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Editor’s Note: Nvidia CEO Jensen Huang says this new breakthrough “is reaching an inflection point.” That’s why the company is investing in 3 undiscovered stocks.
Go here for the full story – and step-by-step instructions.
Nvidia is doing a lot of the heavy lifting in the stock market right now.
The S&P 500 has climbed about 23% since its March 30 low. Nvidia (Nasdaq: NVDA) alone accounts for 13% of that gain, according to Nomura.
It’s not alone.
Just 10 stocks are responsible for 70% of the S&P 500’s gains since March 30. The other 490 companies in the index added up to the remaining 30%.
Here are the 10 biggest contributors to the rally – with percentages representing their contribution to the index gains.
Nvidia is making a huge $1 billion investment in new quantum computers. Plus, the firm is investing directly in 3 new quantum stocks. Get my #1 stock right here.
Notice the pattern. Five of the 10 are semiconductor companies. The rest are the tech giants spending hundreds of billions on AI data centers.
These aren’t speculative bets. The AI buildout is producing real revenue. Nvidia just reported $96.2 billion in sales for a single quarter.
These 10 companies now make up roughly 40% of the entire S&P 500. Nvidia alone is about 8% of the index.
Here’s the takeaway. If you don’t have a healthy exposure to these stocks, there’s a good chance your portfolio is lagging the market.
I see two ways to handle that.
Option #1: own the broad market. An S&P 500 index fund gives you automatic exposure to the biggest winners. About 40 cents of every dollar goes into these 10 names.
Option #2: pick the right stocks. This means making sure you have significant exposure to the right leaders. A portfolio that skipped Nvidia, Micron and Microsoft has had a very hard time keeping up this year.
Personally, I own sizable positions in Nvidia, Micron, Apple, Microsoft and Amazon. These are long-term holdings, not quick trades.
The market is rewarding the companies building and powering artificial intelligence. I expect that to continue in the coming years.
Here’s the best part.
Stocks like Nvidia and Micron are downright cheap based upon conventional valuation metrics such as price-to-earnings (P/E). Additionally, they’re growing faster than the typical S&P 500 company. That combination of faster growth and cheaper valuation is typically a setup for healthy gains.
Nvidia CEO says that a quantum computing is the next big breakthrough. The AI chipmaker is investing over $1 billion. Plus, the U.S. government is investing $2 billion.
Here’s my #1 stock to buy now.
Ian Wyatt
Editor, Daily Profit