Capital Is Flowing Into This Tech Niche

While stocks have trended higher overall in the past few months, one part of the market has seen major interest from hedge funds and retail investors alike. That area? Artificial intelligence (AI).

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  • Companies that have been developing AI programs or otherwise moved towards servicing the growing tech niche have seen their share price rise. That’s a trend likely to continue. And it may give conservative investors some big-cap names to target.

    One of the biggest players is Nvidia (NVDA). The manufacturer of graphics cards has pushed strongly into developing products that play specifically to AI hardware needs.

    That’s allowed the company’s market cap to move even higher, with the company now bigger than Berkshire Hathaway (BRK-B). Plus, if other tech trends such as crypto mining or electric vehicles come back into favor with the market, Nvidia is well positioned to profit from those spaces as well.

    Action to take: Investors may want to buy a small stake now, but look for a dip. Shares are getting heavily overbought in the short-term and look due for a pullback in the weeks ahead.

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  • For traders, the January 2024 $400 calls, last going for about $14.50, can likely be bought closer to $10-12 in the coming weeks on such a pullback. That’s where they’ll be a worthwhile buy, with an eye towards shares trending higher after coming off their overbought levels.


    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.