Nvidia, artificial intelligence, AI
You can tell that the artificial intelligence hype is dying down and investors have begun taking a more realistic approach to this cycle’s “next big thing” because the stocks in AI-related matters are down trending. Now that everyone understands most of the basics and can tell you what “AI hallucinates” means, the level of excitement seems to be waning.
Those companies at the center of the technology and which have benefitted greatly from the initial enthusiasm are no longer hitting the higher highs that just months ago seemed inevitable. It’s probably not the case that extraordinary growth in the sector is completely over. What’s more likely, judging from the direction of trend in these stocks, is the feeling on Wall Street that “well, let’s see how it develops from here” is now in charge.
These 5 AI-Related Stocks Are Trending Lower.
Nvidia (NASDAQ: NVDA).
NVIDIA daily price chart, 8 31 24.
The expectation this week for incredible, spectacular blow-out earnings was not quite met and the AI-chip designer failed to make a new high. Not even close, really. Instead, the stock ended the week with two closes below the 50-day moving average. You can see that the July and August highs came in below the June peak. This is a picture of how AI enthusiasm is fading. The 200-day moving average continues to trend upward, so there’s that.
Super Micro Computer (NASDAQ: SMCI).
Super Micro Computer daily price chart, 8 31 23.
This computer hardware manufacturer, highly focused on artificial intelligence development, peaked at $1200 in March and now goes for $437, a drop of 64% from the top to the present. The company’s delay in filing an annual report is detailed here: Super Micro (SMCI) Plummets Over 20% After Filing Delay, Hindenburg Report (forbes.com). The 50-day moving average is about to cross below the 200-day moving average, a new price chart look for an AI stock.
Advanced Micro Devices (NASDAQ: AMD).
Advanced Micro Devices daily price chart, 8 31 24.
“Enabling the next generation of AI models” is the description of the semiconductor maker’s work on the company website. Judging by the price chart, such an enablement is not as stirring as it once was: the stock peaked in early March with a much lower attempted high in early July and now a bounce off of the August low. Note that the 50-day moving average has crossed below the 200-day moving average just two weeks ago.
C3.ai (NASDAQ: AI).
C3.ai daily price chart, 8 31 24.
The stock with “.ai” in its very name is headed in the wrong direction and has been since that late February peak of $38. Now trading at $23, that’s a slide in price of 34% over the last six months. The red-dashed line that connects the February high with the June and July lower highs demonstrates the “down” part of down trending. That the early August low came in at higher than the mid-April low may be a hopeful sign, who knows?
Baidu
iShares US Utilities ETF
Baidu daily price chart, 8 31 24.
This internet leader with headquarters in Beijing is known as the first Chinese-based company to participate in the Partnership on AI (PAI) which included Apple and Amazon, among others. Baidu dropped to a new 2024 low in early August. Take a look at the relentless downward tilt of the 200-day moving average and the stock’s inability to close above it all year.
No artificial intelligence was used in the writing of this piece.
More analysis and commentary at johnnavin.substack.com.
