Nvidia ties with Microsoft as the most valuable company in the world; Apple has an unprecedented share-buyback program; A look at Alphabet's new AI video-generation model, Veo 3; The 'dumb money' isn't so dumb anymore

1) After reporting strong earnings, chipmaker Nvidia's (NVDA) stock jumped 3.3% yesterday. The company has surpassed Apple (AAPL) to essentially tie with Microsoft (MSFT) as the most valuable company in the world, with a $3.4 trillion market cap.

The chart below, posted on social platform X, compares Nvidia and Apple's quarterly net income. You can see Nvidia's huge, consistent rise starting in 2023:

Starting from such a large base (around $1.5 billion in net income at the end of 2022), I'm not sure any company in history has grown as much as Nvidia has in the past two-plus years. It's an extraordinary feat...

2) In the above chart, you'll also see that Apple's earnings have been pretty much flat on average since 2021. But the company has increased its earnings per share by about 14% in the past three and a half years thanks to an unprecedented share-buyback program, which is captured nicely in this chart courtesy of Charlie Bilello:

While buybacks can be effective, I much prefer to see a stock moving upward due to revenue and profit growth. That's why I've been recommending Meta Platforms (META) and Alphabet (GOOGL) over Apple for the last five years.

3) Speaking of Alphabet... In last Thursday's e-mail, I shared a number of reasons why I continue to pound the table on its stock, including Google Meet's real-time translation, as shown in this video.

And here's an even more amazing example of Alphabet's innovation: At its recent Google I/O 2025 conference, the company announced a new AI video-generation model, Veo 3. It can create realistic eight-second clips with synchronized audio, including dialogue, sound effects, and background music.

It's currently only available in the U.S. via the Google AI Ultra subscription plan for $249.99 per month, but you can see 20 examples of its output here – it's mind-blowing!

For more examples, see this 23-minute YouTube video:

Finally, here's a seven-minute YouTube video by two Wall Street Journal tech columnists:

In the accompanying article, they explain the difficult filmmaking process: We Made a Film With AI. You'll Be Blown Away – and Freaked Out. Excerpt:

Over a thousand clips, days of work and who knows how much data-center computing power later, we ended up with a three-minute film – about my life with a new kind of efficiency robot. Even if you don't care about camera angles or storyboards, you might care about what this says about using AI in any job.

The article has three main takeaways from their experience: With AI, you can make anything, but you still need to put in the work, and you need human creativity.

All in all, this new innovation reinforces my bullishness on Alphabet.

4) In my May 13 e-mail, I shared data which showed that individual investors were buying at the market lows last month. Meanwhile the professionals were panicking and selling – as usual, doing the wrong thing at the wrong time, which is why the vast majority of actively managed funds consistently underperform the indices.

That's why individual investors have been shifting their money accordingly for the past decade. You can see it in the chart below, courtesy of this article by Ben Carlson: The Dumb Money Isn't So Dumb Anymore.

Here's an excerpt from the article:

[Back in 2005, there] were higher minimums, higher fees, no zero-trade commissions, less automation and a bunch of antiquated legacy financial firms that generally made it difficult to invest if you were just starting out.

Now we have much better resources. The barriers to entry have vanished. You can now set up an account on your iPhone and buy fractional shares of stocks five minutes later. Plus, investors have been beaten over the head for 15 years straight about the power of long-term thinking, market timing is hard, don't panic, etc.

In the old days, the assumption was that retail investors would buy high and sell low. They got greedy when others were greedy and fearful when others were fearful.

That's not the case anymore.

The dumb money isn't so dumb anymore.

There's still plenty of speculation in our markets, and Wall Street is, as always, peddling garbage. But overall, I think Carlson is right that average investors "are making better decisions than ever before."

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.