“AI Frenzy Hits Stock Market: Nvidia Earnings Call Marks Year of Explosive Growth”

Artificial intelligence (AI) has become a hot topic in the stock market, with enthusiasm spreading rapidly. Nvidia’s upcoming earnings call on Wednesday night marks a year since the chipmaker first surprised Wall Street with its demand for AI chips. Since then, mentions of AI on earnings calls have increased by 186% compared to the first quarter of 2023, according to Bank of America Research.

The conversation around AI has shifted from chipmakers like Nvidia and AMD to AI power users like Alphabet, Meta, Amazon, and Microsoft. Strategists have also highlighted a broadening out to other sectors that could benefit from increased power usage, such as Energy, Utilities, and Commodities.

“It’s not just about NVDA anymore,” noted Bank of America US and Canada equity strategist Ohsung Kwon in a recent client note. This shift in focus has already had an impact on the market, with precious metals like copper hitting recent highs and the Utilities and Energy sectors performing well in the S&P 500 this year.

Individual companies are also benefiting from the AI trend, with names like Vistra Corp and Constellation Energy seeing significant stock price increases. Morgan Stanley’s chief investment officer Mike Wilson listed Utilities as an Overweight sector, citing upside potential to the AI power theme.

Companies across various sectors have been emphasizing their role in the AI buildout, with mentions of AI soaring in the first quarter earnings calls. Investors will be closely watching Nvidia’s report for insights into AI chip demand, as the company has consistently exceeded expectations and boosted its outlook amid strong demand for AI servers.

The big question now is whether this trend will continue or if there could be a pullback in valuations. JPMorgan Asset Management global market strategist Jack Manley warned of a potential “shaky road” if markets realize they may have gotten too excited about AI.

Overall, the growing enthusiasm for AI in the stock market is reshaping investment strategies and driving significant changes across various sectors. As companies continue to leverage AI technology, investors will need to stay vigilant and adapt to the evolving landscape.

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