The biggest AI growth stocks of the past years has been NVidia without a doubt.
NVD originally created chips for computer chips, but it has expanded into a semi-conductor company producing the AI chips essential for AI/Machine Learning Technologies.
Since 1999, NVD has absolutely destroyed the S&P 500.
The question is whether it can sustain this growth?
I do not think so, for three reasons:
• AI is trading at 75 times its earnings. Obviously, NVidia has huge scope for growth, but this seems like a wish and not a reality.
• The AI hype is very strong at the moment
• The tech giants are building their own chips, so they do not have to forfeit their profits. Tesla was working with NVD for example, but now they’re producing their own chips:
Turning To Venture Capital
If you turn to the VCs, that’s where the real money is being made.
VC investment in AI and Machine Learning has absolutely sky-rocketed in the past few years…
There is currently a next generation of chip makers being funded by VCs. If you waited for those to go public, it would be a boss move.
One company I have been following is Graphcore:
Graphcore are producing these nest generation of chips…
• The CEO of graphcore founded Icera which was sold to NVidia in 2012 for $400m
• It has been funded by Sequoia Capital and Atomico to the tune of roughly $80m
• Its featured in the CB insights AI 100:
Graphcore is still a private company. But it may not be far until it is a fully fledged public company. Put a Google Alert on the company with the an IPO keyword, so you can follow the company if (when) it goes public!