AI Weekly Bubble Watch: Nvidia Steady, AMD and SMCI Stumbled




Skeptical investors who misjudged the exponential growth of artificial intelligence hardware continue to watch the sector closely. At present, cautious investors may watch for clues that the AI is in a bubble.

The leading AI stock, Nvidia (NVDA), shook off selling pressure by adding 5.62% for the week. Its market capitalization is $2.696 trillion. The stock will eventually surpass Apple (AAPL) with its $2.95 trillion. Nvidia enjoys persistent growth from its moat built around its CUDA cores. Apple, however, is artificially supporting the share price with too big a stock buyback program.

Apple needs a strategy that embraces AI tools on its platform.

AMD (AMD) found support at its 50-day simple moving average, gaining 4.03% on the week. At a 243.8 times price-to-earnings ratio, the positive sentiment may fade at any time. Be wary of starting a position in AMD stock today.

Super Micro (SMCI) lost 7.4% on the week. Since March, shares have been on a downtrend. Dell (DELL), which SMCI may loosely consider a competitor, posted poor growth and lost 9.12% last week.

HP Inc. (HPQ) roared ahead last week only to give up gains post-earnings. HP’s PC sales more than offset its weak printer division. Investors should not consider HPQ stock an AI play. Yet the volatility in the stock is a warning that sentiment for AI stocks could change quickly.



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