$3.7 trillion.
That’s the projected global market size for artificial intelligence in 2034.
Today, the market is valued at $757.6 billion.
Hitting the $3.7 trillion mark in nine years means 385.8% growth in a relatively short amount of time.
A lot of pieces need to come together to make that a reality.
We need to solve the power issue… AI data centers require an immense amount of power. It needs to be constant and at a high rate.
We need to address the infrastructure issue… that will require a significant increase in the number of data centers currently online to process AI.
Additionally, we require the necessary components to make AI work. This ranges from large storage units capable of housing thousands of terabytes of information to graphic processing units capable of working with complex, large language models.
One company has stood as the symbol for the AI boom, and it’s one I want to analyze a little deeper today… Nvidia Corp. (NVDA).
I’m going to use screeners from Adam’s Green Zone Power Ratings system to illustrate where NVDA has been and where it stands today in the system.
This may provide some clues on where the stock might be going.
Let’s get started…
Breaking Down An AI Giant
Today, we’re going to review what I like to call a “ratings journey.”
This is where I track five of the factor ratings for a stock (I left out Size due to Nvidia’s massive $4.4 trillion market cap) that make up the Green Zone Power Ratings system over a period of time.
For perspective’s sake, I selected five different periods: today, one month ago, three months ago, six months ago, and one year ago.
From this, we can tell the progression (or regression) NVDA has made in each of the five factors.
For example, we know that NVDA’s overall rating hit a low point six months ago. By diving into its ratings journey, we can see this was due to a decline in its Momentum and Volatility ratings.
This was back in February and March, when NVDA was experiencing notable resistance.
We can also see that NVDA’s Momentum reached a high point last month, coming out of the headwinds faced six months ago.
However, today, its Momentum rating, while still “Bullish,” is back to facing some pressure. The stock is down 0.8% over the last four weeks.
The stock has remained overvalued for the last 52 weeks, as its Value rating has consistently been in the “High-Risk” category.
Bright spots for the stock have been its ratings on Quality and Growth.
Those scores have not wavered from “Strong Bullish” as the company continues to grow revenue and EPS as well as increase its gross, net and operational margins.
What NVDA’s Ratings Journey Tells Us
It’s a bit of a mixed bag.
On the fundamental side, NVDA remains one of the best Quality and Growth stocks on the market.
Under normal circumstances, its Value rating would be a concern; however, Wall Street seems more interested in maintaining the AI trade momentum than in actual valuation metrics.
The biggest concern is its price-based ratings.
NVDA’s Momentum score has slipped from its 52-week high, and its Volatility rating has moved only slightly.
This suggests the pace at which NVDA’s stock price is advancing has started to slow, while maintaining a solid degree of volatility.
Overall, the Green Zone Power Ratings system tells us it’s best to sit on the fence and wait to see if NVDA’s position on the system improves in the coming weeks and months.
It’s also important to realize that a company’s rating won’t always tell the whole story…
Adam’s Green Zone Power Ratings system is built to compile years of market data and company reports to give you the clearest picture of how a stock might perform based on where it stands right now, today.
But things can change quickly in the tech world, especially for companies out on the leading edge like Nvidia.
Which is why Adam often goes “beyond the Green Zone” to tap into massive opportunities before they even show up on Wall Street’s radar.
And that’s precisely what he’s doing tomorrow — when he goes live with the results of his latest research report.
Adam’s tapped into a pivotal breakthrough for Nvidia that could slingshot one small company into stratospheric 1,000%+ gains … and it all starts next week on October 28.
Subscribers can view Adam’s broadcast for free, just click here to reserve your spot and we’ll send you an email as soon as he goes live.
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets