Montreal Forex Clubs: Networking For Financial Prosperity – After a major correction in tech stocks in 2022, the tech sector rebounded strongly in 2023 with the help of artificial intelligence (AI), triggered by the popularity of ChatGPT, healthy competition and future AI plans of many tech giant stocks, pushing up stock prices of tech stocks and Even the entire US stock indices (S&P500 and Nasdaq), are close to last highs in late 2021.

As noted in an earlier Dr. T article, the golden cross of inflation (now at 5%) below interest rates (now at 5%) helps support the recovery of technology stocks sensitive to interest rates (likely to peak soon). Since the stock market is usually 6-12 months ahead of the economy and business, a smart investor can take calculated risks with early moves (eg, big winners for those who moved into tech stocks 6 months ago when inflation starts to decline from peaks). .

Montreal Forex Clubs: Networking For Financial Prosperity

Montreal Forex Clubs: Networking For Financial Prosperity

Investing and trading stocks can be AI-applied (ie following certain rules) but the key difference is personalizing strategies, such as short-term (momentum trading), medium-term (cyclical trading) or long-term (growth investing).

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Dr. T shortlisted 8 AI stocks with trading and investment potential, different LOFTP (Level/Optimism/Fundamental/Technical/Personal Analysis): Each stock requires unique position:

Nvidia is a big winner in the AI ​​game because development generative AI requires strong demand for GPU chips, which is dominated by Nvidia. It projects significant revenue growth in the near future that supports the share price to surpass its last peak of $335 in 2021, which is up 50% year to date from $460.

Even before the recent AI stock rally, Nvidia already had strong business fundamentals to sustain. However, since the stock is priced well above fair value with high optimism, it is more suitable for short-term momentum trading following uptrend prices (ie, entering when breaking a new high, but setting stops when prices are trending is crucial. Risk Tolerance more opposite than level).

Microsoft is another direct AI winner as it is the main investor for ChatGPT, even including the BING search engine (challenging Google search) and Microsoft Office products on the Windows 11 platform. As a result, Microsoft’s share price has returned to its 2021 peak of $344, potentially hitting another new all-time high if AI momentum continues.

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Microsoft is a veteran tech giant stock (comparable to Apple) with more than 50 years of history since the 1970s, with products diversified beyond traditional PCs into cloud and gaming. Strong business fundamentals but priced above fair value with high optimism, more suitable for mid-term cyclical investing (Buy Low Sell High) or short-term momentum trading (Buy High Sell High).

Alphabet was an early AI developer (e.g., DeepMind became the world’s No. 1 Go player with AlphaGo) but has been slow to commercialize AI products, still focusing more on Google’s search engine, which has an 85% market share (compared to BING’s only 8). ) for advertising revenue (YouTube contributes about 10% of Alphabet’s revenue). ChatGPT’s rapid success has led Google to quickly launch a comparable BARD Chat to complement Google Search. It’s not too late for BARD to catch up as they have a strong foundation in developing the extensive Google network as potential customers, only to focus on future marketing and commercialization by helping to retain or grow online advertising revenue.

Relative to other tech / AI giant stocks, Alphabet / Google stock has been relatively slow in price recovery (still below its peak of $150 in 2021), current price is close to fair value of $124, so can still be considered a long-term growth investment for term investors. (Buy and hold at fair value). At the same time, Alphabet/Google may also be suitable for medium-term cyclical investing (Buy Low Sell High) or short-term momentum trading (Buy High Sell High). This is a rare giant stock that can be considered for both long term investors and short/medium term traders. However, since some technology giant stocks can last for decades, it is crucial for long-term investors to monitor the technological advantages of competitors (such as ChatGPT vs. BARD, Google vs. BING, etc.).

Montreal Forex Clubs: Networking For Financial Prosperity

Meta’s share price was severely revised from around $380 to $90 in 2022, partly due to ventures into the unprofitable Metaverse and then due to tech sector headwinds. Meta is the early winner for tech stock recovery in 2023 (the other is Netflix), growing at a very strong pace (comparable to Nvidia and Microsoft performance), with the current price of $313 still below the 2021 high of $380.

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Even without AI (new plan) or Metaverse (old plan), existing Facebook and Instagram ad revenue can already support and grow the business. The new Threads app could be a strong challenger to Twitter, a future revenue generator, expanding its social media network (a powerful economic moat). Meta shares are still priced below the fair value of around $360, which can be considered for long-term growth investors and short-term momentum traders.

Amazon’s share price halved from around $187 to $85 in 2022, partly due to high growth during the pandemic not being sustainable in the post-pandemic period, the business also becoming cyclical, affecting share price stability. Amazon’s cloud business, AI concepts have helped its share price recover along with other tech giant stocks, with a current price of $134 still below a 2021 peak of $187.

Amazon is a trillion-dollar market cap giant stock (after Apple and Microsoft, ahead of Google and Nvidia), making the business more sustainable pre-pandemic. Current shares are still below fair value around $200, so can be considered for long-term growth investing, medium-term cyclical trading or even short-term momentum trading.

AMD shares fell from around $155 to $55 in 2022 as the technology sector crunches, partly due to unsustainable high demand for chips in the post-pandemic period, with the business even suffering a loss in the last quarter. In the past few decades of competition, AMD is stronger and bigger than Intel, supporting an 80-fold increase in AMD share price over the past 10 years. Although AMD AI chips are still behind leader Nvidia, its latest chips are widely used by cloud platforms (such as Amazon). AMD prices have recovered strongly, with the current price of $115 still below the 2021 high of $155.

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AMD is a young tech giant stock that will benefit from the expansion of the AI ​​sector in the future. Current shares are still below fair value around $200, so can be considered for long-term growth investing, medium-term cyclical trading or even short-term momentum trading.

TSMC shares were more than halved from around $140 to $63 in the 2022 tech sector crisis, partly due to higher demand for chips during the pandemic being unsustainable post-pandemic, but the business remains profitable with a more sustainable growth rate. TSMC is the world leader in high-end chip production (eg 3nm), far ahead of competitors Samsung and Intel. With the help of Warren Buffett (although he eventually sold it due to geopolitical crisis concerns) and a rally in the tech sector, TSMC prices have recovered strongly, with the current price of $105 still below the 2022 peak of $140.

The semiconductor sector is cyclical in nature, similar to TSMC’s share price, making selling low to buying high more suitable for cyclical investors. The current share price is higher than the fair value of around $80, so is more suitable for medium-term cyclical investing (rather than long-term due to higher optimism) or even short-term trading (as the momentum is relatively weak, one can consider buying low sell high with short. Term Swing Trading ).

Montreal Forex Clubs: Networking For Financial Prosperity

The semiconductor sector is highly specialized and interdependent, viz. Design by Nvidia, manufacture by TSMC but leading equipment supplier is ASML, etc. ASML’s business and even share price performance is comparable to TSMC because the two are closely related.

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ASML’s share price was more than halved to $379 from around $868 in 2022, partly due to high demand for chips during the pandemic being unsustainable post-pandemic, but the business remains profitable with a more sustainable growth rate. ASML is the world’s leading chip tool (eg, lithography for 3nm), far ahead of other competitors. The US/China trade war could affect its future business expansion in China due to new export bans for high-tech semiconductor equipment. Along with the rally in the tech sector, ASML prices have doubled from the valley, with the current price of $750 approaching the 2022 high of $868.

As the semiconductor sector is cyclical in nature, similar to ASML share prices, selling low is more suitable for buying high for cyclical investors. The current share price is above the fair value of around $470, so more suitable for mid-term cyclical investment (rather than long-term due to higher optimism) or even short-term trading (as the momentum is relatively weak, one can consider buying low sell high with short .term swing trading).

There are over 2000 giant stocks in the world based on Dr. T criteria, the choice of 10 Dream Team giant stocks should align with one’s unique personality, ie.

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