Nvidia (NASDAQ: NVDA) is known for inventing, staying ahead of the curve, and surprising the market with its latest innovations. This has helped the company dominate the artificial intelligence (AI) chip market, seizing 80% share, and become a general AI powerhouse.

Nvidia isn’t about just AI chips anymore. The company sells an entire suite of products and services, from networking to enterprise software, to serve customers with AI projects.

All of this has helped Nvidia stock to soar in the quadruple digits over the past five years, and just this year, it’s heading for a gain of more than 160%. Nvidia shares may not rise in a straight line forever and have dipped at certain points this year — but the company still has plenty of fuel in the tank to power spectacular share performance over the long haul.

The stock could get a boost from news Nvidia announced just recently. My prediction is that this will be the company’s biggest move yet.

The ideal chip for AI tasks

Let’s review Nvidia’s path so far, just to get an idea of how powerful this company has become in the AI world. Nvidia started out primarily serving the video game market with its graphics processing units (GPUs) but progressively expanded the reach of these chips into other areas, including AI. The GPU’s ability to handle multiple tasks simultaneously make it the ideal chip for key AI tasks such as the training and inferencing of models.

Nvidia’s chips are the fastest around. Even though they’re also the most expensive, customers have flocked to the company. Part of the reason may be that customers, eager to win in the AI market, see working with the strongest products right from the start as the best way to reach that goal.

They also may agree with Nvidia’s Chief Executive Officer Jensen Huang on the following point: Nvidia’s chips, due to their high performance, will save customers time and make workflows more efficient, resulting in lower total cost of ownership over time. In the long run, Nvidia’s chips may represent the best bargain.

Here’s an anecdote to illustrate just how eager big companies are to get in on Nvidia. Recently, Oracle co-founder Larry Ellison said that he and Tesla chief Elon Musk “begged” Nvidia’s Huang to sell them more chips. Nvidia has struggled to meet the needs of these companies because demand for its chips has exceeded supply.

Now let’s consider Nvidia’s recent move, one that I predict could be its biggest. The tech giant expanded its partnership with Accenture (NYSE: ACN) — and as part of this, the latter formed the Accenture Nvidia Business Group. This is a team of 30,000 who will help clients jump-start their AI projects and scale the adoption of enterprise AI.

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Using the full Nvidia AI stack

As part of this, Accenture AI Refinery — using the complete Nvidia AI stack — will help clients reimagine their processes and even develop areas such as sovereign AI. The refinery will be found on all public and private clouds, making it easily accessible.

This can be particularly big for Nvidia because it expands the reach of this AI powerhouse even further. And this is in the context of soaring demand for AI from Accenture customers.

The consulting and professional services company said in its recently closed fiscal year that generative AI demand drove $3 billion in bookings, and $1 billion of that came in the most recent quarter. It’s also important to keep in mind that Accenture is a huge player, with clients in more than 120 countries — so it has significant reach.

This offers Nvidia yet another opportunity to grow its AI market share and further strengthen its reputation as the “go-to” company for AI products and services. All of this should equal another big wave of revenue growth.

That’s why I think this expanded partnership with Accenture will be Nvidia’s biggest move yet. It also makes this top AI stock a great player to buy now and hold onto for the long term to potentially benefit from gains to come.

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Adria Cimino has positions in Oracle and Tesla. The Motley Fool has positions in and recommends Accenture Plc, Nvidia, Oracle, and Tesla. The Motley Fool recommends the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool has a disclosure policy.

Prediction: This Will Be Nvidia’s Biggest Move Yet. was originally published by The Motley Fool

The term “Magnificent Seven” was coined by Wall Street last year to describe a powerful group of technology companies with a combined market capitalization of $15.7 trillion. The seven companies are:

1. Microsoft (NASDAQ: MSFT)

2. Meta Platforms (NASDAQ: META)

3. Nvidia

4. Apple

5. Amazon

6. Alphabet

7. Tesla

So far in 2024, these Magnificent Seven stocks delivered an average return of 40%, which is double the 20% gain in the S&P 500 index. That’s a key reason investors watch them so closely.

Corporate America is heading into a new earnings season for the quarter ended Sept. 30, which will give investors a fresh look at the financial performance of their favorite companies. Microsoft and Meta Platforms are due to release their results at the end of October, and here’s why it might be a good idea to buy shares in these two Magnificent Seven right now.

1. Microsoft

Few companies are better positioned to profit from the artificial intelligence (AI) revolution than Microsoft. The company invested $1 billion in ChatGPT creator OpenAI back in 2019 and followed that up with a new $10 billion partnership with the start-up early last year. Microsoft has used OpenAI’s latest AI models to create the Copilot virtual assistant, and it also offers those models to businesses on its Azure cloud platform.

Copilot is capable of answering complex questions and generating text content, images, and even computer code with a simple prompt. It’s now embedded in many of Microsoft’s flagship software products, such as Windows, Bing, and Edge. For an additional monthly subscription fee, it’s also available in 365, which includes Word, Excel, and PowerPoint.

During Microsoft’s fiscal 2024 fourth quarter (ended June 30), the number of corporate customers who purchased over 10,000 Copilot add-ons for their 365 subscriptions doubled from just three months earlier. Since there are more than 400 million paid 365 seats in the corporate sector worldwide, Copilot could become a substantial source of revenue if even a fraction of them sign up. Investors should watch for further updates on that front in the upcoming quarterly report.

But the Azure cloud platform will probably headline the report once again because it’s consistently the fastest-growing segment of Microsoft’s entire organization. Azure’s revenue increased by 29% year over year during the last quarter, and eight percentage points of that growth came from its AI services — that number increased eightfold from one percentage point in the year-ago period. Those services include providing data center computing capacity for AI developers and access to the latest large language models (LLMs), like OpenAI’s GPT-4.

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Microsoft stock is currently down 12.4% from its all-time high. It’s trading at a price-to-earnings (P/E) ratio of 34.7 as of this writing, which is a premium to the 31.7 P/E ratio of the Nasdaq-100 technology index. In other words, Microsoft stock looks slightly expensive relative to its big tech peers.

However, investors will be hard-pressed to find another company capable of monetizing AI through both consumers and businesses at such a large scale. Therefore, buying Microsoft stock at a discount to its all-time high might be a great move ahead of its upcoming earnings report, which should feature several AI updates.

2. Meta Platforms

Meta Platforms stock has been on a tear since hitting its bear-market bottom in October 2022. It’s up by a whopping 544% since then, and the company’s earnings have been a key part of that story. Meta CEO Mark Zuckerberg dubbed 2023 the “year of efficiency” and proceeded to slash costs across the entire company, driving a surge in its profitability, and that momentum carried into 2024.

Despite Meta spending heavily on AI infrastructure recently, it still managed to generate $13.4 billion in net income during the second quarter of 2024, a 73% increase from the same quarter last year. That propelled the company’s trailing-12-month earnings per share to $19.59 — an eye-popping 128% higher than in the prior 12 months.

Wall Street expects Meta’s upcoming third-quarter earnings per share to come in at $5.21, representing 18.6% year-over-year growth. The decelerating increase implies a focus on sustainable profitability without compromising important capital expenditures on its critical AI initiatives. To date, Meta has launched a number of AI features for users and advertisers on its social networks, Facebook, Instagram, and WhatsApp.

The Meta AI virtual assistant is accessible across all the company’s apps. It’s capable of answering complex questions, settling debates in your group chat, offering gift ideas, and even generating images. It lays the foundation for Meta’s upcoming Business AI tools, which will include virtual agents to handle customer queries around the clock without human intervention. Meta believes every business will eventually have a unique AI agent, which could unlock new revenue streams for the tech giant.

Meta’s AI features are powered by Llama, the LLM it developed in-house. The company is currently developing Llama 4, which is the latest version due for release next year. Zuckerberg thinks it will be so advanced that it could set the benchmark for the entire AI industry. Reaching that point won’t be cheap, though, with Meta planning to spend up to $40 billion on AI data center infrastructure this year and even more next year, which could impact its earnings.

With that said, Meta stock is trading at a P/E ratio of 30.3 right now, so it’s still cheaper than the Nasdaq-100 index despite its spectacular gain since 2022. That presents a great setup for investors heading into an exciting earnings report, which should reveal more information about the company’s AI opportunities and growth trajectory.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

2 “Magnificent Seven” Stocks to Buy Hand Over Fist in October was originally published by The Motley Fool

(Reuters) – U.S. stock index futures edged lower on Friday, ahead of the third-quarter earnings season kickoff, after hotter-than-expected September inflation data solidified expectations for a 25-basis-point rate cut by the Federal Reserve in November.

Shares of Tesla dropped 5.8% in premarket trading after the EV maker unveiled its long awaited robotaxi, but did not provide details on how fast it could ramp up production or deal with potential regulatory hurdles.

Major financial companies kick off the third-quarter earnings season later in the day. JPMorgan Chase and Wells Fargo slipped about 0.2% each ahead of their scheduled results before the bell.

With major indexes trading around record highs and the benchmark S&P 500 up over 21% year-to-date, third-quarter earnings will test whether 2024’s rally can be sustained amid uncertainty over monetary policy, geopolitical risks and the upcoming U.S. presidential elections.

Wall Street closed slightly lower on Thursday after a keenly watched Consumer Price Index report showed inflation rose higher than expected in September, but an uptick in jobless claims pointed to potential weakness in the labor market.

Still, bets on a 25-bps rate cut from the U.S. central bank in November remained intact, with analysts pointing to the impact of Hurricane Helene and an ongoing strike at Boeing as muddying jobless claims data.

“On the whole, there is relatively little in the data that is likely to dispel the FOMC’s confidence in inflation returning towards the 2% inflation target over the medium term,” said Michael Brown, senior research strategist at Pepperstone.

Traders are pricing in a roughly 84% chance of a 25-bps reduction at November’s meeting and see a slight chance – about 16% – of no change at that meeting, according to CME’s FedWatch.

On the other hand, Atlanta Federal Reserve President Raphael Bostic said he was open to keeping rates unchanged next month.

Also on deck are Producer Price Index data and the University of Michigan’s consumer sentiment survey, as well as speeches from Fed officials Michelle Bowman, Lorie Logan and Austan Goolsbee through the day.

At 5:00 a.m. ET, Dow E-minis were down 48 points, or 0.11%, U.S. S&P 500 E-minis were down 12 points, or 0.21% and Nasdaq 100 E-minis were down 69.75 points, or 0.34%.

U.S.-listed shares of Chinese companies lost ground ahead of a closely watched fiscal stimulus update from Beijing on Saturday. Among them, JD.com lost 3%, Alibaba Group dipped 1.8% and PDD Holdings fell 2.7%.

(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)