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Although momentum traders are riding on the potential artificial intelligence sector through speculation, investors should watch the mega capitalization firms instead.
Day traders sent quantum computing firm Rigetti Computing (RGTI) shares higher. Conversely, Faraday Future (FFIE) added “ai” to its name, sending the stock up by 51.85%.
Neither quantum computing firms nor firms with operating losses are long-term winners.
Instead, investors are betting that Nvidia (NVDA) will sustain its growth. NVDA stock gained 2.99% to close at $138.31 on Thursday. The stock rose after BofA retained Nvidia stock on its “top pick” list. Next week, the annual CES – Consumer Electronics Show – will showcase Nvidia’s newest AI server chips. The firm will also announce PC gaming graphics cards. The RTX 50 GPU series faces no competition from either Intel (INTC) or Advanced Micro Devices (AMD).
Last year, AMD bowed out of the high-end GPU market. Conversely, Intel will underprice its budget GPU by $50. This could take on Nvidia’s market share in the coming years.
Apple (AAPL) fell by 2.62%, erasing the $240 to $260 rally achieved last month. The firm finally received an analyst downgrade. UBS cut its iPhone sales forecast. It believes soft iPhone sell-throughs will result in an 8% Y/Y drop in unit sales. UBS analyst David Vogt set a price target of $236. AAPL stock closed at $243.85.
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