Would you buy this stock?
How about this one?
The second chart looks a lot more attractive, doesn’t it?
But if you look closely, you see it’s actually the same stock. The top chart shows NVIDIA (NVDA) since last October. It took a beating in the end-of-year selling. Even with a better start to 2019, it is down more than 45% since October 1.
The bottom chart shows NVIDIA over the last five years, when it has made a lot of investors a lot of money. The stock surged from less than $20 to nearly $300 last fall before pulling back to current prices above $150.
So which chart tells the real story?
That’s what a lot of investors have tried to figure out. In fact, NVIDIA was one of the most-searched stocks on InvestorPlace.com late last year and early this year. It still draws a lot of interest.
You probably won’t like the answer to the above question… both charts tell the real story.
NVIDIA took a beating to end 2018 along with a lot of tech companies. Trade tariffs and tensions with China definitely hurt companies that make semiconductors, and NVIDIA is one of the leaders.
And yet, because NVIDIA is a leading chipmaker, the stock has multiplied a few times over in the last five years. More and more products already require chips. And as technology and connectivity continue to advance, we’ll soon be at the point where just about everything has a chip in it.
The Theme that Connects It All
NVIDIA reports earnings after the close tomorrow, on February 14. I’ll be watching closely for a couple of reasons. I like the company. It is a major player in a bunch of disruptive technology, from gaming to cloud computing to robots and self-driving vehicles.
One big theme that connects all of those is artificial intelligence, or AI, as everyone calls it.
Artificial intelligence uses computers to complete tasks that would normally require human input. There are different variations of the theme.
Machine learning gives technology the ability to learn on its own – without having to be explicitly programmed. This is done through algorithms that analyze large amounts of data and find often-overlooked patterns.
Computers can identify even the smallest of patterns in just seconds, whereas it might take a human years to do the same thing, if at all. Traditional AI is limited because it can only go as far as the original programming. But with machine learning, the computer is constantly adapting.
Deep learning is similar in that machines become smarter, but that is taken to a whole other level. This technology uses an artificial neural network in which each neuron has a yes or no answer. Layering millions of these allows the computer to complete and predict very complicated matters with much more processing power than that of a human.
We can see this in action in a computer detecting a disease before a doctor would even have time to read the test results.
Countless advancements are possible with AI, from the cool to the game changing… like self-driving cars or computers that can beat world chess champions.
AI is already a part of our everyday lives. You know those personalized recommendations that pop up on Amazon? They are a product of AI. They are also amazingly good at predicting what I like and need. I often find myself clicking “buy now”… helping to make Jeff Bezos the richest man in the world.
A 10X Opportunity
According to Persistence Market Research, the global deep learning market will grow from $4.8 billion in 2017 to $261 billion by 2027… that’s more than 5,000% growth in just 10 years.
With that kind of growth, it’s not too early to start making money on the trend.
The largest names in tech have been buying up AI and deep learning companies. Alphabet (GOOGL), Apple (AAPL), Facebook (FB), and Amazon (AMZN) are accumulating the knowledge and technology needed to incorporate AI and deep learning even more into their everyday business models.
NVIDIA is a great company and should benefit from AI over time. I like the stock quite a bit and am watching it closely, including tomorrow’s earnings report. Depending on a few factors, I may recommend it to my readers in the near future.
Right now, my favorite opportunity to make big money in deep learning is a much smaller company (market cap under $2 billion) that will be a major player in AI and deep learning. I recently added it to what I call The 10X Venture Portfolio in Early Stage Investor. I see more upside potential than NVIDIA, Amazon, or just about any other big company you can think of.
This company helps any business manage all of the public facts about itself that it wants the world to know. Think there’s a market for that?
In this day and age, if the information about a company is not accurate in the world wide web, it could destroy a business. My new recommendation uses deep learning and AI to store information in real-time. The company works with all industries and has been especially popular with the restaurant, financial services, retail, healthcare, and automotive sectors.
This company is a leader in a niche business driven by AI and deep learning and is part of the technology revolution. I put it in the 10X portfolio exactly one month ago. It is already up 25%, which I see as just the beginning.
Long term, the stock has the potential for 10X growth.
P.S. Venture capitalists are the early backers of start-up companies. They are the grand slam, home run hitters of the investment world. Make just one great venture-capital investment and you’ll probably never have to worry about money.
We don’t recommend non-public companies in my Early Stage Investor research service, but we very much employ a venture capital mindset.
We are looking to hit those grand slam home runs. We are looking to make hundreds, even thousands of percent returns in the world’s best early-stage public companies, like the AI leader I just mentioned. Click here to learn more.
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