You can do everything right and still get punished.
That’s especially true regarding the stock market and may be true for Nvidia, this past year’s artificial intelligence darling.
Nvidia has ridden a tsunami of interest following the successful launch of OpenAI’s ChatGPT in November 2022.
ChatGPT was so successful that it became the fastest app to eclipse one million users. Its success prompted every company worldwide to reconsider how AI could be exploited, particularly large language models that turn huge datasets into simple results.
Related: Apple stock forecasted as top AI pick before crucial rollout
The seismic interest in training and running AI models has caused a similarly seismic shift in information-technology budgets, resulting in surging demand for fast, energy-efficient equipment.
At the top of the IT-budget wish list are next-generation graphics-processing units, or GPUs — Nvidia’s wheelhouse.
Unsurprisingly, Nvidia’s sales, profit and stock price have soared, making it the third-largest company in the S&P 500.
The trouble, however, is that with each market-trouncing earnings report, the bar gets ratcheted higher, becoming tougher and tougher to overcome.
In short, the law of large numbers is working against it, and that’s a problem, according to long-time hedge-fund manager Doug Kass.
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