Will the Nvidia bubble pop?

Good morning, and happy FRY-nancial FRY-day! In this special, weekly edition of FryAI, we explore the latest in AI and finance—let’s dive in. 💰

*None of what we offer is investment advice. Our aim is to report the latest happenings and teach you how to use the newest AI finance tools.*

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NVIDIA REACHES #1 🥇

Will Nvidia pop? In short, it’s not likely. 🦾

What’s going on? Nvidia has passed Microsoft to become the world’s most valuable company, with its share price reaching an all-time high this week.

What’s driving Nvidia’s growth? Valued at over $3.3 trillion, Nvidia’s stock has nearly doubled since the start of the year. The company’s success is driven by its leading role in producing chips crucial for AI development, which are being hailed as the “new gold or oil in the tech sector.” In this way, Nvidia is not necessarily overvalued—it’s just powering one of the biggest tech advancements of all time.

Will Nvidia slow down? Specialized computer chips are the gas that fuels AI development, and Nvidia occupies over 80% of that market. This means that as long as AI development continues, Nvidia will reflect that growth. The only way Nvidia will get derailed is if another company, like AMD or IBM, massively steps up in chip production. However, Nvidia is currently miles ahead of its competitors in terms of speed, storage, and partnerships. Additionally, its recent commitment to release new chips every year means it’s going to be very difficult for competitors to catch up and capture any significant market share from the giant.

THIS WEEK’S DIAMOND IN THE ROUGH 💎

Nvidia and Microsoft get all the love, but many smaller AI companies are flourishing beneath the surface. 📈

This week’s diamond in the rough: This week’s diamond in the rough is Palantir Technologies (PLTR).

How is AI helping PLTR? Palantir’s reliable machine learning tools extract valuable insights from diverse data sources in real time, earning the company the trust of the U.S. military and other government agencies. On May 30, Palantir secured a contract with an initial $153 million order, potentially expanding to $480 million, to deploy its AI operating system across the Department of Defense. Palantir’s Artificial Intelligence Platform (AIP) is also gaining traction with private enterprises. Tampa General Hospital, for example, credits AIP with reducing patient placement times by 83%, allowing for more efficient care.

Want some numbers? Palantir’s real-world applications are driving significant growth. For instance, Palantir’s revenue soared 21% year-over-year to $634 million in Q1, with U.S. commercial clients up 69%. Net income also reached $106 million, marking six consecutive profitable quarters. This has led to a ~50% rise in stock value since the beginning of 2024. This pattern is likely to continue as the company looks for expansion opportunities. As a result, analysts are predicting over 85% annual profit growth for the next five years.

HOW ARE THE MAGNIFICENT 7 DOING? 📈

AN AI FINANCIAL ASSISTANT WITH PERSONALITY 🦾

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How does it work? Cleo functions through an AI-powered app that links to your bank. After signing up, you will be able to chat with Cleo (an AI chatbot) about your finances. You can ask questions such as, “How can I save money?” or, “How much have I spent on food this week?” You can also command Cleo to do things such as, “Yell at me if I spend money on McDonald’s.” For a fun twist, Cleo includes both “Roast Mode” and “Hype Mode” which makes fun of your spending habits and praises your money management, respectively. The app also has cool features such as the “Swear Jar,” where you can fine yourself for spending money on things you want to avoid and the “Smart Save” feature, which can help you save money automatically.

What about privacy? Cleo never stores your bank login details (they are protected with encryption), does not have access to move your cash through “read-only mode”, and never sells your data to third parties.

FRY-AI FANATIC OF THE WEEK 🍟

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