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April 5, 2024, 1:25 a.m.
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Brief news summary

Investors looking to benefit from the artificial intelligence (AI) boom should consider diversifying their portfolios beyond Nvidia, according to hedge fund billionaire Dan Loeb. While Nvidia is a strong company and a leader in AI hardware, its current valuation may be too expensive for market-beating returns. Instead, Loeb suggests considering other AI stocks, such as ServiceNow, which is a leader in workflow digitization and automation. ServiceNow's platform addresses various use cases and has been recognized for its leadership in IT service management, IT operations management, low-code application development, and more. The company has shown strong financial performance, with accelerated growth in revenue and a high customer renewal rate. With tailwinds from digital transformation and generative AI, Wall Street expects ServiceNow to grow sales at 20% annually over the next five years, making its current valuation more reasonable for investors with a long-term perspective.

Nvidia is considered a top AI stock, but investors should diversify their portfolios to mitigate risks. Hedge fund billionaire Dan Loeb believes AI is comparable to the industrial revolution and expects it to drive a significant increase in productivity across various industries. While Nvidia is a leading company in AI with its powerful chips, investors should also consider other AI stocks such as ServiceNow. Though Nvidia has delivered impressive financial performance and is expected to benefit from the growing AI market, its current valuation of 36. 6 times sales is viewed as expensive.

ServiceNow, on the other hand, is a leader in workflow digitization and automation and has received recognition for its products and services. It has achieved strong financial results with an increasing sales pipeline momentum. ServiceNow is well-positioned to benefit from the digital transformation trend and offers generative AI tools to automate tasks and enhance productivity. With a projected annual sales growth rate of 20% over the next five years, ServiceNow's current valuation of 17. 4 times sales is considered acceptable for investors with a long-term perspective.


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