FKU - Weekly Commentary: Speculative Bubble Hype
2024-05-27 10:32:44 ET
Summary
- Nvidia's stock surged 15% this week, boosting market capitalization to $2.619 TN - or 62 times earnings and 32.9 times revenues.
- As is typically the case, policies and speculation strategies that take U.S. finance by storm soon permeate the world.
- The massive 'doomsday glacier' known for its rapid destabilization is undergoing a 'vigorous ice melt' that scientists say could reshape sea level rise projections.
May 24 - Bloomberg (David Ingles): "Nvidia's 110% gain this year is enough to slingshot the company's value above the entire market capitalization of Germany, along with a range of other major bourses. The AI-boom poster child overtook Australia in early February, topped South Korea a few weeks later and as of the Thursday close, is now also above Germany. The next 20% leg higher would likely add Saudi Arabia and Canada to the list. And if the prediction from one of Bloomberg TV's guests on Thursday is correct and Nvidia does top $10 trillion, that would make it larger than all the world's stock markets except the US."
AOL, Cisco, Intel, Compaq Computer, Gateway 2000, Blackberry, 3Com, etc. - the Speculative Bubble Hype list could go on and on. And we don't have to limit our reminiscing to the late nineties Bubble period. There was no doubt that Tesla would dominate the EV world.
February 5, 2020 - CNBC (Kevin Stankiewicz): "Money manager Catherine Wood told CNBC… that she stands by her latest five-year price target of $7,000 per share for Tesla. 'Our confidence level that this stock is heading for $7,000 over the next five years is very high,' Wood, the founder and CEO of Ark Investment Management, said… 'We've arrived at that price by weighting the probabilities of 10 different scenarios, including bankruptcy, to be honest. So we've tried to be as fair and balanced as we could possibly be,' added Wood…"
Nvidia's stock surged 15% this week, boosting market capitalization to $2.619 TN - or 62 times earnings and 32.9 times revenues (from Bloomberg). "Nvidia CEO Jensen Huang's Net Worth Swells From $3 Billion to $90 Billion in Five Years." "Nvidia's Landmark Performance Hasn't Been Seen 'In the History of Capitalism,' Says Tech CEO." "Nvidia Shares Are Up Roughly 28-Fold in the Past Five Years." "Nvidia Shows No Signs of AI Slowdown After Over 400% Increase in Data Center Business." "Nvidia's First Quarter Results Confirm That The Next Industrial Revolution Is Well Underway."
May 22 - Reuters (Robert Cyran): "For firms designing AI models and building the networks that train and run them, the response has been a spending arms race to grab new markets and prevent rivals from disrupting their existing businesses. Microsoft, Amazon, Alphabet and Meta collectively splurged $200 billion on capital expenditure last year…, according to Bernstein. The research firm estimates this will increase by over 50% this year, mostly because of AI. Compared to these huge sums, the income generated by AI remains small. Sequoia estimates generative AI now brings in about $3 billion a year in revenue… The promise of future riches has unleashed some gigantic forecasts for the spending needed to make the advanced semiconductors, build the data centers, and generate the power to train and run AI models. OpenAI boss Sam Altman earlier this year put the figure at up to $7 trillion…"
"New Eras", "New Paradigms" and, these days, "the next industrial revolution." For now, loose financial conditions accommodate delusions of grandeur....
Weekly Commentary: Speculative Bubble Hype