Natalie Pace. bestselling author of The Gratitude Game, The ABCs of Money & Put Your Money Where Your Heart is. Co-creator of the Earth Gratitude Project.
Menu

Natalie Pace Blogs

Picture
Photo of Natalie Pace by Marie Commiskey. Avalon Photography.
Picture
Picture
Picture
Picture
Picture

AI is On Fire. Is it Time for S’More?

28/1/2020

 
Picture
Lexus RX450h retrofitted by Google for its driverless car fleet. Photo by Steve Jurvetson. Derivative Work: Mariordo. Wiki Commons. Used with permission.
AI is On Fire. Is it Time for S’More?
Or Will the General Marketplace Drag Everything Down?
 
Artificial intelligence and machine learning are affecting all parts of our lives, from autonomous vehicles, to the way that social networks decide which ads we see, and how law enforcement tracks down criminals. The industry is on fire. Should you buy in?
 
Advanced Micro Devices just announced 4Q 2019 earnings, with revenue of $2.1 billion, which is up 50% year over year from 2018’s $1.42 billion. Net income was also impressive at $170 million, versus $38 million in the 4th quarter of 2018. Nvidia is projecting revenue growth of about 34%, when the company announces earnings around Feb. 21, 2020.
 
AMD announced earnings after the markets closed. Investors responded by selling off. The share price dropped 4.12% in after-hours trading today. Hmmm. Why are investors getting cold feet over one of the hottest companies and industries on the street? This is where AI has something in common with cannabis 2018. It’s got a lot to do with valuation, and less to do with quarter by quarter fluctuation. AMD announced that the next quarter will have $1.8 billion in revenue, which represents year over year growth of 42%, but is a sequential drop of about 15%. AMD explains the sequential drop as seasonality and the calm before the next gen product release. By comparison, Apple announced revenue for the last quarter of $91.8 billion, and forecasts that the next quarter revenue will be $63-$67 billion. That’s a 27% sequential drop!
 
If customers like Dell, IBM, Nokia and others are choosing an AMD competitor, and the sequential drop is an indication that AMD is falling behind the pack, then it’s understandable that investors would opt out. However, investors are far more likely to get skittish if they are “out over their skis.” If you worry that you might have overpaid to begin with, or that your recent windfall might evanesce, then you’re more likely to bail out with as much as you can as quickly as possible. Should a company with full year income of $341 million be worth $56 billion, with a price to earnings ratio of 245? (The historical average price to earnings ratio is about 17.) Nvidia’s price to earnings ratio is 68.
 
Artificial intelligence is definitely an industry of tomorrow, something that is reflected in our daily lives and in the revenue growth. The question is only one of price. You could have purchased Nvidia for $131/share last May. Should you be jumping in today for $250/share? AMD has more than doubled, to $52 from $19. However, can the AMD share price remain high if the general marketplace weakens? That’s another headwind that investors have to factor in.
 
4Q 2019 U.S. GDP
Tomorrow, the Federal Reserve Board will release their statement on the economy. The governors are widely predicted to hold rates where they are.
 
On Thursday, January 30, 2020, at 8:30 am ET, the Bureau of Economic Analysis will release the advance estimate of the 4th quarter U.S. GDP growth. Projections are coming in at 1.2-1.8%. That’s a very weak showing, which is likely why the Dow Jones Industrial Average is down 651 points since the high set on January 17, 2020. Stock futures are down, predicting a slight sell-off again tomorrow.
 
In the late stage of the business cycle, even with one of the hottest industries in the world, price matters.
 
Incidentally, I did find one AI company, which is trading near its 52-week low, that is partnered with Microsoft on face recognition.
 
Join me at my Stock Master Class Feb. 7, 2020 and my Investor Educational Retreat from Feb. 8-10, 2020 in Cocoa Beach, Florida to learn essential tips for increasing your trading success, to adopt time-proven strategies for protecting your future, and assets and even to discover how to save thousands annually in your budget with smarter big-ticket choices. Call 310-430-2397 or email [email protected] to learn more.
 
 
 
 
 
Picture
Picture
Picture
Picture

Other Blogs of Interest
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate 
Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains
, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Comments are closed.

    Author

    Natalie Pace is the co-creator of the Earth  Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.

    Archives

    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    June 2016

    Categories

    All

    RSS Feed

Proudly powered by Weebly
Photo from Alex Proimos
  • Store
  • Blog
  • Privacy Policy
  • About Natalie Pace
  • Books by Natalie Pace.
  • Vision Mission Goals
  • Media Images
  • Natalie Pace Coaching Calendar
  • Calendar of Events
  • Restormel Retreat 2027
  • Wealth Secrets of the 1% Fireside Seminar
  • Real Estate Master Class
  • Natalie Pace Oct. 11-13, 2025 Financial Freedom Retreat. Online.
  • Bond Master Class 2025
  • Rebalancing Master Class Jan. 18, 2025
  • Stock Master Class 2025
  • Options for Beginners Master Class
  • Sustainability Summit
  • Restormel Retreat 2025
  • Store
  • Blog
  • Privacy Policy
  • About Natalie Pace
  • Books by Natalie Pace.
  • Vision Mission Goals
  • Media Images
  • Natalie Pace Coaching Calendar
  • Calendar of Events
  • Restormel Retreat 2027
  • Wealth Secrets of the 1% Fireside Seminar
  • Real Estate Master Class
  • Natalie Pace Oct. 11-13, 2025 Financial Freedom Retreat. Online.
  • Bond Master Class 2025
  • Rebalancing Master Class Jan. 18, 2025
  • Stock Master Class 2025
  • Options for Beginners Master Class
  • Sustainability Summit
  • Restormel Retreat 2025