NVIDIA in the Focus of the AI Investment Landscape: Analysts and Investors in a Field of Tension

The ongoing earnings season brings with it a sense of anticipation among investors looking at the returns on AI investments within S&P 500 companies. Analysts forecast a slowdown in earnings growth, with results expected to increase by 5.3% year-over-year—a decline from the 13.2% growth in the previous quarter, according to a report from Reuters. As anticipated, the technology and communication sectors show the strongest growth with projections of 15.4% and 12.3% respectively. The notable earnings from these companies have significantly contributed to market performance since last year. The S&P 500 itself is reaching record levels with an annual increase of approximately 21%, driven by the robust performance of the technology and communication industries. Howard Chan, CEO of Kurv Investment Management, highlights that analysts are particularly focused on the monetization of AI initiatives at large companies. Companies like Meta are showing promising developments in this area, positively impacting stock prices. On the other hand, questions arise at Google regarding how effectively the high AI expenditures can be integrated into existing business models. With a trading value of 22.3 times the estimated 12-month earnings, the S&P 500 exceeds its long-term average. Solita Marcelli from UBS Global Wealth Management expresses optimism that third-quarter results could further support stock market surges, especially as the semiconductor sector is at the center of AI investments. Special attention is given to NVIDIA, which currently ranks fifth among trending AI stocks. Despite its potential as an investment target, there are analysts who are betting on even more promising values that promise higher returns in a shorter time and are rated with a price-earnings ratio of less than five.