Ladner: The story with NVIDIA is really about how much of the economy is adopting AI

Scott Wagner, Horizon’s Chief Investor, discussed NVIDIA’s role in the broader adoption of AI across various sectors, highlighting its positive impact on productivity and economic growth. He expressed optimism about the tech sector and identified appealing investment opportunities in energy and home builders, while advising caution regarding investments in China and deep cyclical sectors.

In a recent discussion, Scott Wagner, Horizon’s Chief Investor, shared insights on NVIDIA’s impact on the broader economy and stock market. He emphasized that the significance of NVIDIA extends beyond its daily stock performance; it reflects the wider adoption of artificial intelligence (AI) across various sectors. Wagner noted that the earnings reports from NVIDIA indicate a positive trend in AI implementation, suggesting that many companies are beginning to invest in and utilize AI technologies to enhance their operations.

Wagner highlighted the importance of measuring productivity through the metric of revenue per worker, which he believes is a key indicator of economic growth. He acknowledged that measuring overall productivity can be challenging, but revenue per worker provides a clearer picture. He drew parallels to the 1990s when a significant increase in productivity coincided with the rise of the internet, suggesting that a similar uptick in productivity could be on the horizon with the current AI revolution.

The conversation also touched on NVIDIA’s recent financial performance, noting a slight decrease in losses per share. Wagner expressed optimism about the tech sector, asserting that it remains a crucial area for investment. He likened the current AI trend to the PC boom of 25 years ago, indicating that investors should position themselves to benefit from this technological shift.

In addition to technology, Wagner mentioned other sectors he finds appealing, such as energy and home builders. He believes that energy stocks possess political hedge characteristics that could prove advantageous, while home builders are well-positioned to benefit from an anticipated rate cut cycle, making them a favorable investment choice.

Conversely, Wagner advised caution regarding investments in China and deep cyclical sectors, suggesting that these areas may not be as promising in the current economic climate. Overall, his insights reflect a bullish outlook on AI and technology while identifying specific sectors that could thrive in the evolving market landscape.