What Investors Are Getting Wrong About Apple and Microsoft

Today’s tech stock market is no country for unthinking investors. A bunch of stocks—among them Alphabet and Amazon—have gone nowhere amid the market gyrations of the past two years, while others such as Apple have seen OK but not great performance. That adjective can really only be applied to Nvidia, which has soared this year thanks to its market-cornering position in specialized artificial intelligence chips. The stock has appreciated 62% since mid-November of 2021 when stocks peaked, a period that includes the impact of last year’s broadly based stock correction. In comparison, Apple stock has gone up 25% in the same time frame, Microsoft has gone up 11% and Alphabet has dropped 11%.

Investors seem to be treating Nvidia as one of the few public market proxies for the new generative AI technology. That’s understandable given how much its business has obviously benefited—revenue doubled in the second quarter, and Nvidia projected it would rise 170% in the third quarter, which it reports next week. And just in case you thought Nvidia was resting on its laurels, the company today announced its latest AI chip, the H200, which will have much more memory capacity than the existing, much-sought-after H100 (who knew names of chips would roll off the tongue like this?). For more, see here.