Trade Alert

Trade Alert - A.I. Stock Ideas?

_{Posted by Club Member Mr.W 13.7.23}

is it too late to buy Nvidia now?

I think we all understand the bull case for Nvidia. Nvidia looks to have cornered the market for high-performance AI-chips, leading to explosive growth in sales. But at a trillion-dollar market cap, maybe its near-term growth has been priced in? Will Nvidia continue to beat expectations at its next quarterly earnings announcement?

I’m also looking at Snowflake, as a play for the AI space. As I see it, Snowflake provides software for data management and analytics, that is increasingly essential for businesses migrating in-house data to the cloud.

If you believe that cloud migration is a business trend that will only accelerate going forward, then you have to also believe that demand for cloud data management and analytics will continue to rise.

Snowflake is growing revenues over 50% yoy, and just announced a new partnership with Nvidia.

During the press release on June 26, Jensen Huang, founder and CEO of NVIDIA, said: “Together, NVIDIA and Snowflake will create an AI factory that helps enterprises turn their own valuable data into custom generative AI models to power groundbreaking new applications, right from the cloud platform that they use to run their businesses.”

Snowflake’s stock pop 8% over the next 2-3 trading days following the announcement, but has since given back most of those gains.

Snowflake is up 27% YTD, but remains over 55% below its all time high in 2021 of $392.

I’m leaning towards Snowflake over Nvidia for my AI stock, mostly given the massive run Nvidia had. But Nvidia clearly has better momentum. What's the club view on Nvidia vs Snowflake?

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