Five charts to start your day

The future of artificial intelligence already here according to the stock market

Nvidia has grown by another $325 billion since the New Year, equating to a rate of about $100 billion a week.

What’s driving the company's valuation upwards? AI of course and Nvidia is perfectly positioned to benefit from this trend. Nvidia's GPU technology, originally developed for gaming, has been brilliantly adapted for AI applications. GPUs are ideal for AI due to their parallel processing capabilities, which are essential for handling large data sets and complex computations required in AI and deep learning.

Nvidia’s GPUs have placed it at the forefront of the AI revolution, meeting rising demands across various industries such as data centres, car manufacturing and healthcare. However, the market might also be pricing in a lot of future growth, perhaps excessively.

The company is currently trading with an eye-watering trailing price-to-earnings ratio of 80 times. Its forward price-to-earnings ratio, however, is a more moderate 30 times. And its PEG ratio is only 0.6 (anything below one is usually considered favourable).

The company is also broadening its customer base, moving from large language model startups and consumer internet companies to sovereign AI cloud and enterprise software players. So, perhaps this valuation is justified. We will have to wait and see.

Nvidia grows another $325 billion in January

Source: Eeagli

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