Nvidia is one of the hottest artificial intelligence (AI) stocks on the market, but investors should diversify their portfolios.
Hedge fund billionaire Dan Loeb compared artificial intelligence (AI) to the industrial revolution in a letter to clients written last year. The industrial revolution was a characterized by a dramatic increase in economic output as machines replaced human workers. AI promises a similar step-function increase in productivity across virtually every industry.
Loeb wrote, “We have watched AI evolve and believe the technology has matured to the point that it is driving a transformational technology platform shift similar to those seen roughly once per decade: the personal computer in the 1980s, internet in the 1990s, mobile in the 2000s, and cloud in the 2010s.”
That puts investors in front of a big opportunity. The most prudent way to benefit is to own a basket of AI stocks. Many investors will naturally gravitate toward Nvidia(NVDA 2.45%), the company whose chips power the most advanced AI systems. But ServiceNow(NOW 3.43%) is a more compelling AI stock at its current price.
Nvidia is a wonderful company, but the stock looks expensive
Nvidia’s graphics processing units (GPUs) are the gold standard in accelerating complex data center workloads like artificial intelligence (AI). The company consistently achieves record-breaking results at the MLPerfs, objective benchmarks that measure the performance of AI hardware and software. Additionally, The Wall Street Journal reports that “Nvidia’s chips underpin all of the most advanced AI systems, giving the company a market share estimated at more than 80%.”
Nvidia delivered an astounding financial performance in the fourth quarter. Revenue soared 265% to $22.1 billion on triple-digit sales growth in the data center, driven by strong demand for AI solutions. Meanwhile, non-GAAP (generally accepted accounting principles) net income jumped 486% to $5.16 per diluted share as gross margin expanded over 10 percentage points, driven by pricing power and a scaling software business.
Going forward, Grand View Research estimates that AI spending will increase at 37% annually through 2030. Nvidia will undoubtedly benefit from that tailwind. Indeed, Wall Street expects the company to grow sales at 27% annually over the next five years. But that consensus estimate makes its current valuation of 36.6 times sales look expensive.
To be clear, I am not recommending that investors sell Nvidia. It is a wonderful company with a history of cutting-edge innovation and excellent future growth prospects. But I am skeptical about its ability to deliver market-beating returns for shareholders from its current price. So investors should consider other AI stocks (like ServiceNow) at the present time.
ServiceNow is a leader in workflow digitization and automation
ServiceNow helps businesses digitize and automate workflows across departments. Its platform addresses four primary use cases:
Technology workflows like IT service and IT operations management
Customer workflows like field service and customer service management
Employee workflows like human resources
Creator workflows like software development and process automation
ServiceNow is best known as a leader in IT service management, but consultancy Gartner has also recognized its leadership in IT operations management and artificial intelligence (AI) for IT operations. Similarly, Forrester Research sees the company as a leader in low-code application development, customer service solutions, digital process automation, and risk management platforms. Those commendations tell investors ServiceNow is doing something right, but they also cue potential customers in to compelling products.
ServiceNow printed strong financial results in the fourth quarter. Total revenue rose 26% to $2.4 billion, marking the fourth straight quarter in which growth accelerated sequentially. That trend may continue in the future because remaining performance obligation (RPO), which measures momentum in the sales pipeline, actually increased more quickly than revenue. Specifically, RPO rose 29% to $18 billion in the fourth quarter.
Meanwhile, non-GAAP operating margin expanded about 150 basis points, and adjusted net income climbed 36% to $3.11 per diluted share. That reflects disciplined expense management. ServiceNow also achieved a renewal rate of 99% in the fourth quarter, up from 98% in the prior year, implying a high degree of customer satisfaction.
ServiceNow has tailwinds in digital transformation and artificial intelligence
Going forward, digital transformation (DX) should be a significant tailwind for ServiceNow. International Data Corp. estimates that DX spending will compound at 16% annually through 2027 as businesses digitize all manner of processes to improve efficiency. ServiceNow is ideally positioned to benefit from that secular trend, given its leadership in numerous relevant markets.
Additionally, generative AI should also be a significant tailwind. ServiceNow became one of the first software companies to make generative AI available to its customers when it introduced Now Assist last September. Now Assist is a suite of tools that can automate tasks and improve productivity across IT service, customer service, human resources, and development teams. Bloomberg Intelligence estimates that generative AI software revenue will increase at 58% annually through 2032.
ServiceNow CEO Bill McDermott commented on those tailwinds during the most recent earnings call:
What we have here is a strong, durable market being supercharged by a once-in-a-generation secular trend. ServiceNow has been investing, innovating, and preparing for this wave for years, which is why we’re catching it so early. Artificial intelligence is injecting new fuel into our already high-performing growth engine.
With that in mind, Wall Street expects ServiceNow to grow sales at 20% annually over the next five years. In that context, its current valuation of 17.4 times sales is tolerable. Investors with a five-year time horizon should feel comfortable buying a small position in this growth stock today.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
