One month ago, I’d never heard of RC365 (LSE: RCGH) stock. It seemed to come out of nowhere to be hailed as the next big thing in artificial intelligence.
I’ll admit that I’m sceptical. Usually when stocks come out of the blue like this, they tend to disappear just as fast as they came.
But I’m also curious. I’d like to know what’s going on here, and if, as has been claimed, RC365 really has a chance of being the next Nvidia (NASDAQ: NVDA).
To start with, as pointed out here at The Motley Fool, it seems the hype has been built through a few articles that have done the rounds. I tracked one down to see what it said.
Here are a few choice quotes:
Nvidia, for instance, soared from £0.40 to over £400, resulting in gains of around 100,000% on the stock market.
Had you invested £5,000 and retained your shares, you would be sitting on approximately £50,000,000 today.
It seems the claim is that RC365 might enjoy returns like the above.
I’ll point out that the above gains, while true, are a little idealised. To get those returns, I’d have had to have picked Nvidia way back in 1999, timed it perfectly so I invested at the bottom, then held the shares for 24 years without selling. That’s a pretty big ask.
A £10trn industry
Also, it’s only a few, rare stocks that grow like this. Still, RC365 could be one of them, so I’ll give it the benefit of the doubt for now. Next quote:
According to market forecasts, the global AI industry is poised to reach unprecedented heights, with a projected market value of over £10 trillion in the near future.
This is another claim that’s based in fact. Some estimates do say AI will be worth that much and Nvidia’s stock has skyrocketed because of it.
But Nvidia designs powerful GPU chips, the best ones in their class. They’re used for around 95% of machine learning. So, is RC365 doing something of similar importance?
The company’s groundbreaking use of artificial intelligence (AI), RC 365 is revolutionising the way businesses operate in the digital era.
These are big words, but we’re quite short on details.
I did a little digging, and I’m not convinced RC365 uses AI much, if at all. Having combed through its last two reports and its own description on its website, I can’t find a single mention of artificial intelligence. AI, or anything like it.
AI in absentia
Surely, a company that was going to take the AI world by storm would have it front and centre of its reports? Or, at least, would mention it once or twice?
Compare this with Palantir, a company that has a proven business model in the AI space. It can’t stop mentioning artificial intelligence on its website and in reports.
The story here is, I suspect, one of hype. That’s not to say RC365 is a bad company and it could have lots of potential. But the claims that have been made about it don’t stand up to scrutiny, I feel. And it has no chance I can currently see of being the next Nvidia!
