- Nvidia has crushed its peers, both in the artificial intelligence race and the stock market.
- A strategist calling for another massive year-end rally thinks its momentum will continue.
- Here are eight investments to make now to profit from booms in AI and cryptocurrencies.
Artificial-intelligence pioneer Nvidia's name is, fittingly, derived from the Latin word for "envy."
The chipmaker has had no shortage of naysayers, including billionaire hedge fund manager Leon Cooperman, who warned that the company's extended rally was "not going to end well."
Nvidia shares are up 162% since Cooperman made that remark last June, bringing its gain in the last 17 months to 685%. For a supposedly unsustainable rally, that's not too shabby.
Don't bet against Nvidia as AI momentum continues
Investors who missed the early innings of what could be a once-in-a-generation tech boom are likely kicking themselves and envious of others' gains, but they may not have missed the boat.
In fact, professional trader and tech bull John Salama sees even more upside for Nvidia since its latest earnings report gave no indication that AI's explosive growth is slowing down.
Salama, a swing-trader who works with proprietary trading firm Maverick Trading to boost his returns, sees AI as one of the best bets in a market mired in uncertainty, including the trajectory of interest rates and inflation and the outcome of key global events like the US elections.
"This AI story is not going to change, regardless of who's in the White House in January," Salama said in a recent interview.
Ironically, Salama sympathizes with Nvidia skeptics about the company's valuation, which he said is in "nosebleed territory." At first glance, the AI boom looks like a repeat of the tech bubble in the late 1990s, where euphoria about the internet was well-founded but went overboard. The key difference between then and now is that Nvidia's breakneck rally is supported by jaw-dropping profit growth, as the firm brought in nearly $15 billion of net income last quarter.
Tech companies can't get enough of Nvidia's AI chips, and unless demand suddenly dries up, investors will likely stick with the stock. Salama sees shares surging past $1,200 by year's end, implying at least 5% more upside.
"I don't think people are going to flog it just yet," Salama said. "It's an amazing valuation — very 2000-like — but it doesn't mean it can't go higher."
Stocks will shatter expectations — and records
Like AI-focused companies, US stocks aren't cheap but can continue to charge higher.
In late March, Salama predicted that the S&P 500 would hit the 6,000 mark before 2025, though he warned of a near-term pullback, reasoning that the path higher wouldn't be straightforward.
"Everyone was so bullish, so leaning on one side of the boat — it almost felt like almost a foregone conclusion that you just continually print higher highs," Salama said. "And, of course, that's how you get offsides on the boat."
While that first forecast may not receive a verdict anytime soon, Salama's selloff call already came true, as the S&P 500 dipped below 5,000 in mid-April before swiftly rebounding to all-time highs. The strategist doesn't see stocks falling back to those lows, though he did caution that the market may be choppy this summer as interest rates remain elevated.
But even if a hiccup or two are on the horizon, Salama is confident that AI momentum will carry stocks higher — even beyond most bulls' S&P 500 price targets.
8 top investments to make now
Although tech companies have taken the lion's share of attention lately, Salama is encouraged that market breadth is much better now than it was a year ago. Stocks are performing well across sectors, Salama noted, citing a slew of cyclical and defensive names trading at records.
That makes for a healthy market, even if investors are diversifying away from high-flying stocks because they're worried about a market downturn.
"Investors are broadening," Salama said. "That could be a fear thing. People say, 'I don't want to buy Nvidia at $1,300 — I'd rather have some gold, in case everything goes to hell.'"
Salama recommends sticking with the AI trade by holding Nvidia (NVDA) and tech titans like Microsoft (MSFT), which owns a stake in ChatGPT creator OpenAI, and Apple (AAPL), which is planning to integrate the technology into its devices.
Other investments to consider are companies tied to AI champion Nvidia, including server builder Super Micro Computer (SMCI) and venerable computer company Dell (DELL). Both are underrated winners of the AI boom, as shares have already more than doubled in 2024.
Outside AI, Salama is incredibly bullish about bitcoin (BTC) during its mammoth rally and companies tied to cryptocurrencies, including Coinbase (COIN) and Robinhood (HOOD).
"You can't avoid bitcoin," Salama said. "Bitcoin looks great — absolutely great. It's up 145% in the past one year; it's grown in every timeframe."
The approval of a bitcoin-based exchange-traded product earlier this year rocketed the original crypto into uncharted territory, and the potential approval for an ethereum-based product could keep its momentum going while fueling continued rallies for crypto exchanges, in Salama's view.
