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Recent comments from Nvidia CEO Jensen Huang seemed to revive investment in the turbulent AI sector this week, while leading portfolio managers to recenter attention on the winning trades. “We’re now in this computer revolution,” Huang said at the Goldman Sachs Communacopia + Technology Conference on Wednesday, “This generative AI is not just a tool. This is a skill … this is why a new industry has been created.” Huang said he sees data centers as a $1 trillion opportunity at minimum, with growth that will be accelerated thanks to generative artificial intelligence. Nvidia shares rallied more than 8% on the heels of Huang’s remarks, which soothed some recent market jitters over the delayed payoff from AI investments. For the week, AI and semiconductor names such as Advanced Micro Devices, Marvell Technology, Super Micro Computer and Broadcom rallied double digits. NVDA 1M mountain Nvidia shares over the past month. “When Jensen says something like that, it indicates an optimism that there’s enough demand to at least sustain growth for the next 1-3, years,” said John Belton, portfolio manager at Gabelli Funds, referring to commentary about scaling manufacturing capacity manufacturing with Taiwan Semiconductor Manufacturing . “That’s what got the market so excited.” While Huang’s comments may have reignited confidence in the turbulent space, investors see a variety of ways to play the opportunity over the short- and long-term. Beyond mainstay Nvidia, CFRA’s Angelo Zino views hardware players as the biggest beneficiaries in the short-run as the initial build-out stage carries on. That includes Advanced Micro Devices as it ramps up its competing GPUs and networking players Broadcom and Marvell Technology that are supporting custom silicon chips in the works by Meta Platforms and others. Micron Technology should continue to profit off of rising memory needs, he said. Apple made headlines this week with the launch of its new iPhone 16 , with AI capabilities dubbed Apple Intelligence. Some Wall Street analysts appeared underwhelmed by the updates , casting some doubts on previous calls for a one-of-a-kind upgrade cycle. Zino isn’t concerned by this. Longer term, he views Apple as the leading AI device play and AI personal assistant, especially as more consumers adopt its Vision Pro headset. Dell should benefit as the leading enterprise player as margins improve into the new year, he added. AMAT 3M mountain Applied Materials shares over the past three months. Belton is betting on infrastructure and equipment companies such as Applied Materials and KLA Corporation . Longer-term winners that build-out end user applications for AI may be too soon to call, he said. The rise of AI has spurred thousands of companies to hop on the train, fanning some concerns that investors could see a reprise of the dotcom bubble that burst in the early 2000s, said Mark Malek, chief investment officer at SiebertNXT. The firm — an early investor in Nvidia — views technology giants at the forefront of the cloud, including Microsoft , Alphabet and Amazon as ongoing beneficiaries of AI tailwinds, but notes that the biggest innovation is happening in the private markets. “The real thing is that what is lurking in the shadows, and those are mostly private companies,” he said.
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https://www.cnbc.com/2024/09/14/nvidia-ceo-jensen-huang-revived-the-ai-trade-this-week-heres-how-the-pros-are-playing-it.html
