Typically, growth stocks are a tough investment when economic growth has become slow and uncertain. The lofty valuations and predictions that look attractive in a bull market don’t look as good when the economy is likely to contract.
However, some growth companies are able to position themselves for winning trends, even in a slowing economy. And those that can deliver could be the first stocks to make new all-time highs when things look rosy again.
Right now, one bright spot in the growth space is in artificial intelligence (AI). From big tech giants to software companies, investments in the technology seem to be paying off.
Now, graphics processing company Nvidia (NVDA) is making a bet on it too, with the announcement of a series of partnerships and products to enable the latest version of AI tech.
The announcement moved shares higher. And over the past few months, the company has erased most of its losses, with shares now down less than the S&P 500.
Action to take: We’ve liked shares at lower prices. But Nvidia is starting to become the dominant hardware player for a number of up and coming technologies. That makes shares a buy at current prices, or on any meaningful dip for the foreseeable future.
For traders, it’s likely that the current uptrend will continue. The June $290 calls, last going for about $15.75, offer mid-double-digit returns in the coming months on a further rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.