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Shares of Nvidia, Taiwan Semiconductor, and Alphabet have experienced significant gains, driven by robust earnings and leadership in the AI sector. Notably, Nvidia’s third-quarter earnings surged 60% to $1.30 per share, Taiwan Semiconductor’s earnings rose 39% to $2.92 per American depositary receipt (ADR), and Alphabet’s earnings jumped 35% to $2.87 per share.
Despite concerns about a potential AI bubble, industry leaders like Sam Altman of OpenAI acknowledge the over-excitement surrounding AI investments. A gradual deflation rather than a sudden collapse may be more likely, potentially making these profitable companies better positioned to withstand market fluctuations compared to their less profitable peers.
Investors are advised to monitor company profitability and consider diversifying their portfolios to mitigate risks associated with speculative AI stocks. If a decline occurs, it might present an opportunity to invest in strong performers like Nvidia, Taiwan Semiconductor, and Alphabet.
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