To The Moon

Investors need a little patience, AI growth intact 

Last week, major tech companies like Meta, Apple, and ASML reported their earnings, and most of them performed well. Even Tesla, which had a less favourable revenue report, saw its valuation continue to rise. This is largely due to the perceived potential of AI in autonomous driving, which suggests there's still significant growth expected.

This article is written by Shernice,please hit the like button or do a repost if you like my article.

For instance, Apple's first-quarter revenue growth was down for iPhones but up significantly in services, indicating an expansion in AI and content sectors. Traditionally, China has been a major market for tech companies, but last year's Q4 showed the U.S. market surpassing China, reflecting a shift possibly due to various challenges including tariffs and competition from Chinese tech like DeepSeek.

Despite these challenges, the "Big Seven" tech companies continue to see substantial profits, leading to increased capital expenditure. This has directly benefited companies like TSMC, which holds a 62% market share in semiconductor manufacturing, pushing up prices due to high demand and limited supply increases, resulting in higher gross margins and operational profits.

The market sentiment isn't overly pessimistic nor overly optimistic; it's in a state of cautious optimism. With DeepSeek's advances, there's a noticeable trend towards a more competitive, market in AI services, where cost reductions are becoming evident. This is pushing companies to either improve their service quality or reduce prices, influencing the growth prospects of hardware stocks.

Looking forward, the real potential for AI isn't just in generative AI for business presentations or scripts but in physical AI applications like home robots,humanoid robot, self-driving cars, and cleaning robots. This shift from generative to physical AI explains why companies like Nvidia and Tesla are focal points for investors, as these technologies require high-end chips.

Nvidia's recent stock volatility, despite significant drops, suggests that the market still sees substantial growth potential in AI, as these corrections might just be temporary amidst a broader trend of AI expansion.

Moreover, as AI becomes cheaper to implement, we're moving from a zero-sum to an expanding market where more players can enter, particularly with software-based solutions now being more accessible.

The latest from Tesla, particularly their 'This Robot Sucks' video, showcases their move into robotics, hinting at a future where physical AI might redefine business models, operating 24/7.

However, there are risks, especially with potential U.S. policy changes under Trump administration that might further restrict chip exports to China, impacting companies like Nvidia, which are already navigating around existing export controls. Singapore, with its unique position in global trade, serves as a potential loophole but also a risk area due to its ties with Chinese investments.

In summary, while the immediate market reactions might be attributed to competitors like DeepSeek or tariff concerns, the deeper story is about the ongoing evolution from generative to physical AI, the implications of U.S. policy on technology exports, and the strategic positioning of companies in this dynamic landscape. I continue to be optimistic about AI-related stocks while shifting focus toward physical AI. The growth potential is immense—far greater than most can envision.

$NVIDIA Corp(NVDA)$ $Tesla Motors(TSLA)$ $Meta Platforms, Inc.(META)$ $SoundHound AI Inc(SOUN)$ $Cerence Inc.(CRNC)$  

@TigerStars  @TigerObserver  @TigerPM  @Daily_Discussion  @Tiger_comments