Underdog Investors

Micron Technology (NASDAQ: MU) is gearing up for a big jump in sales from its high bandwidth memory (HBM). The company expects to go from making hundreds of millions in 2024 to billions in 2025. That's like going from saving pennies in your piggy bank to having stacks of cash in a vault. Key Points: Big Revenue Jump:  Micron is looking at a huge increase in HBM sales, predicting billions in 2025. Main Customer:  Nvidia, the big player in AI and graphics, is a major buyer of Micron's HBM3E. New Products:  Micron is working on even better HBM models, HBM4 and HBM4E. Supply and Demand:  There's going to be less DRAM and NAND memory available in 2024, which means Micron can charge more and make better profits. AI Boom:  The rise in AI PCs and smartphones, along with more AI in data centers, is set to drive record revenues. Plus, with Windows 10 support ending, many people will upgrade their PCs in 2025. Government Support:  Micron has a preliminary deal for $6....

US banks are doing well, even though they faced tougher challenges this year. The Federal Reserve's annual "stress test" showed that the biggest banks have enough money to survive a severe economic downturn. What is the Stress Test? Think of the stress test like a check-up for banks. The Federal Reserve looks at how well banks would do if the economy got really bad. This year, they imagined a situation where unemployment goes up, the stock market gets crazy, and the housing market crashes. Even in this tough scenario, the banks still had enough money to keep lending to people and businesses. Key Findings The Fed found that 31 big banks would be okay even in a severe economic crisis. They have a good amount of high-quality capital, which means they have money set aside for emergencies. The lowest level of this capital would be 9.9%, which is more than twice the required minimum. What's Next for the Banks? Because the banks did well, they can now announce plans to give ...

Nvidia's stock performance this year has been nothing short of remarkable. But the big question remains: can its shares continue to rise? A message from one of our members caught my attention. In essence, the member asked, "My investment in Nvidia (NASDAQ: NVDA) has grown from four digits to six digits. What should I do?" This is a common question many investors face. The Phenomenal Rise of Nvidia Nvidia was one of our stock picks back in September 2018, before The Smart Investor was established. Since then, shares have surged over 1,850%, or more than 19 times their value, excluding dividends. Currently, Nvidia is standing alongside some of the world's largest companies, like Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). But in terms of stock performance, Nvidia is in a league of its own. According to Barron’s, Nvidia's shares rose by a staggering 240% in 2023, far outpacing Microsoft's 58% year-on-year gain and Apple’s 49% increase. This trend continued...

The World's Favorite Currency The US dollar is the closest thing the world has to a global currency. It is the preferred choice for most international transactions and is held as a reserve currency by many countries, whether friendly or hostile to the US. The dominance of the dollar began in earnest after World War II when the US emerged as a global superpower. Investors trust the dollar and US assets, such as US Treasuries, because they are seen as safe places to store wealth in both good times and bad. This trust is underpinned by the strength and stability of the US economy and its laws. Why Is the Dollar So Dominant? 1. It’s Big The size of the US economy is a primary reason for the dollar's dominance. The US economy is massive, almost as large as the economies of China, Japan, and Germany combined. This economic heft is supported by the largest and most liquid capital markets in the world. US stock markets, home to many of the world's wealthiest and most innovative com...

The World's Favorite Currency The US dollar is the closest thing we have to a global currency. It’s the go-to choice for most international transactions and is held as a reserve currency by many countries. The dollar's dominance began after World War II, when the US emerged as a global superpower. Investors trust the dollar and US assets, like US Treasuries, because they are seen as safe places to store wealth, both in good times and bad. The strength and stability of the US economy and its laws underpin this trust. Why Is the Dollar So Dominant? 1. It’s Big The US economy is huge, almost as large as the economies of China, Japan, and Germany combined. US capital markets, including stock and bond markets, are the largest and most liquid in the world. This means US assets can be easily bought and sold, making them very attractive to investors. When companies need money, they often turn to US markets. 2. It’s Stable The dollar is involved in 88% of foreign exchange transactions. ...

Apple is synonymous with innovation and premium products.  Here’s why investing in Apple can be a winning strategy: 1.  Strong Brand Loyalty Apple’s brand loyalty is unparalleled, with a dedicated customer base that eagerly anticipates new product releases. This loyalty drives repeat sales and consistent revenue. 2.  Ecosystem Integration Apple’s ecosystem, comprising the iPhone, iPad, Mac, Apple Watch, and services like iCloud and Apple Music, creates a seamless user experience. This integration encourages customers to stay within the Apple ecosystem, driving sales across multiple product lines. 3.  Robust Financials Apple’s financial health is strong, with substantial cash reserves and high-profit margins. This financial stability allows for significant investments in research and development, fueling future growth. 4.  Innovation and Product Development Apple’s commitment to innovation is evident in its regular product updates and new releases. The company’s ...

Microsoft has evolved from a software giant into a diversified technology leader. Here’s why investing in Microsoft can be a smart move: 1.  Innovation and Product Diversification Microsoft’s continuous innovation in cloud computing (Azure), software (Office 365), and hardware (Surface devices) ensures it stays ahead in the tech industry. This diversification across products and services provides multiple revenue streams. 2.   Strong Financials Microsoft boasts strong financial health with significant cash reserves and consistent revenue growth. Its profitability and efficient operations make it a financially stable investment. 3.  Growth Potential With the rapid adoption of cloud computing and digital transformation, Microsoft is well-positioned to capitalize on these trends. Azure, Microsoft’s cloud platform, is a key driver of future growth. 4.  Market Leadership Microsoft’s dominant position in the software market, particularly with Windows and Office, provides a...

Coca-Cola is one of the most iconic brands globally, known for its longevity and consistent performance. Investing in Coca-Cola stock can be a cornerstone of a solid investment strategy.   Here’s why: 1.  Brand Strength and Market Dominance Coca-Cola’s brand is recognized worldwide, making it a dominant player in the beverage industry. This brand strength translates into customer loyalty and robust sales, ensuring steady revenue. 2.  Dividend Reliability Coca-Cola has a long history of paying dividends, making it an attractive option for income-focused investors. The company has increased its dividend for decades, demonstrating a commitment to returning value to shareholders. 3.  Global Presence With operations in over 200 countries, Coca-Cola’s diversified geographic presence reduces risk and provides exposure to various markets. This global reach ensures that the company can capitalize on growth opportunities worldwide. 4.  Consistent Performance Coca-Cola has...

Imagine if three of your favorite sports teams were all racing toward a major championship, each with a unique game plan. This is what's happening right now in the world of technology. Microsoft, Apple, and Nvidia are like those top teams, each striving to become the first company to reach a staggering $4 trillion market value. Let's dive into how each of these tech giants is making its move and what this means for you as an investor. Microsoft: Bringing AI to the Office Think of Microsoft as the experienced team captain, using its deep knowledge to stay ahead. Known for its popular software like Windows and Office, Microsoft is now pushing into artificial intelligence (AI) in a big way. They’ve introduced a tool called Copilot, which is like having a smart assistant in your computer that helps you work more efficiently. By integrating AI into everyday business applications, Microsoft aims to make businesses run smoother and more profitably. Imagine having a tool at your job th...

Imagine discovering that the generic brand cereal tastes just as good as the expensive name-brand one. That’s what Apple is showing the world right now in the realm of Artificial Intelligence (AI) - you don't always need the high-priced option to get cutting-edge results. Nvidia, known for its powerhouse GPUs, is facing a new challenge as Apple demonstrates that their own silicon can handle AI without breaking the bank. Nvidia’s Big Numbers and Bigger Challenges Nvidia, a titan in the tech world, recently hit a market valuation around $3 trillion, thanks to its strong earnings and high demand for its GPUs, essential for AI technologies. However, Apple’s latest move shows that the tech giant isn’t the only player in town capable of high-level AI processing. Nvidia's latest financial results were impressive with a 78% gross margin and significant net income from its data center business, which relies heavily on AI. Yet, Apple has thrown a wrench in the works by opting to use its ...

Imagine being part of a team that always seems to have the latest and greatest strategy, staying one step ahead in the game. That's kind of like Microsoft right now, thanks to its heavy investments in Artificial Intelligence (AI). As the tech giant delves deeper into the realm of AI, it’s setting the pace, much like a trendsetter in technology, but it's not without its challenges. Why Microsoft is Betting Big on AI Back in 2019, Microsoft threw a huge sum into the AI pot, investing $1 billion in a partnership with OpenAI. Think of it as backing the most promising athlete in the school before they’ve even won their first championship. This move wasn't just about getting good returns; it was about shaping the future of AI. Microsoft didn’t stop there. They continued to pour billions into AI development, aiming to create smarter and more capable AI systems that could do everything from understanding human speech to automating complex tasks. Microsoft’s AI doesn’t just live in ...

Imagine you’ve discovered a great new restaurant that’s just opened up and everyone is raving about it. That's somewhat similar to the excitement surrounding Nvidia recently, driven by their advancements in generative AI. Nvidia's stock has soared +35.2% following excellent first-quarter results and promising guidance for the next quarter, along with news of a 10-for-1 stock split. It’s as if Nvidia has become the hottest spot in town almost overnight! Why Is Nvidia So Popular Right Now? Nvidia is at the forefront of the generative AI revolution, providing essential technology that powers a wide range of applications from automated customer service to advanced data analysis. This has led to robust sales growth in both infrastructure and Software-as-a-Service (SaaS) layers, solidifying Nvidia's position as a market leader in this innovative field. However, Potential Challenges Loom While the spotlight is currently bright on Nvidia, similar to a newly opened restaurant facing...

Streaming services have become a part of everyday life, much like grabbing a coffee or checking social media. According to a Forbes study, 99% of US households now pay for at least one streaming service. This trend isn’t just in the US; Latin America and the Asia Pacific are also seeing big jumps in subscribers, with growth rates of 8% and 21% respectively. This shows that streaming is a global phenomenon. However, as the demand for streaming grows, so does the competition. Companies need to keep their prices fair and their content diverse to keep customers happy. The same Forbes study found that 45% of Americans canceled a streaming service because it was too expensive. In this competitive market, there will be clear winners and losers. Netflix: The Undisputed Leader Think of Netflix (NASDAQ: NFLX) as the king of streaming. Remember when Netflix started as a DVD rental service? Now, it’s a giant in the online streaming world. Netflix had its breakthrough in 2013 with the launch of its...

Since ChatGPT burst onto the scene in late 2022 with backing from Microsoft (NASDAQ: MSFT), generative AI has been transforming the global economy and society. While many believe that generative AI could revolutionize every industry, there is a growing sentiment that we might need to temper our enthusiasm and allow use cases to mature to justify the significant investments being made. Predictions on AI-driven investments vary, but many estimates suggest that AI will attract trillions of dollars over the next decade. This has enormous implications for companies, workers, and investors. While it is still early to quantify the overall productivity enhancements from AI, there are already signs of significant efficiency gains. For example, developers are reportedly coding up to 55% faster using tools like GitHub Copilot. Similarly, Boston Consulting Group estimates that customer service operations could become 30–50% more efficient with widespread generative AI implementation. Several compa...

The S&P 500 had an impressive week, climbing 1.58% to close at 5,431.60 points, with gains in four out of five sessions. Its companion, the SPDR S&P 500 ETF Trust (SPY), also rose 1.64% for the week. This week marked the best performance for Wall Street's benchmark index in over a month. The S&P 500 even set a fresh record close for four days straight, peaking at an all-time high of 5,447.25 points on Wednesday and hitting a closing high of 5,433.64 on Thursday. So, what got everyone so excited?  The answer lies in surprisingly soft inflation data. Think of it like going to the grocery store and seeing that prices haven’t gone up for once. On Wednesday, the Consumer Price Index (CPI) showed its first flat reading of the year, while the core CPI had its smallest month-over-month increase since August 2021. Then on Thursday, the Producer Price Index (PPI) also slipped unexpectedly. This is like finding out that not only are your grocery bills staying the same, but your ut...