Contrary to traditional investment advice, riding the momentum of red-hot stocks may not be as treacherous as it seems. While many value investors shy away from stocks experiencing rapid surges in price, such upward movements can often be justified by improving fundamentals and earnings growth. It’s a classic case of not judging a book by its cover.
Nvidia (NVDA)
After a stellar quarter, some may argue that Nvidia (NASDAQ:NVDA) is on a path to glory rather than a bubble. Despite skeptics labeling it as overvalued, Nvidia’s preparation for a chip demand surge suggests otherwise. The recent bounce-back in stock prices hints at a strong buying opportunity, with sights set on the $1,000 mark. The stock, trading at 36.1 times forward price-to-earnings (P/E), seems undervalued considering its growth prospects.
With collaborations with tech giants fueling growth, Nvidia’s bullish run shows no signs of slowing down. Jumping on the NVDA bandwagon now might just be the smart move, as long as short-term drops won’t scare you off.
Amazon (AMZN)
Another tech behemoth, Amazon (NASDAQ:AMZN), is seizing the opportunities presented by the AI market boom. With shares hitting all-time highs, Amazon’s strategic investments and emphasis on AI technologies show promise. While treading a path similar to its cloud competitors, Amazon’s aggressive AI spending sets it apart.
CEO Andy Jassy’s commitment to disruptive innovation and cost management bodes well for the company’s future. Betting against Amazon, especially with its stock soaring to new heights, might not be the wisest choice.
Apple (AAPL)
Never underestimate Apple (NASDAQ:AAPL) and its penchant for innovation in the rapidly evolving AI-centric tech landscape. The revelation of an AI-focused M4 chip propelling the stock to $175 per share underscores Apple’s game-changing potential in the Mac business.
Apple’s foray into AI GPUs and potential future AI-based services puts it in a league of its own. Trading at just 27.2 times trailing price-to-earnings, AAPL remains a solid investment choice with vast growth opportunities on the horizon.
On the date of publication, Joey Frenette owned shares of Apple and Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joey Frenette is a seasoned investment writer with a keen eye for technology and consumer stocks, contributing to various reputable financial publications.
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