Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Will NVDA Crash the Market?

Companies / Nvidia Jun 16, 2024 - 07:10 PM GMT

By: Stephen_McBride

Companies I recently had an important talk with my Executive Editor Chris Reilly about Nvidia’s (NVDA) huge influence on the stock market.

Can this once-in-a-lifetime company continue to propel markets higher… or is the stock market now topping out?

Our transcribed conversation follows.

Chris Reilly: Stephen, Nvidia just became the second-largest company in the world.

It’s currently worth over $3 trillion... surpassing Apple (AAPL)... and now right behind Microsoft (MSFT) for the #1 spot.

It’s up 140% this year as we speak—after soaring 240% in 2023.

“Dominant” doesn’t begin to describe it.

Stephen McBride: We’re part of history. We’ve never seen this rapid growth from a multitrillion-dollar company before. Nvidia’s artificial intelligence (AI) chip sales have quintupled in a year. It’s been a fun ride being in Nvidia since 2018.

Today, I want to talk about caution, though. Because some of the behavior I’m seeing around Nvidia has me concerned.

Did you see the viral picture of CEO Jensen Huang signing a woman’s chest like he’s a rockstar? 

Chris: Yes. And I remember you said if Nvidia became the world’s largest company, it would be a potential top signal.

Stephen: Right, I first said that one year ago. At the time, NVDA was nowhere near #1—not even one-third the size of Apple.

I said, “Nvidia claiming the crown as the world’s largest company seems unlikely, but anything is possible as the AI boom heats up.”

Here we are a year later, and it’s now looking probable.

Everyone is talking about NVDA. Many are raving about the stock. Generally speaking, you don’t want to buy stocks that taxi drivers and baristas are raving about.

Chris: So you’re saying Nvidia has topped out?

Stephen: No, I’m saying investors’ behavior around Nvidia has me cautious. This is an important distinction.

Nvidia the company has done nothing but deliver. It continues to produce incredible results that will be legendary.

As my partner Chris Wood said in our recent Disruption Investor issue, “What’s interesting is that the stock still isn’t all that expensive when you consider its earnings growth. My model shows NVDA could double from here in the next two to three years pretty easily. So it’s still a good buy today for folks who don’t own it yet.”

Chris: Have you seen the comparisons to Cisco Systems (CSCO) from the 1999 dot-com bubble? Nvidia’s trajectory looks a lot like Cisco’s. Cisco eventually crashed.

Stephen: Yes. It’s an embarrassingly shallow analysis. Cisco sold tech equipment to new dot-com companies that could barely afford it and ran on borrowed money. When the bubble popped, many of its customers disappeared.

Nvidia sells to Apple, Google (GOOG), and Amazon (AMZN)… the richest companies in the history of Earth.

Stephen McBride
Chief Analyst, RiskHedge

To get more ideas like this sent straight to your inbox every Monday, Wednesday, and Friday, make sure to sign up for The RiskHedge Report, a free investment letter focused on profiting from disruption.

Expect smart insights and analysis on the latest breakthrough technologies, the big stories the mainstream media isn't reporting on, and much more... including actionable recommendations.

Click here to sign up.

© 2024 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in