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AI Technology Revolution

The AI revolution first began during 1980-1987 in the form of the first version of an AI program often referred to as “expert systems.” Many companies acknowledge the significance of this new technology, which later became the focus of mainstream AI research.


The explosive earnings outlook from NVDA and the rapid acceleration in the development and accessibility of artificial intelligence tools suggests the arrival of the AI technology revolution. The adoption of AI is not in the future but right now. The gold rush on the acceptance of AI technology is now spurring an AI arms race.


AI is one of the most transformative technologies of our time, and it may be the next step in human evolution. As AI technology and renewable energy become increasingly advanced and effective, their collective force will impact almost every facet of our lives and disrupt every industry.


The NVDA’s record-breaking forecast of $11 billion in quarterly sales, up 64% from a year earlier, led to the one-day surge of 74.28 points or 24.32% as the chip maker approaches a $1 Trillion valuation. NVDA has gained 169% so far this year. It is the best performer in the S&P 500 Index this year. NVDA has also significantly outperformed the leading Nasdaq Composite Index’s 21% yearly gain.


Nasdaq Composite Index (COMPQ +1.71% daily gains) and the Nasdaq 100 Index (NDX +2.46%) posted their best days in three weeks as chip giant Nvidia’s blowout guidance boosted the S&P Technology sector (XLK +3.84%), including the Semiconductor Index (SOX +6.81%) and AI ETFs (BOTZ +3.02%, ROBO +1.53%, IRBO +0.84%, and ROBT +1.22%).


S&P Technology (XLK) retains its leadership roles against the stock market (SPY +8.84% YTD) with year-to-date returns of 29.04%, followed by Communication Services (XLC +27.29%) and Consumer Discretionary (XLY +15.31%). The other eight S&P sectors (XLE -8.65% YTD, XLU -7.71%, XLF -6.41%, XLV -5.57%, XLRE -3.76%, XLB -1.92%, XLP -1.37%, and XLI -0.20%) continue to underperform SPY, suggesting the continuation of a narrowed market breadth.


The lack of broad market leadership in the stock market also shows up within the S&P Technology sector (XLK) as four of the eight Technology subindustries have significantly outperformed (Dow Jones Semiconductor – DJUSSC +49.96% YTD, Computer Hardware – DJUSCR +31.53%, Software – DJUSSW +30.95%, and Renewable Energy Equipment – DWCREE +29.86%) and four underperformed (Computer Services – DJUSDV -5.17%, Electronic Equipment – DJUSAI -4.54%, Telecommunication Equipment – DJUSCT +4.07%, and Electrical Components and Equipment – DJUSEC +5.40%).


The Relative Rotation Graph (RRG) also reaffirms Software and Computer Hardware as industry leaders, as both remain in the Leading Quadrant. Although both technology indexes have outperformed technology peers, they have been losing relative momentum in recent weeks, suggesting the potential for consolidations. Semiconductor and Renewable Energy Equipment also remain in corrective phases within the Weakening Quadrant, showing declining relative momentums.


The popular and larger AI-related companies include AAPL, MSFT, GOOGL, AMZN, NVDA, META, IBM, TSM, INTC, ASML, SAP, CRM, ANET, BIDU, BABA, SAP, and NOW.

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

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