Despite recent volatility that sent Nvidia (NASDAQ: NVDA) stock swinging by 50% in both directions and large hedge funds selling their stakes, Wedbush’s Managing Director and Senior Equity Research Analyst Dan Ives predicts that Nvidia will trigger the next stock boom.
In an August 16 tweet, the Wedbush analyst emphasized the importance of Nvidia and its CEO Jensen Huang, called “Godfather of AI” by Ives, in the current “Internet Moment,” which presents an opportunity to focus on tech winners of the fourth Industrial Revolution.
Why is Nvidia so important?
The resilience of Nvidia stock was showcased recently when this semiconductor stock lost over 25% of its value from July 10 to August 7, falling below $100 valuation, before making up almost all of the losses in a little over a week by adding 24% and closing trading at $122.36 on August 15.
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However, its significance lies in its sway over the artificial intelligence (AI) industry, with analysts from Citi forecasting that its market share will rise to over 90% in the coming years.
This thesis correlates well with a rapidly expanding AI landscape. Hundreds of billions are expected to flow into the industry, and estimates place the target at around $800 billion by 2030.
Who are the potential tech stock winners?
The hardware winners in the current landscape are evident; in addition to Nvidia, Advanced Micro Devices (NASDAQ: AMD), Qualcomm (NASDAQ: QCOM), and potentially Broadcom (NASDAQ: AVGO) are currently clear-cut winners as they adjust their applications to serve the broader industry and address the needs of various clients.
In the cloud sector, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), and Oracle (NASDAQ: ORCL) are expected to continue excelling.
Palantir (NYSE: PLTR) has secured a significant advantage in disrupting the enterprise data layer, although its future prospects are closely tied to its success in revenue stream diversification.
Could one sleeping giant make a comeback?
On August 14, Cisco (NASDAQ: CSCO) announced a beat on earnings in its Q4 report while revealing a $0.87 EPS, above expectations of $0.85, and revenue slightly above estimates of $13.54 billion at $13.64 billion.
In addition to a beat on earnings, Cisco announced the continuation of its restructuring efforts, saying that it will cut 7% of its global workforce to reorganize and prioritize artificial intelligence and cybersecurity.
The news saw CSCO stock add almost 10% to its share value in the previous two trading sessions, closing on August 15 at $48.53.
This performance prompts a question of whether the current AI revolution will include some old players from the Dot-com bubble, whose time has already passed, and whether others like Nvidia are doomed to the same fate.
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