Expert says AI investing is essential, but be more 'judicious' about it. Picture Getty
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Local shares are set to open higher this morning as Wall Street rose on the back of Nvidia’s forecast. At 8am AEST, the ASX 200 index futures was pointing up by +0.3%.
Overnight, the S&P 500 climbed by +1%, blue chips Dow Jones by +0.54%, and tech heavy Nasdaq by +1.59%.
The much anticipated report from Nvidia didn’t disappoint as the company said sales would come in at $US16 billion for the quarter, versus analyst’s estimates of just $US12.5 billion.
Nvidia’s share price rose 3%, and jumped another 7% post-hours after approving an additional US$25 billion in buybacks.
“There’s been an ongoing debate on whether Nvidia is even more important to the broad trajectory of markets than Fed Chair Powell’s comments from Jackson Hole on Friday,” said Quincy Krosby, chief global strategist at LPL Financial.
Now read: Just Broken: An hour ago Nvidia smashed Wall St’s imagination about money and semiconducting
In other stock news, Foot Locker sank almost 30% after the company cut its forecast, citing price sensitive consumers. Abercrombie & Fitch Co however surged 23% as its full year earnings smashed estimates.
Meanwhile, data showed that American business activities have been stagnant, while US mortgage applications have tumbled to an almost three-decade low.
Elsewhere, Wagner mercenary chief Yevgeny Prigozhin, who led an abortive mutiny in Russia two months ago, was apparently killed in a private jet crash as he flew from Moscow to St Petersburg.
Back home, earnings season continues on the ASX, and today’s reporting schedule includes Qantas (ASX:QAN), Whitehaven (ASX:WHC), Star Group (ASX:SGR), Tabcorp (ASX:TAH), and The Reject Shop (ASX:TRS).
All investors should definitely consider Artificial Intelligence (AI) exposure, said Nigel Green, CEO of the world’s largest independent financial advisory, de Vere Group.
Green warns, however, that as the volume is getting louder, and the frenzy is reaching fever pitch regarding Nvidia and other so-called ‘Magnificent Seven’ tech stocks (Apple, Microsoft, Amazon, Meta, Tesla and Alphabet), the heat needs to be taken down a gear.
“This level of hype is dangerous as it could lead investors to assume that these stocks are a silver bullet to build long-term wealth – and they are not, at least not on their own,” he warns.
“These stocks are incredibly important, of course, but they’re not a panacea. I fear some investors will get burned unless some of the frenzy is turned down.”
Green says diversification is, as ever, investors’ best tool for long-term financial success.
“As a strategy, diversification has been proven to reduce risk, smooth-out volatility, exploit differing market conditions, maximise long-term returns and protect against unforeseen external events.”
That said, Green remains bullish on AI-orientated investments as part of the mix.
“Including AI exposure in investment portfolios isn’t just a trend – it’s a strategic move that aligns with the future of innovation and economic growth. Just do it judiciously.”
Gold rose by over 1% overnight as it moved higher above US$19k to US$1,916.97 an ounce.
Bitcoin jumped 2.5% in the last 24 hours to US$26,400, amid hopes the Fed will pause raising rates.
“Almost 90% of short-term holders of Bitcoins, less than 155 days, are suffering unrealised losses, which often correlates with selling pressure,” said Ilan Solot, co-head of digital assets at Marex Solutions.
The Aussie dollar has climbed back a little, now trading at US64.80c.
Brent crude has fallen around 1%, trading now at US$82.97 a barrel.
Oil prices have been falling as overall sentiment floundered amid China’s economic woes.
Iron ore 62% fe gained +0.7% to US$107.47/tonne.
The Reject Shop (ASX:TRS)
For the full year, sales were $819.3 million, up 5.8% on the pcp. Statutory NPAT was $10.3 million, up 63.4% on the pcp. TRS declared fully franked dividend of 16 cents per share, versus nil in pcp. The company said customers continue to gravitate towards low-priced consumables as cost-of living pressures increase.
Brookside Energy (ASX:BRK)
Commercial production has been established in the Juanita Well, comingled from two separate sands in the highly productive Simpson Group. Production averaged 112 Barrels of Oil Per Day (BOPD) as it cleans up, with an initial peak rate of 130 BOPD.
IperionX (ASX:IPX)
The metals tech company announced that it has won the prestigious R&D 100 award for its innovative Hydrogen Assisted Metallothermic Reduction (HAMR) titanium production process. IperionX and the inventor of the technology, Dr Zak Fang, have been recognised for HAMR – a low cost and sustainable process for producing titanium metal powder used for both additive manufacturing and traditional powder metallurgy manufacturing methods.
Veem (ASX:VEE)
The marine propulsion manufacturer says revenue for the year was $59.6m, up 10% on FY22. EBITDA and NPAT were $10m and $4.1m, up 64% and 226% respectively on FY22. Veem has invested over $9.6m in capital and development expenditure during FY23, including three machining centres and associated equipment.
Acusensus (ASX:ACE)
The traffic safety company said revenue for the full year increased 46% to $42m. NPAT was $0.4m, versus $0.5m in pcp. The company said it has exceeded its IPO prospectus forecasts, after securing approximately $40m in new contracts or variations to existing ones over the past year.
At Stockhead we tell it like it is. While IperionX is a Stockhead advertiser, it did not sponsor this article.
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