Semiconductors Are All-In on AI
Artificial intelligence ("AI") is all the buzz right now...
It's one of the hottest topics in the market. At the end of January, I told you that the chatbot ChatGPT was asked to create a market-beating exchange-traded fund. About a week later, I broke down the meaning of "generative AI."
And yesterday, AI was once again in the headlines after chipmaker Nvidia (NVDA) reported its quarterly earnings and beat the Street on strong demand for its chips – which, as you may have guessed, are used for AI.
This is about to be a major tailwind for the semiconductor sector as a whole...
Headline No. 1:
Nvidia and other chip companies are jumping into the ChatGPT frenzy.
McCall's Call: Semiconductor giant Nvidia reported sales of $6.05 billion and earnings of $0.88 per share in yesterday's quarterly report. Those results topped expectations of $6.02 billion and $0.80 per share, respectively. And Nvidia's shares blasted 14% higher throughout the day on the news.
New AI technologies require massive computing power, which means companies will need to buy more advanced chips from businesses like Nvidia. That's providing a major boost to semiconductor stocks, and it could pave the way for new revenue streams for these firms, too.
Nvidia CEO Jensen Huang had this to say about the big uptick in interest in AI:
There's no question that whatever our views are of this year as we enter the year has been fairly dramatically changed as a result of the last 60, 90 days.
That's how quickly things change in today's world. As I often say, innovation doesn't sleep. There are always companies and individuals developing new and incredible technologies.
A few months ago, hardly anyone was talking about generative AI or ChatGPT. But now, these topics are part of everyday conversation. That's what Huang is hinting at. In just the past two months, there have been some major changes in the AI space.
According to Bank of America analyst Vivek Arya, generative AI could add about $20 billion annually to the overall AI chip market in the next four years. So there's a big potential market for just this niche segment.
You'll likely recognize some of the leading tech firms that are developing their own AI tools – including Microsoft (MSFT), Alphabet (GOOGL), and Baidu (BIDU). But there are also smaller AI firms out there pushing the sector – such as C3.ai (AI), SoundHound AI (SOUN), and BigBear.ai (BBAI).
Semiconductors will benefit from this trend, too. So it may be worth keeping eye on chip stocks, including Nvidia, Advanced Micro Devices (AMD), and Intel (INTC).
You can bet I'm watching this entire industry for investing opportunities. My subscribers will be the first to know when the right one comes across my screen.
Headline No. 2:
Apple (AAPL) is making strides toward a no-prick glucose monitor.
McCall's Call: I'm a bit of a health nut. That should come as no surprise to regular readers. In 2021, I traveled to New York for a day of extensive exams – where doctors crammed a year's worth of preventative testing into just a few hours.
So you can bet I'm very plugged in to what's going on in the health care industry.
Apple's news is big. The company is getting close to developing a monitor for blood sugar that doesn't require pricking your fingers for blood.
The iPhone-sized device will track blood sugar using electromagnetic waves and can be worn. The feature could even be added to Apple's watches in time, which furthers the company's move into health technology.
Health data is becoming a crucial trend. The more real-time data that doctors can get on their patients, the quicker they can spot and either prevent or treat health issues.
"Wearables" are the key to the boom in health data...
Devices like the Apple Watch, Fitbit (now owned by Alphabet), and Whoop are making it easier than ever for people to monitor their sleep, heart rate, skin temperature, and more. Some devices can perform electrocardiograms to track abnormal heart rates.
Wearable health monitors will become even more popular in the coming years as people look to be more in control of their health. The data is extremely valuable to patients, doctors, and insurers alike. So it's a win for everyone involved.
Aside from Apple, tech company Garmin (GRMN) also offers heart rate and workout trackers as part of its suite of wearable tech. DexCom (DXCM) is more of a pure play in wearable diabetes monitoring, with its glucose tracker that sticks right on a patient's body.
These are companies that I'm keeping an eye on for future investment opportunities in the health-data space. And I have even more on my watch list.
The focus on health care technology will only grow throughout the Roaring 2020s. That's why the future of health care is one of the trends that my team and I follow closely in The McCall Report. In fact, there's a portfolio dedicated solely to it!
If you'd like to learn more about the massive upside potential within this hypergrowth megatrend, I urge you to click here to find out how to claim a risk-free membership.
Here's to the future,
Matt McCall
Editor, Daily Insight
February 24, 2023
Did You Miss My Latest Podcast?
On this episode of Making Money With Matt McCall, I invite C. Scott Garliss back on the show. He's one of the most plugged-in analysts at Stansberry Research and the editor of Stansberry NewsWire. We dive into earnings from semiconductor giant Nvidia and discuss what's going on with the Federal Reserve and interest rates.
We also cover a big topic on Wall Street that's not getting a lot of attention yet – new drugs being used to fight obesity. This is a huge epidemic that's affecting millions of people around the world. And many pharmaceutical companies have jumped on the trend to develop drugs to fight against it. So, Scott shares two companies at the forefront of what could be a game changer in the fight against obesity. Tune in to hear their names.