Nvidia, Apple, Tesla: A Financial Analysis On Why You Should Invest
Added 2024-06-27 16:08:14 +0000 UTCPlease give this a read if you haven’t already, it will help you understand what I am explaining today.
You don’t have to follow this suggestion but this is simply a guided piece of insight which could help you make a good return on your investment in the next 2-3 years.
I do not do buy and sell calls. So it is ultimately your responsibility to decide when to buy and sell your stocks off.
I am not a full time stock researcher or financial advisor. This is simply a blueprint of what I would do. You are more than welcome to copy this if you wish to.
(It’s always best to follow a blueprint and strategy which already works.
You do not need to be a full time stock investor with a PHD in finance and economics to win with investing. You simply have to follow and copy a good blueprint and strategy which is proven to work.
A few people have messaged me privately with how well their investments are performing since I last spoke about this subject 7 months ago.
Why I am not investing money into the stock market?
Because I run a business. it makes more sense to invest that money into the advancement and development of my business than to invest into the stock market.
But if I did not have a business. then this would be my strategy for the next 2 or possibly 3 years.
This guide is simply here to explain why it’d be a good decision and show you exactly what I would do if i was in a phase where I could invest into the stock market right now.
1. Nvidia
I always recommend investing into the S&P 500 because this is a strong and reliable strategy, providing diversification across 500 of the largest USA based companies.
However, Nvidia has recently emerged as a standout performer, driving a significant portion of the S&P 500's total growth.
Over the past nine months, Nvidia ALONE has contributed to 33% of the total growth of the S&P 500.
This is remarkable, considering there are 500 top performing companies within the S&P 500.
This highlights Nvidia’s potential as a great investment for at least the next 1.5 - 2 years.
It is crucial to know that investments can be volatile.
Nvidia’s stock price might experience corrections or periods of stagnation.
However, the long-term outlook remains positive, with significant potential for profitability.
The adoption rate of AI is staggering, driven by its critical use in various industries.
One significant reason for this rapid adoption is the current labour shortage.
As companies face difficulties finding enough skilled workers, AI provides a solution by automating tasks and increasing efficiency.
Another reason why businesses are focused on AI is because artificial intelligence is 100% logical all of the time, whereas when humans are involved in business operations, they will allow their emotions to override their logic sometimes which can hurt business operations.
Relying on human emotions for business is not reliable and these companies know that.
Nvidia’s Role in AI:
Nvidia is the Number 1 of AI technology with its powerful GPUs, which are essential for AI applications.
The company’s AI platforms are used in a wide range of industries, from healthcare to finance, helping businesses operate more effectively despite labor shortages.
By investing in Nvidia, you are tapping into the exponentially growing AI market, which is set to expand as more companies adopt AI to overcome labour challenges.
Eventually, tech will represent 40% to 50% of global stock market weighting, up from about 20% today.
As of the 27/June/2024, six out of seven of the most valuable companies in the world are tech companies based in USA with one being an oil company in Saudi Arabia.
AI technology has come and I strongly believe it is here to stay as humanity becomes more advanced. Companies will need this to continue growing and expanding.
You should consider being an early adopter of this.
2. Apple
Apple's stocks price has not been performing so well over the past 9 months.
Heads Up: Understanding Stock Price Fluctuations
Just because a stock price is in the red does not always mean the company is failing.
You must pay attention to what the company is doing behind the scenes. Consider their innovations, market expansions, and overall business strategic direction.
Often, short-term dips are a result of market fluctuations and do not reflect the company's long-term potential.
For example, a company investing heavily in research and development may see temporary profit declines, but these investments can lead to significant breakthroughs and future financial growth.
Always look beyond the immediate stock price and focus on the broader business strategy and market conditions.
Apple are never the first to introduce new innovations. They often copy what's already working and then add their 'Apple' touch to it and make it better than anyone in the market has done.
So with this whole AI boom, Apple is late to the game (as usual) which has caused their stock price to decline slightly which is why I believe this makes it a great buying opportunity.
Apple have finally recently started to introduce their new, updated and advanced AI and I can only see it getting better from here onwards.
Apple has been the world's largest company for most of the last 10 years.
It briefly lost the top spot and even fell to third place behind Nvidia for a while. However, Apple is now competing again for the No. 1 position.
Apple's success comes from its ability to keep innovating and its STRONG brand loyalty.
I can see Apple set to stay ahead and grow even more in the coming years. especially with their introduction to their AI.
Tesla
Tesla's stock has not been performing well for the past year. However, this does not mean the company is failing. Tesla is a highly innovative company with strong fundamentals.
Petrol-powered cars are being phased out due to legal restrictions, forcing more car manufacturers to produce electric cars.
Who is the number one electric car company in the world? Tesla.
Tesla's Competitive Edge
Better Electric Cars in China:
Yes, there are many electric cars in China that are MUCH better than Tesla cars.
However, due to legal restrictions, the biggest markets in the world, like the UK and the USA, have banned those companies from selling their cars in these countries. The average person is not likely to go through the hassle of importing a car.
Limited Competition:
This means Tesla does not face significant competition in major financial markets like the USA and the UK.
Key Strengths of Tesla
- No Debt: Tesla has no debt, which strengthens its financial position.
- Smart Leadership: Tesla has an incredibly smart CEO (Elon Musk)
- Brand Awareness: Tesla has strong brand recognition.
- Global Presence: Tesla is a top global company.
- Profit: They make more profit per car than any other electric car company in the world.
Tesla Investment Opportunity
Tesla's stock price is not performing well at the moment, which presents a great buying opportunity. The company's business fundamentals and plans have not changed; in fact, they are making plans to innovate and improve, especially with advancements in their car AI technology.
Investing in Tesla now could be a strategic move, given the company's strong position and future growth potential.
It may potentially be stagnant or continue to dip slightly but long term I believe it would be a good investment.
If you choose to invest into Tesla, you will have to be a bit more patient with this one as they have been in the red for about 1 year.
Closing Thoughts
These three stocks—Nvidia, Apple, and Tesla—have the potential to be very profitable in the next 2-3 years.
If I weren't focused on business, I would be aggressively investing in them.
However, if you prefer a more well-rounded investment, you can consider the S&P 500. It provides good returns, though it may not match the high returns of investing solely in the top-performing tech companies in the short term. Investing in the S&P 500 is less risky than focusing solely on tech stocks, as it offers greater diversification.
In my opinion, given the current state of the economy, having a tech-focused investment portfolio for the next 2-3 years could be a smart move. It carries a small risk, but the potential rewards from these leading tech companies could be substantial.
Understand Market Corrections
Understand that market corrections are going to happen. Sometimes you may see the price dip or remain stagnant.
Every day will not be a green profit day. Some days will be red, it could last for weeks and months sometimes (like tesla) but this does not mean the company is a failure.
You must be prepared for those red days before you invest.
The stock market experiences ups and downs, and short-term fluctuations are a normal part of business and investing.
These corrections can be due to various factors, such as market sentiment, economic data, or geopolitical events, and they don't necessarily reflect the underlying health or potential of the company.
Don't panic and sell when you see red days. As long as the company's business has not changed and they are keeping up with the market, it is fine for the most part.
As a Long-term investor, you should stay focused on the fundamentals of the companies you invest in and maintain a long-term perspective. Remember, temporary setbacks can often present buying opportunities if the company’s overall strategy and growth strategy remain strong.
Being mentally and financially prepared for these market corrections will help you stay committed to your investment strategy and avoid making impulsive decisions based on short-term market movements. Stay calm, rational and logical, keep a level head, and focus on the long-term potential of your investments.
Give this a read if you have not already.
Also, I’d encourage you to do further research on these recommendations so you are fully aware of what you are doing.
-Till next time.
