As AI Supercharges Nvidia’s Business, Our Predictive Software Spotlights Where the Stock Trades Next

By TradeSmith Editorial Staff

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I’m a natural tinkerer — as a kid I took apart toy race cars and modified them to go faster — and have an unquenchable thirst to peek “under the hood” to understand how technical things work.

That “need to know” certainly extends to artificial intelligence — including the AI-powered ChatGPT. And when the excitement over ChatGPT spooled up months ago — and folks were fascinated by its ability to write a children’s book in 72 hours — I was more intrigued by how it could make that happen.

And, as the head of an investing venture like TradeSmith, the very real moneymaking opportunities AI creates for our customers.

That’s why, back on March 2, I told you here about chipmaker Nvidia Corp. (NVDA), when its shares were trading at about $224.

Nvidia makes the A100, a $10,000 chip that’s helping power the “AI arms race.”

The company also sells the DGX A100, which is eight A100 GPUs working together.

I shared this because this special technology put Nvidia in a lead position in the AI revolution. Indeed, analysts at Citigroup are currently forecasting that ChatGPT growth alone could funnel an additional $3 billion to $11 billion in revenue into Nvidia’s coffers from the start of 2023 to the start of 2024.

Since our report to you here, Nvidia’s shares have rocketed to about $416 each — an 85% gain in five short months.

I’m not just sharing that as a kind of “victory lap” — because we all know that investing is very much a “what comes next” financial challenge.

So I’m going to do just that. I’m going to talk a bit about what comes next for Nvidia. And what our predictive tools are saying about what comes next for its share price.

The Next-Generation AI Chip

As of June, ChatGPT had 100 million users and over 1.6 billion visits to its websites – with folks asking it for cookie recipes, for help with emails, with respite from writer’s block, and even as a second set of eyes for scouring lines of code for software bugs.

But the problem is, the more folks turn to ChatGPT, the more memory and bandwidth it needs.

On the site Down for Everyone or Just Me, which lets people know if a website is not working for that specific person or if there are broader issues, it just recently detected an outage for 41 minutes on August 10.

With Nvidia’s brand-new GH200 (Grace CUP and Hopper GPU) and a dual GH200 system, Nvidia offers a solution.

I won’t bog you down with a technical-specs discussion (though, I confess, I’m personally fascinated).

But I will share more “what comes next” insight.

This newest innovation from Nvidia — which we should expect to see in the middle of next year — will add 70% in memory capacity and 50% in bandwidth to accommodate the stampede of new users.

Nvidia believes this can help companies cut costs while also increasing efficiency — a double win.

In short, while Nvidia has grabbed an early AI lead, it’s not standing pat. Historically, that “we’re never satisfied” mindset has been part and parcel of the company’s corporate culture.

And it certainly won’t stand pat in AI — quite likely the greatest growth window of our generation. Nvidia’s leadership team wants to build a lead so big that its rivals will never catch up.

We don’t have to wait for that to happen.

We can look at Nvidia through the lens of long-term investing and short-term investing to increase our moneymaking potential today.

Nvidia Under the TradeSmith Investing Microscope

Our Health Indicator was developed so that you could know the “investable state” of a company in an instant — whether it’s something to buy, hold with caution, or just flat-out avoid.

Nvidia is in our Green Zone as of this writing, which can be thought of as the green “Go” light on a traffic signal — it means this company is considered a “buy.”

We can also look at its Business Quality Score for additional confirmation of its long-term outlook.

Our Business Quality Score rates every company based on a composite of four broad quality metrics:

  • Growth: This metric measures changes in a company’s finances such as sales, profit, return on equity (ROE), return on assets (ROA), and cash flow over the past five years.
  • Profitability: This metric measures a company’s current level of profitability relative to its assets, sales, and shareholder equity.
  • Safety: This metric measures a company’s financial strength (debt burden, credit risk, etc.) and its stock’s historical volatility versus the overall market.
  • Payout: This metric measures how much of what a company earns benefits shareholders via dividends, net share buybacks, and debt repayment.
Our algorithms first calculate the current quality score for each stock compared to its history and all other stocks in our database. They then average those scores for each stock and rate the stock on a quality scale from 0 (lowest quality) to 100 (highest quality).

Nvidia has a stellar score of 91 — meaning it gallops along with other class-of-the-field companies.

But if you’ve found yourself getting caught in the trap of “buying at the wrong time” for long-term positions, don’t worry.

There’s something that can help — our predictive AI software we’ve code-named An-E.

This breakthrough A.I. stock forecasting system can sort through millions of data points in real time, making hyper-accurate stock price predictions…

Alerting us as to which stocks are poised to soar in the weeks ahead.

An-E has a bullish outlook on Nvidia stock, predicting the price will climb 5% by September 11.

That’s 5% — over the next month.

Along with the forward-looking picture I’ve painted, this serves as additional “what comes next” insight for Nvidia’s shares.

Bottom line: There’s been a lot of money made by owning Nvidia this year, but we aren’t looking backward. The company continues to bulk up its “AI Muscle,” with a leadership market position, superior technology, a commitment to keep building, and an addressable market that’s growing at hypersonic speeds. Adding to that “intelligence” is the fact that our predictive analytics say that Nvidia is in a healthy and investable state with a stellar Business Quality Score. The most bullish analysts have a $1,000 price target on Nvidia over the next 12 months — 140% higher than where it’s trading right now. The short-term outlook is also favorable, with the stock price expected to climb more than 5% over the next month. And before you go, if you’re also looking for the “next Nvidia,” I wanted to make sure I passed this along.