Don’t Let Nvidia’s Earnings Report Distract You From the Bigger Picture

Colin’s Note: Just one hour remains until one of the most highly anticipated earnings announcements in tech is set to release…

In today’s issue, I’m talking about Nvidia’s fourth-quarter earnings report.

Or rather, I’m talking about how whatever is on that report isn’t actually all that important on a grander scale.

Despite its influence over the tech industry and the markets as a whole… Nvidia’s earnings report today will only serve to potentially distract you from the bigger picture.

The artificial intelligence megatrend is just getting started.

The reality is that Nvidia’s earnings will only reinforce one of two emotions – fear… or greed. And allowing yourself to be swayed by either will always get in the way of making the right decisions for your wealth.

I get into it all in today’s video. You can access it by clicking below…

Hello everyone. Welcome back to The Bleeding Edge.

Today we get an update – a report card, if you will – from a company that has launched artificial intelligence into one of the best-performing investment ideas over the past several years.

Today, Nvidia will report its company earnings.

In fact, by the time you get this newsletter, the chipmaker will have likely already reported its Q4 earnings.

Now, as someone like me who follows companies like Nvidia very closely, I’ll be sure to be around my computer when the company announces its results later today, but I’m here to tell you that the results aren’t important at all.

Nvidia’s earnings will be a big distraction if you listen to all the commentary that’s going to follow.

That’s because Nvidia’s results will reinforce one of two emotions… and those emotions always get in the way of investors making good financial decisions – fear and greed.

On one hand, if Nvidia reports great earnings, every investor who has piled into the shares of the past year will be flexing their greed muscle saying, “I told you so. I told you Nvidia could go higher and it’s just going to keep going up.”

Now, the opposite is probably equally as likely – maybe even more likely. Nvidia doesn’t meet the lofty expectations and the artificial intelligence (“AI”) bubble fearmongering will take center stage.

With Nvidia overtaking Tesla more recently as the most traded stock, that means there’s no avoiding the conversation around today’s earnings reports. Every financial news network will be covering this stock because it’s now the most traded one, and there’s no better way to get people to pay attention than to use fear and greed to draw you in.

But it’s all a distraction. It’s a sideshow.

I’m kind of a professional in this, right? I spent my years making websites and doing YouTube.

That’s where you’re constantly making clickbait titles, clickbait thumbnails, and clickbait articles just to, well, bait people to click. And you’re often using fear or greed to draw them in.

But as an investor sitting here, it’s much more important to stay focused on the longer-term trend. That’s how you’re going to make the most money. Remember, the AI megatrend is playing out exactly like the build-out of the internet and the personal computer revolution.

Every technology trend plays out the same way. It starts with hardware, then it goes to software, and then you look around – like the internet, like personal computers, like cell phones, like social media – it’s everywhere.

Imagine if you stopped investing in the internet when the hardware build-out was nearly complete. Once Cisco and all the modems and personal computers were in homes and schools… and high-speed internet was more widely available.

Imagine if, at that point, you stopped investing in tech stocks.

You would’ve missed Google, Apple, Amazon, Netflix, Uber, and many of the best-performing stocks over the past 25 years. Think about that.

If you stopped investing in tech stocks, when the tech bubble burst in the early 2000s, you would’ve missed a chance to make a fortune.

That’s because the hardware phase is just the start of a technology revolution. And the hardware phase is usually in a bubble. And that’s where we sit with Nvidia today.

One day – and it could be today – Nvidia’s revenues will disappoint. Competition will start to eat away at its profit margins. The pundits on CNBC, in newsletters, and on TV are going to say the AI bubble is bursting.

But history proves with technology that it’s just the beginning. Research firm Gartner said this week that AI chatbots like ChatGPT will cause a 25% drop in search engine volume by 2026.

A shift is already underway. Just like how we shifted from library books to internet searches… from just surfing the web to posting our own lives and photos onto social media… we are in the midst of a new technological shift. Internet search… click and read. Now we’re going to use chatbots to deliver the information to us.

These technology shifts have happened before. Early internet sites like Yahoo and pets.com paved the way for Google and Amazon. Early social media sites like AOL and Friendster paved the way for Facebook, Twitter, and Instagram.

Nvidia’s success over the past year is simply the building blocks of something much, much bigger.

Last week I shared with you how AI video and text-to-speech are going to revolutionize entertainment and Hollywood and medical advances using patient data as it relates to sepsis. Major technology breakthroughs in robotics are coming.

This is all just the beginning, and in some ways, the end of Nvidia being a high-flying stock would be the signal of that. That was The Bleeding Edge for today. Hopefully, you guys have a wonderful week. I’ll see you again later.

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