How long can the AI created myth of the U.S. stock market last?

Mondo Finance Updated on 2024-02-27

Since the beginning of 2024, the Dow Jones, S&P 500 and Nasdaq, the three major indicators in the United States, have repeatedly hit new highs and repeatedly refreshed historical records. By the end of last week, the Dow Jones Industrial Average was up 130% at 3913153 points;The tech-heavy Nasdaq Composite Index rose 140% at 1599682 points;The S&P 500 rose 166% at 508880 points. Overall, driven by several consecutive weeks, U.S. stocks have risen by more than 5%. As a result, many investors are betting that U.S. stocks will continue to rise this year. But at the same time, there is no shortage of investors and analysts in the market who are bearish on US stocks.

After the market on February 21, local time, Nvidia released its financial report, which is one of the most anticipated financial reports by investors in recent years. In terms of overall performance, in the fourth quarter of fiscal year 2024, Nvidia achieved revenue of $22.1 billion, a year-on-year increase of 265%, and the single-quarter revenue was higher than that of the whole year of 2021;The gross profit margin was 76%, and the net profit was US$12.3 billion, a year-on-year increase of 769%. This means that the company's revenue and profit have reached record records for three consecutive quarters.

This round of speculation in the United States' leading artificial intelligence concept stocks has contributed a lot. In January and February, 38% of S&P 500 companies mentioned AI in their quarterly earnings meetings, a slightly higher percentage than in the quarter to the end of June. At that time, AI had become a prominent industry and market theme, and Nvidia was the biggest winner of AI concept stocks. Driven by NVIDIA's extraordinary performance, global investors have set off a new round of pursuit of technology stocks, and chip and technology stocks in the United States have risen sharply. Nvidia's blowout profits not only boosted the stock price, but also convinced the market that the AI boom is still booming. In recent weeks, companies such as Supermicro and Arm have seen significant share prices. The heat wave has even spread to the Asia-Pacific region. Driven by NVIDIA, on the 22nd, Japanese and South Korean chip stocks rose sharply, with SoftBank Group rising more than 5% and SK hynix rising nearly 4%.

In addition to Nvidia, there was another private company that pushed the United States *** last week.

Last Friday (February 23), local time, the stock price of Intuitive Machines, an American space exploration company, soared by more than 40% intraday, with a market value of slightly more than $1 billion. The day before, an unmanned spacecraft developed by the company called "Odysseus" successfully landed on the surface of the moon, which is the first time that an American spacecraft has landed on the moon in more than 50 years, and it may also be an important step for the space industry. Intuition Machines went public through SPAC a year ago, but its share price slipped steadily to near all-time lows of around $2 in January. Due to the exciting preparation and progress of the IM-1 mission, the company's **has been** over the past month. Tim Crain, the company's chief technology officer and IM-1 mission director, said in the company's mission control center: "Odysseus has found his new home. ”

With the continuous development, the price-earnings ratio of the United States has also "risen". According to Reuters, the S&P 500 is currently trading at a price-to-earnings ratio of around 21 times, while the historical average is around 157 times. In an interview with Reuters, Peter Tuz, president of Chase Investment Advisors, said that the S&P 500's price-to-earnings ratio of more than 20 times is a bit high. Other analysts pointed out that artificial intelligence has officially pushed the U.S. technology industry into a bubble, and Silicon Valley may be on the verge of another crash, especially after Nvidia reported earnings results that exceeded market expectations, such voices are turning from weak to strong.

In an analysis released last week, DH** Al Joshi, chief strategist at global economic analysis firm BCA Research, calculated that technology stocks are currently trading at a 75% premium to the global market. Its red-hot growth became the backbone of much of the other growth in the U.S. and pushed the Nasdaq near its all-time high last year, just 6. below its all-time high in November 20215%。Josh said while these increases are impressive and rewarding for savvy investors, they are not sustainable. In his view, the overpricing of the market reflects the productivity gains brought about by this new technology. When new innovations fail to meet these expectations, the market will penalize the companies that make them.

JPMorgan quantitative strategists said that the recent dominance of the top 10 in the United States has further strengthened, increasingly similar to the "dot-com bubble", and this sign increases the risk of a sell-off. In fact, there have been many times in the history of U.S. equities that when a certain sector stock reached an all-time high in the S&P 500, a sharp sell-off followed.

Jeremy Grantham, co-founder and chief investment strategist at asset management firm GMO, is also one of the representatives of bearish US stocks. Recently, Grant warned in an interview that the United States is now ridiculously high and likely to be in trouble. He believes that the concept of artificial intelligence, which is now being hyped by the market, is a "bubble destined to burst". He even warned that there could be a small recession in the US economy this year. Everybody is watching

You can recognize ......It's ......Is it how much money?

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Reporter: Han Xuemeng.

Editor: Yang Zhiyuan.

E-mail: fnweb@126com Follow the Financial Times*** for more exclusive news.

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