One of the best aspects of putting your money to work on Wall Street is that most online brokers have eliminated barriers that had previously kept retail investors on the sideline. Minimum deposit requirements and commission fees for common stock trades on major U.S. exchanges are predominantly a thing of the past.
For everyday investors, it means virtually any amount of money — even $300 — can be the perfect amount to put to work in the stock market.
Image source: Getty Images.
While it might sound tempting to invest $300 in the hottest stock on Wall Street, artificial intelligence (AI) kingpin Nvidia (NASDAQ: NVDA), there are three unstoppable stocks that make for much smarter buys right now.
Four reasons investors can safely pass on Nvidia
Despite Nvidia’s AI-graphics processing units (GPUs) absolutely dominating in high-compute data centers, there are a number of reasons to believe the company’s stock has peaked and will underperform in the years to come.
For example, there hasn’t been a next-big-thing innovation for at least three decades that’s avoided an early innings bubble-bursting event. Without fail, investors consistently overestimate the adoption and utility of new technologies and innovations, which eventually leads to real-world results falling short of otherworldly expectations. If artificial intelligence follows this path, no company is going to be hurt more than Nvidia.
Another expected headwind for Nvidia is an increase in competition. While it’s well-documented that other chipmakers are ramping up production and/or debuting AI-GPUs for AI-accelerated data centers, investors are likely overlooking the prospect of internal competition. All four of Nvidia’s top customers by net sales are developing AI-GPUs of their own, which will undoubtedly limit future orders for the company’s hardware.
Insiders aren’t giving investors a reason to buy, either. Nvidia’s recently unveiled $50 billion buyback program, or as I refer to it, the “smoke-and-mirrors campaign,” doesn’t hide the fact that it’s been 45 months since a single share was purchased by an insider…
..
