From Stansberry Research:
It has been called humanity's final invention...
Experts say this topic could become the "most important conversation of our time."
Insiders are already predicting it will have a bigger economic impact than the steam engine, electricity, and the Internet.
The World Economic Forum claims it will usher in the "Fourth Industrial Revolution."
Research firm McKinsey Global calls it "the next digital frontier... one of the most important things humanity is working on."
In short, this technology is so revolutionary and dynamic that it could completely change every aspect of daily life – from the way you work to how you raise your kids to where your family vacations.
That's why giant companies have been making big, early investments in developing this new tech and acquiring the innovative startups that work on it. For example, Apple and Google have pumped billions of dollars into it already...
We're talking about artificial intelligence ("AI").
AI gained popularity decades ago through science fiction novels and movies... But today, it's one of the most promising, yet controversial, technologies on the planet.
Right now, AI has tons of uses:
It puts the "smart" in your smartphone. It's responsible for up to 60% of the trades on Wall Street. It also controls critical parts of our nation's infrastructure.
Every Google search... every Spotify playlist... has AI behind it.
Apple virtual assistant Siri uses AI to interpret your words and requests. Netflix uses AI to recommend content based on your interests. Smart thermostat Nest uses AI to anticipate and adjust the temperature in your home. NASA uses AI to search for alien life, discover new planets, and even protect Earth from rogue asteroids.
Now, for the first time ever, AI is moving beyond its programming to think for itself and create original solutions to problems.
That's where today's company comes into play...
Nvidia (Nasdaq: NVDA) is the arguable frontrunner in the gaming, mobile-computing, and AI sectors.
It has been making cutting-edge hardware and software since the early 1990s. Its products are in five of the top seven most powerful supercomputers in the world. And it has 1 million developers on its computing platform.
Nvidia designs hardware cards called graphics processing units ("GPUs"). They sit inside a computer and render images on the computer screen. GPUs work with the central brain of the computer (the central processing unit, or "CPU") to run software.
Without a graphics card, your computer would bog down with calculations, and your screen would be blank.
One of Nvidia's biggest AI breakthroughs is its autonomous driving division. Its AI computing platform – called DRIVE – is a high-performance computer system and software bundle that uses special AI-enhanced GPUs to function as the "brain" for autonomous vehicles.
The system ingests all the data that a human driver takes in – real-time variables like distance, speed, lane location, and other drivers on the highway – and adjusts the car accordingly.
But self-driving cars are only one part of Nvidia's business...
You see, Nvidia is also a leader in video game chips.
Gaming is a huge part of Nvidia's business, making up more than 50% of revenues. The nearly $138 billion video game market depends on GPUs to make stunning 3D images that move in real-time.
Nvidia designed a new series of GPUs for gamers to have the smoothest movements and most detailed graphics possible. Its GeForce RTX 2080 Ti graphics card is the most advanced on the market. It runs AI algorithms, allowing game designers to take a huge leap forward in graphics quality... rendering the most lifelike graphics at the fastest speeds around.
Today's video games look like real-life actors on a movie set. You feel like you're in the action. It's one step away from virtual reality actually putting you in the scene.
Estimates show that Nvidia has about 70% of the video gaming market. In 2018, GPU sales grew 13% from a year ago. With the release of its new chips and the growing popularity of e-sports, the market dominance should continue.
Five years ago, Nvidia had an $8 billion market cap and roughly $4 billion in annual sales.
Today, it has a market cap of around $90 billion... And over the past 12 months, it has generated nearly $12 billion in sales.
The great thing about Nvidia is not just its solid sales growth. The company earns fat margins. And they are getting fatter...
Gross margins – sales minus cost of goods sold divided by sales – are more than 60% (almost double its 2005 margins). Its peers average around 58% gross margins according to Bloomberg.
You know management is doing a good job when it keeps operating expenses under control as sales are soaring. Its peers boast operating margins of around 16% on average. And those are healthy margins by most standards. Nvidia's operating margins hit 30% for the quarter ending April 28.
And Nvidia returns a lot of capital to shareholders, too. Late last year, the company confirmed it will buy back an additional $3 billion in stock by the end of its 2020 fiscal year.
Recently, the stock has been beaten up as trade tensions between China and the U.S. have escalated. The stock has sold off 50% from its October highs and is sitting near a two-year low.
But it's still a great business behind a growing trend.
When a "Global Elite" business drops by more than 20%, we like it. When it drops by more than 40%, it really grabs our attention.
Sometimes investing is simple.