The stock market is currently experiencing a wave of enthusiasm for artificial intelligence. Nvidia’s recent earnings call marked a year since the chipmaker surprised Wall Street with its demand for AI chips. Mentions of AI in earnings calls have increased by 186% since the first quarter of 2023, according to Bank of America Research. The conversation about AI has expanded beyond chipmakers like Nvidia and AMD to include advanced AI users like Alphabet, Goal, Amazon, and Microsoft.
Bank of America’s U.S. and Canada equity strategist Ohsung Kwon noted that the focus on AI has shifted from just NVDA, with other sectors like energy, public services, and raw materials now benefitting from increased energy use. This shift has been reflected in the market, with various precious metals reaching recent highs and the utilities and energy sectors emerging as top performers in the S&P 500 this year.
Individual companies are also experiencing significant growth, rivaling Nvidia’s rise. Vistra Corp and Constellation Energy have seen substantial increases in their stock prices, in line with Nvidia’s performance. Morgan Stanley’s chief investment officer Mike Wilson highlighted utilities as an overweight sector, emphasizing the opportunities presented by the power of the AI theme. Wilson suggested that electricity consumption in the US could significantly increase by 2030, driven by new AI data centers.
Research from Goldman Sachs’ equity strategy team showed a spike in mentions of AI during earnings calls in the first quarter. More energy companies are discussing AI in their reports, indicating the growing importance of AI in various sectors. Investors are closely watching Nvidia’s reports on the demand for AI chips, as the company has consistently exceeded analyst expectations and strengthened its outlook amid high demand for its AI servers.
However, there are concerns about the sustainability of this trend. JPMorgan Asset Management Global Markets strategist Jack Manley warned of potential market volatility if valuations based on AI expectations are reevaluated. The impact of Nvidia’s performance on different sectors will be closely monitored in the coming months.
In conclusion, the widespread interest in artificial intelligence has significantly impacted the stock market, with various sectors and individual companies benefiting from the AI trend. Investors and analysts are closely monitoring companies like Nvidia and their performance in this evolving landscape of AI technology. The implications of these developments could have far-reaching effects across different industries.
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https://finance.yahoo.com/news/what-nvidia-says-about-ai-chip-demand-could-matter-for-more-than-just-the-tech-trade-165226749.html
