Latest news with #AI revolution
Yahoo
4 days ago
- Automotive
- Yahoo
This Might Be the Most Controversial Tesla Take Yet
Key Points For years, Tesla has been one of the most volatile stocks available in the market. While CEO Elon Musk has consistently touted groundbreaking advancements in AI, the company has little to show for these technology investments so far. Tesla could emerge as one of the biggest winners from the AI revolution, but following momentum blindly is not a prudent investment decision. These 10 stocks could mint the next wave of millionaires › It's no secret that Tesla (NASDAQ: TSLA) is one of the most popular -- and polarizing -- stocks on the market. What makes Tesla stock unique is its position at the intersection of long-term investing and short-term trading. Despite the stock's stomach-churning volatility, plenty of investors remain gung ho about Tesla's future. Why is that? In my view, it all comes down to one factor: confidence in Tesla's leadership -- particularly its eccentric CEO, Elon Musk. A few days ago, CNBC investment personality Jim Cramer shared perhaps the most controversial take on Tesla stock that I've heard in years. Let's break down Cramer's take and examine what he's really saying. Is now a smart time to invest in Tesla stock? Read on to find out. A Tesla take for the ages Cramer is the host of a CNBC program called Mad Money in which he covers the economy, individual stocks, and broader market themes. On his show, he hosts a segment called "Lightning Round," taking rapid-fire calls from retail investors who ask for advice about their portfolios. In the clip below, you'll hear Cramer's response to a caller who asked if Tesla stock might rebound back to her original purchase price. Although the video is brief, Cramer managed to share several important insights. Investing in Tesla stock requires a genuine belief that the company is not a traditional automaker. While the biggest money maker for the company is the electric vehicle (EV) business, Musk has been sharing a vision of transitioning Tesla to a technology platform for years. While Cramer did not offer specifics to the caller, he suggests that Tesla's technology stack is the real reason to own the stock. More specifically, Tesla is pursuing artificial intelligence (AI) products across two primary end markets: robotics and self-driving vehicles. Tesla's autonomous vehicle fleet, dubbed the robotaxi, has officially launched and has its sights on rival platforms from Alphabet's Waymo and Uber Technologies. In addition, Musk has proclaimed that Tesla's humanoid robot, Optimus, could wind up being the largest segment of the company's ecosystem in the long run. While that might sound overzealous, which is quite apropos for Musk, Nvidia CEO Jensen Huang has shared a similar sentiment, calling robotics a multi-trillion dollar opportunity. I believe that many investors view Tesla purely as a vehicle manufacturer and either discount or completely overlook the company's AI ambitions. Cramer lost me with his final thought to the caller, though. Here is where Cramer lost me Investors should not try to time the market. Instead, you're better off adding to high-conviction positions for a long time -- buying the stock at various price points. This is an investment strategy commonly referred to as dollar-cost averaging. One interpretation of Cramer's advice is that the caller shouldn't worry about the specific price she paid for Tesla stock because this could be just one entry point in a series of buys over the course of several years. The thing is, he didn't really say that. Instead, Cramer seems confident -- perhaps overly so -- that Tesla stock will rise from its current levels. This is where he (sort of) lost me. Where is Tesla stock headed from here? Over the last five years, Tesla stock has risen by 222% as of this writing (Aug. 7). This absolutely trounces the returns of the S&P 500 and Nasdaq Composite, both of which gained roughly 90% over the same period. The chart above benchmarks Tesla against its "Magnificent Seven" peers on the basis of forward price to earnings (P/E) over the past three years. Throughout the AI boom, Tesla's valuation multiples have consistently outpaced its peers' -- despite the company having little to actually show for its AI ambitions so far. Many of Tesla's peers have already launched, commercialized, and monetized AI-powered products and services. Meanwhile, Tesla is in the early innings of monetizing robotaxi and launching Optimus. For now, both of these projects remain fairly unproven revenue sources. This is an important contrast because investors could argue that much of the upside from Tesla's AI pursuits is already priced into the stock. Taking this one step further, the analysis above features future earnings estimates. Even though Tesla has yet to generate meaningful profits from its most ambitious bets, the company still fetches a premium valuation multiple over its peers who already have strong footholds in AI. While trying to time the market is a mistake, I do think that price and valuation should matter to investors. If Musk successfully pulls off his AI vision, then Tesla stock could experience a parabolic run for the ages. The big variable here is that no one really knows when robotaxi and Optimus will reach a critical mass. While Tesla stock may rise in the long run, there's no knowing when. Ignoring valuation might work for a swing trade, but for long-term investors, understanding what is priced in -- and what's not -- is crucial. This is what makes Cramer's statement about price a little flawed, in my view. Should you buy stock in Tesla right now? The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 11, 2025 Adam Spatacco has positions in Alphabet, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Nvidia, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy. This Might Be the Most Controversial Tesla Take Yet was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
National Post
5 days ago
- Politics
- National Post
Ian Bremmer: The death of the internet as a democratizing force a harbinger of the death of democracy
Technology was supposed to scatter power. Early internet visionaries hoped that the digital revolution would empower individuals to break free from ignorance, poverty and tyranny. And, for a while at least, it did. But today, ever-smarter algorithms are learning to predict — and shape — our every choice, enabling unprecedentedly effective forms of centralized, unaccountable surveillance and control. The coming AI revolution may even render closed political systems more stable than open ones — where transparency, pluralism, checks and balances, and other key democratic features could prove liabilities in an age of exponential change. If openness long gave democracies their edge, could it be their undoing tomorrow? Article content Article content Two decades ago I sketched the 'J-curve,' which links a country's openness to its stability: mature democracies are stable because they are open, consolidated autocracies are stable because they are closed and countries stuck in the messy middle tend to crack under stress. Article content Article content Article content Article content But this relationship isn't static; it's shaped by technology. Back then, the world was riding a decentralizing telecommunications and internet revolution that connected people everywhere and armed them with more information than they'd ever had access to before, tipping the scales toward citizens and open political systems. From the fall of the Berlin Wall and the Soviet Union to the colour revolutions in eastern Europe and the Arab Spring in the Middle East, global liberalization appeared inexorable. Article content That momentum has since slammed into reverse. The decentralizing information and communications technology revolution gave way to a centralizing data revolution built on network effects, digital surveillance and algorithmic nudging. Instead of diffusing power, this technology concentrated it, handing the small number of actors who control the largest datasets — whether governments or technology companies — the ability to shape what billions see, do and believe. Article content Article content As citizens were turned from principal agents to objects of technological filters and data collection, closed systems gained ground. And so, the gains made by the colour revolutions and the Arab Spring were reversed. Hungary and Turkey have muzzled their free press and politicized their independent judiciaries. Chinese President Xi Jinping has consolidated power and reversed two decades of Chinese economic opening. Most dramatically, the United States has turned from the world's leading exporter of democracy — however inconsistently and hypocritically — to the leading exporter of the tools that undermine it. Article content Article content The explosion of artificial intelligence capabilities is about to supercharge these trends. Models trained on our individual private data will soon 'know' us better than we know ourselves, programming humans faster than we can program them and transferring even more power to the handful of actors who control the data and algorithms.
Yahoo
7 days ago
- Business
- Yahoo
AI Is on Sale: 2 Stocks Worth Buying Before the Next Surge
Key Points One of the companies discussed in this article is using AI to win a bigger share of the lucrative digital advertising market. The other company in focus in this piece is enabling the AI revolution through its semiconductor manufacturing equipment, and it seems well-positioned to accelerate its growth. 10 stocks we like better than Meta Platforms › Artificial intelligence (AI) is projected to have a profound impact on the global economy in the long run by driving up productivity levels, spurring customers and businesses to spend money on AI-related applications. According to market research firm IDC, AI could account for 3.5%, or almost $20 trillion, of the global gross domestic product (GDP) by the end of the decade. This explains why investors have been betting big on AI stocks over the past three years, and that's why many of the names benefiting from the rapid adoption of this technology are now trading at expensive multiples. Hardware giants such as Nvidia and Broadcom sport rich earnings multiples, while software specialists such as Palantir and Snowflake are also expensive. However, if you have missed the AI-fueled rally in shares of the above-mentioned companies in the past year, it would be a good time to take a closer look at Meta Platforms (NASDAQ: META) and Lam Research (NASDAQ: LRCX). These companies are making the most of the global AI rollout, and importantly, they are trading at attractive multiples right now. Let's look at the reasons why buying these two AI stocks right now could turn out to be a smart long-term move. 1. Meta Platforms AI is turning out to be a nice catalyst for digital advertising giant Meta Platforms, which has been offering its AI-powered advertising tools to advertisers and brands to improve audience targeting and reduce costs simultaneously. On the company's latest earnings conference call, management pointed out that AI tools have led to a 5% jump in ad conversions on Instagram, along with a 3% improvement on Facebook. Moreover, Meta's users are now spending more time on its apps thanks to AI-powered content recommendations. The time users spent on Facebook and Instagram increased by 5% and 6%, respectively, in the previous quarter. These factors explain why Meta reported a solid increase of 22%, to $47.5 billion, in its Q2 revenue. Its bottom-line growth was even better, with adjusted earnings per share jumping by 38% year over year to $7.14 per share. The numbers crushed Wall Street's expectations, fueling a big jump in Meta's stock price following the release of its results on July 30. Meta benefited from a 9% year-over-year jump in the average price per ad served during the quarter. Also, the AI-driven improvement in user engagement led to an 11% increase in ad impressions delivered by the company in the previous quarter. Additionally, more advertisers on Meta's platform are now using its generative AI ad tools to create and optimize the performance of their campaigns. Meta says that almost 2 million advertisers are now using its AI video generation tools, while the adoption of its text generation tools is also improving. Looking forward, Meta's AI ad tools are likely to be adopted by more advertisers, as the company reports they significantly boost advertising returns. A study conducted by the company earlier this year revealed that its AI advertising tools are delivering a "22% improvement in return on ad spend for advertisers." It won't be surprising to see advertisers funneling those savings back into Meta's advertising solutions to reach a bigger audience, thereby leading to further growth in the social media giant's revenue and earnings. As such, it is easy to see why analysts have increased their earnings growth expectations for Meta. The best part is that investors can buy this tech stock at an extremely attractive 27 times earnings, which is lower than the tech-laden Nasdaq-100 index's earnings multiple of almost 33. Buying Meta at this valuation looks like a no-brainer, as the company can gain a bigger share of the digital ad market thanks to the AI-powered gains it is delivering to advertisers. 2. Lam Research Semiconductors are powering the AI revolution. Complex chip systems capable of tackling huge workloads are necessary to train and deploy AI models in data centers. This is why companies such as Nvidia, Broadcom, AMD, and Taiwan Semiconductor Manufacturing Company (TSMC) have seen healthy growth in their revenue and earnings in the past couple of years. However, the chips that the companies mentioned above design and fabricate wouldn't have been possible without the semiconductor manufacturing equipment sold by the likes of Lam Research. The company sells wafer and fabrication equipment (WFE) to foundries such as TSMC and Intel and to memory manufacturers like Samsung, Micron, and SK Hynix. These companies have been increasing their capital expenditure budgets to make more AI-focused chips. Unsurprisingly, industry association SEMI is projecting a 6.2% increase in WFE spending in 2025, followed by a bigger jump of 10.2% in 2026. It is worth noting that SEMI increased its WFE spending guidance last month. The good part is that Lam is already benefiting from the improved spending on semiconductor equipment. The company released its fiscal 2025 results on July 30. It reported a 23% year-over-year increase in annual revenue to $18.4 billion. Its diluted earnings per share increased at a faster pace of 43% to $4.15 per share last fiscal year. The stronger WFE spending forecast going forward explains why Lam's outlook was a solid one. It is expecting $5.2 billion in revenue in the current quarter, which is well ahead of the $4.63 billion consensus estimate. That would translate into a year-over-year increase of 25% in its top line. Lam seems capable of sustaining this healthy momentum throughout the year on the back of an increase in AI-focused semiconductor capacity. As such, don't be surprised to see Lam's revenue growth in the current fiscal year exceeding the 8% increase that analysts are projecting. The following chart tells us that Wall Street analysts expect Lam to clock healthy double-digit earnings growth rates. That looks reasonable, considering the 24% annual growth that the AI chip market is expected to clock over the next five years, which should ideally lead to more investments in semiconductor manufacturing capacity. In the end, there is a possibility that Lam will grow at a stronger pace than Wall Street's expectations in the long run, and this should pave the way for more upside in this AI stock. With Lam trading at just 23 times trailing earnings, investors are getting a great deal on this stock right now, and they may not want to miss it, considering the AI-fueled gains it could deliver. Should you buy stock in Meta Platforms right now? Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Lam Research, Meta Platforms, Nvidia, Palantir Technologies, Snowflake, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. AI Is on Sale: 2 Stocks Worth Buying Before the Next Surge was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
