10 Stocks Benefiting from Nvidia's Rally
The AI topic is really hot nowadays and I can't help writing about it too. We should be thankful for the AI-led rally in the stock market because if not for them, there is probably nothing positive to look at given the presence of geopolitical tension, slowing economic growth, high inflation, and unresolved debt ceiling issues. Kinda moody. So we should be thankful the AI hype has kept the market going amidst the bad news.
Although Nvidia has captured the attention of investors, it is crucial to broaden our perspective and consider other stocks that are participating in the AI rally. Hopefully by exploring the following list, you may come across one or two investment opportunities.
I have arranged them in ascending order based on their returns over the past five days, from the lowest to the highest:
#10 Digital Realty Trust (DLR) +10%
Digital Realty, unlike chip or AI companies, operates in the real estate sector. It specializes in owning data centers and leasing out these facilities to cloud providers and other companies in need of server housing solutions. Despite not being directly involved in AI development, Digital Realty has benefited from the AI boom. Investors anticipate that the growing demand for AI will result in an increased need for servers, subsequently driving the demand for additional space within data centers.
#9 KLA Corp (KLAC) +10%
KLA Corp holds a prominent position as a leading global manufacturer of semiconductor equipment. It plays a crucial role in the production and inspection of computer chips and various electronic devices. Given Nvidia's need to meet the growing demand for its GPUs, it is anticipated that chip manufacturers like TSMC will expand production. Consequently, this expansion is expected to generate increased demand for KLA's equipment. Notably, KLA's key customers include TSMC and Samsung.
#8 Qualcomm (QCOM) +11%
With its AI 100 chip, Qualcomm has made a significant impact in the AI chip market. In the latest testing data from MLCommons, Qualcomm's chip outperformed Nvidia's flagship H100 chip in image classification and object detection tasks, showcasing superior performance in terms of server queries per watt. However, Nvidia claimed the leading position in natural language processing, a pivotal AI technology utilized in systems like chatbots, demonstrating exceptional performance and power efficiency. Nevertheless, Qualcomm's impressive performance indicates strong competition with Nvidia, and it is expected to continue competing fiercely in the market.
#7 TSMC (TSM) +12%
As a chip designer, Nvidia relies on TSMC, the world's largest semiconductor fabrication company, for the production of its high-end chips. Nvidia does not engage in chip manufacturing itself; instead, it collaborates with fabs such as TSMC for this process. Consequently, an upsurge in demand for Nvidia GPUs would directly result in an increase in orders placed with TSMC.
#6 Adobe (ADBE) +12%
Despite being less closely associated with Nvidia, Adobe recently introduced a new feature called Generative Fill in its widely-used Photoshop program. The demonstrations of this feature have been remarkable, allowing users to seamlessly expand an empty space within an image and instruct the AI to fill it without any explicit instructions. The AI intelligently blends the surroundings, resulting in a natural and cohesive composition. It is likely that Adobe is utilizing the computing power of AWS (Amazon Web Services) to facilitate the AI processes. In turn, AWS operates cloud servers equipped with Nvidia GPUs.
