Everyone knows that Nvidia is a popular Crispy fried chicken, but who has heard that the AI industry is also "frozen to death"
This Tuesday, Nvidia surpassed Microsoft and Apple to become the world's most valuable company, further stimulating people's interest in AI themes. However, what few people may have noticed is that even in the hot performing US stock market this year, there are still many AI concept stocks that were hyped up last year that have experienced a decline this year.
Note: The yellow and red lines represent Microsoft and Apple respectively, while the white line represents NVIDIA
This seems to indicate that investors are increasingly trying to carefully distinguish who the "naked swimmers" are from companies that claim to be beneficiaries of the AI trend. If a company cannot prove the authenticity and effectiveness of its previously drawn pie, and only makes up the numbers in the industry, then traders will scoff at it with practical actions.
Stuart Kaiser, head of US stock trading strategy at Citibank, said, "Artificial intelligence is still a big topic at the moment, but if you can't prove your results, you'll get hurt. Just talking about AI 15 times (in financial reports meetings) is no longer feasible."
More than half of AI concept stocks are falling?
Citigroup strategists point out that although about 60% of stocks in the S&P 500 index have risen this year, more than half of the AI Winners Basket index compiled by the bank has experienced a decline this year.
This index is based on the list of AI companies that caused the greatest sensation among the bank's clients last year. In 2023, more than three-quarters of the companies in the AI basket index saw an increase in stock prices.
Investment funds attempting to select AI beneficiary stocks on a large scale have also encountered similar experiences as mentioned above.
BlackRock's Robotics and Artificial Intelligence ETF, Jingshun's Artificial Intelligence and Next Generation Software Fund, and First Trust's NASDAQ Artificial Intelligence and Robotics ETF have all seen more than half of individual stocks decline this year.
Mona Mahajan, Senior Investment Strategist at Edward Jones, stated that investors currently place greater emphasis on the profitability of AI companies. What sets companies like Nvidia apart is that they have achieved their performance targets and presented real data.
Yuyu is no longer sufficient to make up the number
Nvidia's market value has more than doubled this year, with a current market value far exceeding $3 trillion. However, with the high demand in the industry for its AI GPU chips, its valuation is actually cheaper than this time last year, measured by its P/E ratio over the past 12 months.
In contrast, Salesforce、Snowflake、 Technology companies such as Intel and Adobe, which have failed to truly fulfill their promises, have seen a significant decline after a strong rise in 2023- despite their current market value being much smaller than Nvidia.
Kaiser from Citibank said, "In the financial reporting season, the threshold for technology stocks to cross is quite high. If you fail to meet the expected performance threshold, you will be severely hit."
Kaiser used Salesforce as an example to say that after releasing disappointing quarterly performance last month, the company experienced its worst single day decline in 20 years.
In fact, this has also triggered the debate on whether there is a foam in a large number of AI shares in the industry. Although some people regard the current transformation as a sign of rational regression, Rob Arnott, chairman of Research Associates, an asset management company, said that the rise related to AI "is still a typical foam in my view".
He pointed out that "one of the characteristics of a typical foam is that before large companies start to suffer setbacks, you will indeed see small companies fail first."
Arnott emphasized his belief in the long-term impact of artificial intelligence, but he said that many benefits actually take time to gradually manifest, and the current market pricing is too urgent.