Skeptical investors who misjudged the exponential growth of artificial intelligence hardware continue to watch the sector closely. At present, cautious investors may watch for clues that the AI is in a bubble.
The leading AI stock, Nvidia (NVDA), shook off selling pressure by adding 5.62% for the week. Its market capitalization is $2.696 trillion. The stock will eventually surpass Apple (AAPL) with its $2.95 trillion. Nvidia enjoys persistent growth from its moat built around its CUDA cores. Apple, however, is artificially supporting the share price with too big a stock buyback program.
Apple needs a strategy that embraces AI tools on its platform.
AMD (AMD) found support at its 50-day simple moving average, gaining 4.03% on the week. At a 243.8 times price-to-earnings ratio, the positive sentiment may fade at any time. Be wary of starting a position in AMD stock today.
Super Micro (SMCI) lost 7.4% on the week. Since March, shares have been on a downtrend. Dell (DELL), which SMCI may loosely consider a competitor, posted poor growth and lost 9.12% last week.
HP Inc. (HPQ) roared ahead last week only to give up gains post-earnings. HP’s PC sales more than offset its weak printer division. Investors should not consider HPQ stock an AI play. Yet the volatility in the stock is a warning that sentiment for AI stocks could change quickly.
