Key Insights on 3 US Growth Stocks

Overview

Welcome to Lifevest’s Newsletter – Build Wealth Protect Wealth

2024 May has been a busy month with the release of the latest quarterly earnings and business updates from a host of US companies.

We took the liberty of selecting the most relevant news bits and summarising them here in case you missed them. For this month, we are featuring several popular US growth stocks.

These stocks are moving the US market and pushing the NASDAQ Composite Index to a new record high.

Meanwhile, the US Federal Reserve also provided its latest hints on whether it intends to cut interest rates or leave them “higher for longer”.

1. Nvidia: Powering the Future of AI and Accelerated Computing

Nvidia released another set of blowout earnings for its first quarter of fiscal 2025 (1Q FY2025) ending 28 April 2024. Revenue hit US$26 billion, a record high and more than tripling year on year. Operating profit came in at US$16.9 billion, up 690% year on year from US$2.1 billion a year ago. Net profit stood at US$14.8 billion, up more than sevenfold year on year. Free cash flow leapt more than fivefold year on year from US$2.7 billion to US$15 billion.

In the realm of technology, few companies have made as significant an impact as Nvidia. Under the visionary leadership of CEO Jensen Huang, Nvidia is not just keeping pace with technological advancements; it's setting the pace. The company's strategic partnerships with nations and corporations are catalyzing a paradigm shift towards accelerated computing, with the establishment of AI factories poised to produce the next global commodity: artificial intelligence. 

The introduction of Nvidia's Blackwell platform marks a pivotal moment in the company's trajectory. This cutting-edge technology is not merely an incremental improvement; it's the bedrock upon which the future of generative AI will be built. With Blackwell in full production, Nvidia stands on the cusp of a growth wave that promises to redefine the industry.

Reflecting its robust financial health and confidence in future growth, Nvidia has announced a 10-for-1 stock split, set to take effect on June 7, 2024. This move is designed to make Nvidia's stock more accessible to a broader range of investors, democratizing the opportunity to share in the company's success.

In a bold move underscoring its financial strength, Nvidia has increased its quarterly dividend by a staggering 150% year-over-year to US$0.01 on a post-split basis. This increase is a testament to the company's solid performance and its commitment to delivering value to its shareholders.

Nvidia's accelerated computing ecosystem is a magnet for innovation, attracting a burgeoning community of developers and AI startups. Since 2021, the number of developers engaged with Nvidia has more than doubled from 2.5 million to 5.1 million in the first quarter of 2024. The AI startup community has experienced a similar surge, nearly tripling from 7,000 to 19,000 in just three years. This exponential growth is not just a number; it's a reflection of the industry's collective belief in Nvidia's vision and technology. 

Looking ahead to the second quarter of FY2025, Nvidia's revenue forecast is set at an impressive US$28 billion, plus or minus 2%. Should this forecast materialize, it would represent a monumental leap from the US$13.5 billion revenue reported in the second quarter of FY2024.

Nvidia's stock performance mirrors its operational success, with shares reaching a new all-time high of US$1,038 following the release of its results. This marks an increase of over 115% year-to-date, a clear indicator of the market's confidence in Nvidia's direction and potential.

Conclusion

As Nvidia continues to innovate and expand its influence across the technology landscape, it stands as a beacon of progress, driving the industry towards a future where AI and accelerated computing are not just tools, but essential components of our daily lives. With a solid foundation and a clear vision, Nvidia is not just participating in the tech revolution; it's leading it. 🚀

2. Alphabet Inc. (NASDAQ: GOOGL) at the Forefront of AI Revolution

Alphabet Inc., the parent company of Google, has once again demonstrated its prowess in the realm of artificial intelligence (AI) at the recent Google I/O conference held in Mountain View, USA. The event, which has become a beacon for technological advancements, was particularly notable for its emphasis on AI, with Alphabet CEO Sundar Pichai mentioning the term “artificial intelligence” a staggering 121 times during his keynote address.

Embedding AI Across Billions of Devices

The core message from Pichai was clear: Alphabet is on a mission to integrate AI into every facet of its services, impacting the nearly two billion users that rely on Google’s ecosystem daily1. This bold vision is set to redefine how we interact with technology, making AI an inseparable part of our digital experience.

Introducing Gemini 1.5 Flash

In a significant development, Alphabet unveiled the Gemini 1.5 Flash, a new AI model optimized for speed and efficiency. This innovation was born out of the need for a lightweight and cost-effective alternative to the Gemini Pro model, catering to developers who are eager to create AI-powered applications without the associated heavy resource requirements.

Doubling Down on AI’s Capabilities

Looking ahead, Google plans to supercharge Gemini’s capabilities by doubling its context window from one million tokens to two million. This expansion will enable the AI to process two hours of video, 22 hours of audio, and write over 60,000 lines of code simultaneously. Such an upgrade is not just a technical enhancement; it’s a leap towards a future where AI can handle complex, multifaceted tasks with unprecedented ease.

Project Astra: A Glimpse into the Future

Perhaps the most captivating reveal was Project Astra, Google’s latest universal assistant. A demonstration video showcased the assistant engaging in a fluid conversation with a user, covering various aspects of daily life and even reminding the user of the location of her misplaced glasses. This level of natural interaction signifies a new era of AI assistants that can seamlessly integrate into our lives.

Google Photos and Search: Smarter and More Intuitive

Google Photos is set to receive upgrades that will allow users to perform more complex queries, yielding highly specific search results. This enhancement is particularly exciting for social media enthusiasts, as it will enable them to caption photos with greater precision before sharing them online.

In a transformative move, Google Search will undergo significant changes to accommodate complex questions, providing AI-generated answers alongside traditional search results. This development is poised to redefine how we seek information on the web, making the search experience more intuitive and informative.

Conclusion

Alphabet’s announcements at Google I/O are not just incremental updates; they are indicative of a paradigm shift in the digital landscape. As AI becomes more deeply ingrained in our daily digital interactions, Alphabet continues to lead the charge, shaping a future where technology is more responsive, intelligent, and, ultimately, more human.

3. Microsoft’s Strategic AI Investments in Southeast Asia

In the burgeoning landscape of artificial intelligence (AI), Microsoft (NASDAQ: MSFT) is not just participating; it’s leading the charge with strategic investments that are reshaping the digital terrain of Southeast Asia. Here’s a deep dive into Microsoft’s monumental commitment to AI and cloud infrastructure, which is poised to catalyze a new era of innovation and economic prosperity in the region.

 Microsoft’s Strategic AI Investments in Southeast Asia

Microsoft’s foray into AI is marked by a staggering US$2.2 billion investment in Malaysia, earmarked for building state-of-the-art digital infrastructure. This investment, spread over four years, signifies the largest financial commitment by Microsoft in its 32-year history in Malaysia. The initiative includes the construction of cloud computing and AI services infrastructure, which was confirmed by CEO Satya Nadella during his visit to Kuala Lumpur.

Training and Skilling Initiatives

In tandem with this investment, Microsoft is set to provide AI training for 200,000 Malaysians, collaborating with the government to fortify the nation’s cybersecurity capabilities. This skilling initiative is part of a broader vision to train 2.5 million individuals across Southeast Asia in AI by 2025, empowering a new generation of tech-savvy professionals.

Economic Impact and Growth Prospects 

The ripple effects of Microsoft’s investment are profound. Research by Kearney suggests that AI could contribute nearly US$1 trillion to Southeast Asia’s GDP by 2030, with Malaysia capturing a significant US$115 billion of this growth. This aligns with Microsoft’s pledge of at least US$7 billion to develop services from Japan to India, underscoring AI as a pivotal growth engine.

Expansion Beyond Malaysia 

Microsoft’s AI ambitions extend beyond Malaysian borders. Nadella announced a US$1.7 billion investment in Indonesia to advance cloud and AI infrastructure, supporting the nation’s vision to become a global economic powerhouse. Additionally, Microsoft is set to invest in Thailand, further solidifying its commitment to the region’s digital transformation.

Conclusion: A Bright Future for Southeast Asia

The strategic investments by Microsoft are not just about technological advancement; they’re about creating a brighter future for Southeast Asia. These investments promise to kickstart new industries, generate employment, and boost the economy, positioning the region as a global hub for digital innovation and AI prowess.

Final Thought

Nvidia, Google, and Microsoft are well-positioned to drive innovation and growth in the coming years. Nvidia continues to dominate the AI and semiconductor markets with its cutting-edge technology, making it a pivotal player in the future of computing and AI advancements. Google remains a leader in digital advertising and cloud services, with its relentless focus on AI and machine learning promising to unlock new avenues of growth and efficiency. Microsoft, with its diverse portfolio spanning software, cloud computing, and enterprise solutions, is set to benefit from the ongoing digital transformation across industries. Collectively, these companies are not only shaping the tech landscape but also pushing the boundaries of what's possible, ensuring their relevance and growth potential well into the future.

Happy Reading and Investing 🚀📈 .