Constructive Interference: Ride These Waves to Huge Profits!

Tech investing is a little like surfing.

You want to catch a wave at just the right time… so you can enjoy a glorious ride to shore.

Investing in a wave of technology at the right time can also be a wonderful thing.

We don’t want to waste time on a barely discernible swell… We want to wait patiently and get on the board and push ahead when we see one start to shift into a steep-cresting wave beneath us.

Then we ride that wave of profit all the way to shore.

What we’re seeing with Nvidia is the perfect example, but it isn’t the result of a single wave.

A Tidal Wave of Success

It’s the result of multiple waves interfering with one another.

When waves are in phase, they constructively interfere, amplifying each other, making bigger, stronger waves.

Every time I see Nvidia’s CEO Jensen Huang walk out on the stage in a leather jacket with a hot new chip in his hand, I see a surfer-in-chief expertly guiding his company to keep it perfectly positioned on a huge wave on its way to a high crest.

Right now, NVDA is riding a rogue wave of success:

  1. The company is capitalizing on its superior graphics technology to maintain market and technological leadership of the large and growing computer gaming industry.
  1. These same GPUs are positioned for a perfect storm of demand as virtual reality, with its more stringent graphics requirements, takes off.
  1. Nvidia graphics processing units, originally the first of their kind, have become the foundation for a tsunami of artificial intelligence and deep-learning applications.
  1. Nvidia’s Drive PX platform shows that they are becoming the semiconductor brains of the self-driving car of the future.
  1. Lastly, out of the blue, Nvidia was in the right place at the right time to make bank on the cryptocurrency craze.

Nvidia GPUs have been flying out of production and will never see the inside of a tricked-out gaming PC.

They are being drafted for turning clock cycles into crypto cash as Wall Street hedgies decide there’s no time to waste in turning bits into billions.

Nvidia keeps beating the Street, growing revenues from these multiple emerging technological waves… and returning higher gains for us.

The Self-Driving Wave Pushing Other Tech Stocks to Big Gains

While Nvidia is the year’s best example of a tech company profitably riding a wave of innovation, it isn’t the only one.

Other chipmakers are just as eager to jump into the autonomous tech space. But even if other chipmakers are just runners-up to Nvidia, it doesn’t mean they can’t benefit.

These waves are big enough to lift many boards. Take a look at six major chip maker’s share value over the last four months:

Top Six Chip Makers chart

Opportunities for new partnerships are springing up everywhere, giving us a strong indication that there is more than enough space for multiple success stories.

For example, high-tech electric car company Tesla is desperate to stay in the autonomous car race.

The rest of the auto industry is playing catch-up to the innovative automaker in many areas, but the gap is closing quickly. For Tesla to remain a leading premium brand, it has to maintain its edge or risk looking like everyone else.

This need is fueling its recent push to develop its own artificial intelligence chips for self-driving cars.

Tesla developing its own AI chips creates a need for both CPUs and GPUs. Nvidia, however, specializes in GPUs specifically. Reports indicate Tesla will not turn to Nvidia for their chip needs and in fact will rely on another manufacturer to meet its elevating needs.

The moral of the story is that Nvidia, while still the undisputed “King of Chipmakers,” is not going to be the only success story in this space.

The need for more processing power and ever-increasing versatility is going to open up huge windows of opportunity for many chipmakers. The ones able to carve out their own slice of the autonomous tech market stand to pay off significant gains.

For Tomorrow’s Trends Today,

Ray Blanco
for The Daily Reckoning

The Daily Reckoning