Wall Street is expected to continue its recent gains, fueled by optimism around Nvidia's upcoming earnings and the potential long-term boost in earnings per share from the adoption of artificial intelligence (AI). According to Goldman Sachs, companies with high exposure to AI adoption and larger size are likely to see increased valuation multiples as the adoption timeline becomes clearer.
Hedge fund Citadel, led by Ken Griffin, has become the most profitable hedge fund in history, with $66 billion in earnings, and Griffin’s recent stock purchases in Amazon and Microsoft indicate high confidence in the companies’ AI potential. The AI boom could drive the next bull market, with Amazon and Microsoft poised to benefit greatly from the growing demand for AI.
U.S. stocks begin the final week of August with a positive start, Goldman Sachs sells its personal financial management unit, Microsoft emphasizes the need for human control over artificial intelligence, Google plans to license solar and environment data, Nvidia is hailed as the world's most valuable chipmaker, and analysts offer mixed views on the strength of the U.S. consumer and the future of the retail sector.
Schrodinger's stock has surged this year due to AI hype and the strength of its drug discovery business, with its physics-based software platform offering accurate predictions of molecule properties and increasing the odds of finding suitable molecules, presenting a potentially valuable opportunity for investors.
Summary: Many investors are predicting a new bull market for the S&P 500, and while it has yet to reach a new high, it is only 7% away; three stocks to consider buying are Amazon, which has a strong presence in the logistics market and opportunities in AI, Mastercard, which benefits from its business moat and growth in emerging markets, and Vertex Pharmaceuticals, which has potential catalysts in its pipeline and an attractive valuation.
Verizon, Medtronic, Hasbro, Dell, and Walmart are highlighted as attractive dividend stocks by Wall Street analysts, offering investors potential income and long-term returns.
Stock investors should focus on long-term beneficiaries of artificial intelligence, as near-term beneficiaries have already experienced significant share price increases, according to Goldman Sachs. Companies across various sectors, such as communication services, consumer discretionary, financials, and information technology, are expected to see a boost in their earnings per share from AI adoption.
Wall Street is closely monitoring the Fed and Jay Powell's speech, with rising oil prices being a concern, but the general sentiment remains positive for the tech sector, as evidenced by the success of top-ranked Zacks stocks in the tech sector, including AppLovin, Vertiv Holdings, and ePlus Inc.
Berkshire Hathaway CEO Warren Buffett owns a sizable stake in Microsoft through a secret portfolio, and several factors suggest that investing in Microsoft stock now could be a good choice, including its broad customer base, rock-solid balance sheet, growing dividend, and its positioning in the artificial intelligence market.
Wall Street stocks rebound as investors shake off concerns about the Federal Reserve's interest rate strategy, with the S&P 500 and Dow Jones both posting gains, while the Nasdaq Composite also rises; investors are now looking ahead to the PCE inflation data and second quarter GDP reading for more insight into the Fed's rate path, as well as the potential impact of a government shutdown and debt woes at Chinese property developers. Meanwhile, Goldman Sachs interns express optimism about the positive impact of AI on society, concerns arise that student loan repayments could hinder retail sales, President Biden announces plans to visit the United Auto Workers strike in Michigan, and Amazon invests up to $4 billion in AI startup Anthropic.
Despite recent challenges and concerns in the tech industry, analysts remain bullish on Nvidia stock, citing its impressive year-to-date rally and demand for its advanced AI chips as reasons for optimism. Wall Street expects continued upside in the stock and predicts that the demand for Nvidia's chips will drive long-term revenue and earnings growth.
Charlie Munger, vice chairman of Berkshire Hathaway, is skeptical of the hype surrounding artificial intelligence and believes it is getting more attention than it deserves, despite acknowledging its importance; Munger also criticizes cryptocurrencies, calling them a "stupid investment."
Charlie Munger, the vice chairman of Berkshire Hathaway, believes that most digital assets, including Bitcoin, will eventually become worthless, and he considers investing in cryptocurrencies to be foolish. He is also skeptical of the hype surrounding artificial intelligence, stating that traditional intelligence is more effective.
