Nvidia's $1T: Tech Bubble's Peak?
Technology stocks made big gains before worries about the U.S. debt ceiling. The Nasdaq ETF went up by 3.5% for the week. This was due to Nvidia having a big drop in revenue.
Before its quarterly results on May 24, 2023, the market didn't care that Nvidia was overvalued. It also didn't care that the company's revenue dropped by 13.3%. But the market was amazed when Nvidia beat expectations by $670 million in revenue from graphic card supplies for the PC market. Nvidia also shocked everyone with its Q2 revenue outlook of $11.0 billion, which was much higher than the expected $7.11 billion.
The CEO of Nvidia, Jensen Huang, expects big money from artificial intelligence like how Apple had huge success with smartphones. He thinks investors who didn't invest in Apple's smartphone boom may regret it again if they don't invest in AI.
Last week, NVDA stock went up by 24.57% due to FOMO. This broke the previous record of around $350 in late 2021. Now, the company is worth almost $1 trillion ($975.94 billion), so it could reach a share price of $400.00. Fundamental investors who didn't want to pay more than 50 times forward earnings might not understand why this happened.
Nvidia's momentum is strong but uncertain. The tech bubble's peak is unclear. Nvidia leads the way.
