Nvidia (NVDA) did it again.
The artificial intelligence (AI) chip king smashed through all-time highs after achieving record earnings.
AI chip sales quintupled over the past year.
I’ve never seen this kind of rapid growth from a multitrillion-dollar company before. Nobody has, because it’s never happened. We’re part of history.
- Takeaway #1: The AI infrastructure boom has legs.
AI revamping our largest and most important industries will last decades.
The AI buildout is the largest infrastructure project ever. This year alone, Microsoft (MSFT), Amazon (AMZN), Google (GOOG), and Facebook (META) will spend $170+ billion building data centers.
Over the next 3–4 years, companies will spend more money on chips and servers than the US government spent putting a man on the moon or building America’s highways.
This spending won’t slow down anytime soon because AI investments are more than “worth it.”
Alaska Air Group (ALK) saved 500,000,000 gallons of fuel last year thanks to its AI navigation system, which acts like “Google Maps, in the air.”
I guarantee this covered the money it spent on AI many times over.
Every other airline is looking at this and thinking, “We need AI, too.”
- Takeaway #2: AI stocks get the green light.
Nvidia and several other AI winners had traded sideways since March. These record results are the catalyst to push them to new highs.
AI will remain the dominant investing theme for at least the next year. Nvidia can become the world’s largest company before the AI boom is over.
Nvidia also announced a 10-for-1 stock split.
This is noise.
Stock splits are the financial equivalent of exchanging a $10 bill for 10 $1 bills. It doesn’t make the stock any cheaper.
But many investors prefer stocks that trade for a lower dollar amount. Nvidia at $100/share looks a lot cheaper than Nvidia at $1,000/share.
This is the stock of a lifetime. Congratulations to all the subscribers who bought it when I first recommended in back in 2018.
We took profits on Nvidia in our flagship newsletter, Disruption Investor, a few months ago. We still own a little, but we’re more focused on the lesser-known areas of the AI buildout.
This is a megatrend you can’t afford to ignore.
- Would you pay $100,000/year for a college degree?
That’s the price freshmen studying engineering at Vanderbilt University are expected to pay.
Tuition… room… board… personal expenses… and a good laptop. That’ll be $98,426, please.
Coincidently, I’m headed to Vanderbilt in Nashville for a private AI gathering. I’ll check out the college and let you know if it’s worth $100K/year!
I know this is an outlier. And most kids won’t pay the sticker price. But it’s still disgusting. Kids are still burying themselves in mountains of debt to get an education.
The good news: AI is going to take a sledgehammer to college.
Recently, I explained how the new ChatGPT can basically clone the world’s best tutor and give it to every student with an internet connection.
Robo-tutors are like hiring a personal coach for your kids, but for a fraction of the cost. How long before AI can teach an entire four-year degree… for next to free?
More kids—especially our best and brightest studying in fields like engineering and math—will start leveraging AI to get ahead.
That means less teens willing to fork out $100K/year to sit in a classroom.
We’re going to need a lot more AI infrastructure to power “GPT University.”
- I got a message from a buddy who lives in Washington, DC…
“Rode in a Waymo last night. Hard to convey how mind-blowing it was. Hope robo-taxis invade this city so I can stop owning a car.”
Self-driving cars are quietly making huge strides.
Not too long ago, robo-taxis only worked in perfect conditions—like wide roads in sunny, suburban Phoenix. But Google’s Waymo is now chauffeuring folks around the busy streets of LA… San Francisco… Austin… and DC.
I was jogging through downtown DC recently and spotted a Waymo robo-taxi cruising down the street. It’s bizarre to see a car with nobody behind the steering wheel.
Waymo is now serving 50,000 rides per week. That’s a 5X jump in just a few months and far higher than what most folks would guess.
I’ve ruffled feathers in the past with my bullish views on robo-taxis. I’m an even bigger believer now. It’s obvious that Waymos will be everywhere in a few years.
“Grandpa, do you remember when everyone used to own cars?”
Over 40,000 Americans were killed in car crashes last year.
Don’t you think robo-taxis with literal electronic eyes in the back of their heads… that never break the speed limit… never drink and drive... and never send a text message could help with this? I do.
It’ll become socially unacceptable in some cities to take the wheel.
Cheap, safe robot driving, at your service.
Stephen McBride
Chief Analyst, RiskHedge
|
