Nvidia?”
Let me break it down for you.
In short, I think Nvidia is a once-in-a-lifetime opportunity. They’re in this unique position of not being directly in the AI business, but still being the most critical part of it — all because of their chips.
It reminds me of the gold rush days, where the guys who made all the money weren’t the ones digging for gold, but the ones selling the shovels and pickaxes.
Nvidia is the modern-day “shovel seller.”
While companies like Microsoft, Google, Meta, and Amazon are digging for AI gold, Nvidia is sitting pretty, selling them the tools they need — their GPUs.
Think about it: Amazon, Google, Meta, and Microsoft are on track to spend $185 billion on AI before the end of the year, according to a JPMorgan analysis. And where is most of that money going? Right into Nvidia’s pocket.
Meta alone spent $8.5 billion in the second quarter on computing infrastructure for AI and the metaverse. They plan to spend between $37 billion and $40 billion this year. But here’s the kicker: CEO Mark Zuckerberg told investors not to expect immediate returns. He said it could be years before they see any real money from these investments.
Meanwhile, whether Amazon, Google Meta or anyone else figures out how to make money with AI or not — all that cash is flowing straight to Nvidia! They’ve got a stranglehold on the hottest industry we’ve seen in the last 100 years.
And when I say stranglehold, I mean it. There are other chipmakers out there — AMD, ARM and even Intel.
But Nvidia had a leg up when AI came along, because the chips they were already making for computer gamers and cryptocurrency miners, just happened to be perfect for running AI.
So, while everyone else is focused on the “gold” (AI profits), Nvidia is cashing in on the tools needed to get there. That’s why I’m so bullish on this stock.
Trade well,
Jack Carter
P.S. NVDA earnings is one thing, but if you want to see how I plan to play NVDA for the long term, you need to see this plan I’ve laid out.
