AI Tipping Point

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By Matthew Gutierrez and Shawn O'Malley · February 22, 2024

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New ATHs. Tech stocks are flying. Retirement accounts are sitting pretty.

Thank you, Nvidia.

The S&P 500 hit another fresh record high today, and the Nasdaq posted its best day (+2.96%!) in over a year after Nvidia’s blockbuster earnings.

In Japan, Nvidia’s results helped the Nikkei stock average surpass its 1989 all-time high. It’s Nvidia’s market right now, and we’re all witnesses.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the three biggest stories in markets:

• Nvidia sales reach new heights
• Breaking down the latest Fed minutes
• Kenya cracks down on access to crypto exchanges

All this, and more, in just 5 minutes to read.

Pop Quiz

As we cover below, Nvidia’s stock has been on a whirlwind rally after consistently crushing earnings expectations, thanks to the AI boom. What’s the company’s market share in the AI computer chip market? (The answer is at the bottom of this newsletter)

Chart of the Day

In The News

?? Nvidia Sales Soar as Company Forecasts Bigger AI Boom

“The most important stock on planet Earth,” that’s what Wall Street has to say about Nvidia, which keeps going up.

The computer chip giant posted bumper earnings that crushed Wall Street estimates (again), driven by excitement over artificial intelligence — Its chips train the huge AI models developed by places like Microsoft and Meta.

The low-down:

• Nvidia posted revenue of $22.1 billion for its fourth quarter, a 265% jump. Net income surged 769%.
• Its data center division, now its largest source of sales, generated $18.4 billion of revenue, up 409% from the same period a year earlier. Gaming chips provided $2.87 billion of sales.
• The company’s shares jumped 15% to a new all-time high, adding to its 60%-plus rally in 2024, 275% rally over the past 12 months, and its 1,850% rally over the past five years, making CEO Jensen Huang a very wealthy man, alongside many retail investors, too.?

More to come? Huang sees no signs of slowing down, forecasting revenue to hit $24 billion this quarter, way ahead of estimates.?

• “Fundamentally, the conditions are excellent for continued growth” in 2025 and beyond, Huang told analysts.
• Huang described AI as hitting “the tipping point” and indicated demand for the computing power that underlies AI remained astronomical. “Demand is surging worldwide across companies, industries, and nations.”

Why it matters:

Nvidia has quickly become one of the world’s most valuable companies and one of the market’s most important stocks. Its stellar earnings report once again...