If you own top global tech stocks, time to get rid of your smug grin. Utilities are smashing all your precious AI plays, even though stocks like Nvidia, the chip powerhouse at the forefront of the AI revolution, continue to breach new all-time highs every other day. Nvidia stock is currently trading at over US$1,000 ($1,350) a share from around US$50 in mid-March 2020, a 40-fold jump over four years. On May 22, Nvidia reported first-quarter February-April 2024 revenues of US$26 billion, up 261% from US$7.2 billion a year ago, with earnings per share of US$6.12, up nearly six-fold from US$1.09 a year ago.
Quick. Can you name the five top-performing stocks on the US benchmark S&P500 index? Wrong, if your answer was mostly companies that make chips, providing the compute or the main building blocks for AI, or artificial intelligence.
Wrong again, if your answer was software or Internet firms like Microsoft, Google’s owner Alphabet, social media giant Meta Platform, and e-commerce and cloud computing pioneer Amazon.com. The correct answer: utilities. Yes, those sleepy, boring, excruciatingly slow-growing electricity generating firms whose stocks are owned by widows and orphan funds, the mainstay of the so-called Grandma portfolios because of their consistent dividend streams.
