Huang dumped as markets flirt with ANT

Microsoft is about 4.1% of the MSCI World Index (collection of the world’s largest companies). Yet despite their colossal status, some engineer is having a shocker today. And Nvidia. It’s ironic that this company, which represents the future and argues that nothing will ever be the same again, has been wounded by one man’s arrogance which follows a narrative as old as time.

Older guy gets a bit giddy with power and forgets his thinning hair and paunch, believing he's the CEO of Hotsville as well as the Boardroom. Hmmm. Maybe, just maybe, AI won’t change our world beyond all recognition?

Nvidia has lost about $500 billion in value this week, based on share price movements. Which, at $250 billion per tryst, probably clocks up those alleged dalliances as the world’s most expensive boinks in history?

As for the long-term financial damage, the jury is out. Most believe that the near-term outlook remains good, but the CEO and legal risk are a big black cloud. Others see the share price fall as a buying opportunity. I don’t need to buy any more – I have big slug of my savings in the iShares MSCI World ETF and Nvidia is already about 5.8% of this. Enough!

Anthropic lists

Next week, the spotlight will shift to another huge name. Anthropic. Their IPO (Initial Public Offering) means that Joe Public will be able to buy and sell its shares with the identifier ('ticker') ANT from next Thursday. Is it worth buying into this?

Yesterday, I hosted a one hour webinar with Richie Vernon, an investment specialist at Baillie Gifford. The question was – Where Next For Growth? The first question we tackled was about Anthropic.

Baillie Gifford already own a bit of this AI giant privately. They bought in this May, at a $965 billion valuation. On Thursday next week, estimates are that its valuation will be anywhere to $1.3 trillion to $1.5 trillion plus. Not bad gains over 5 months. I asked Richie how you value a company like this.

If you're interested in participating in the IPO, this quick guide will walk you through the hows and wheres. So… Am I having a go?

I will have a play. Not too much. It’s speculation more than investing – I’m clear on this. I’m backing the fact the retail investors will jump in on this, driven by FOMO, and that huge demand and human psychology could see the stock do well on launch, whatever it does in the months thereafter. Any valuation involves a dollop of guesswork, so I’m doing this with small sums which won’t rock me if I lose them. I wouldn’t do this with savings for the kids’ school fees or for a new kitchen.

But there are other games in town

Notwithstanding my planned dabble, there are certainly other games in town. May I observe the humble brown cardigan-wearing FTSE 100, which has been having a very solid run. We can see this returning to favour in the best-selling ETFs on retail platforms in October.

Richie is positive on AI and doesn’t think it’s a bubble, but also sees opportunity in health and financials, as well as selected ecommerce and software firms. He points to stocks like Shopify, Mastercard, MercadoLibre and Games Workshop as examples of great companies, making money from innovation, customer demand and humans’ insatiable thirst for Warhammer miniatures! You can dip into the full webinar on catch-up here.

I’ll leave you with a powerful thought to consider. About £3 in every £10 of the average investor’s portfolio will be exposed to the AI build out story. This is the spending on the picks and shovels – the chips and data centres powering the growth.

But this is where 70% of the growth in the ‘MSCI ACWI Index’ is forecast to come from in 2027. (The ACWI is the All Country World Index which also includes emerging markets, covering 47 countries and not the less diversified 23 countries of the MSCI World Index).

Big? Yes. Concentrated? Yes. But with room to grow more? Also, yes.

I'm running out now for a lunchtime dip in the sea. Frost on the ground and the sun on my face. Eat that, AI! Have a lovely weekend, everyone.

Holly