Good morning, it's Dylan Jovine, and Happy Wednesday!
Welcome to my daily diary where we dive into the latest market insights bright and early. I'm up at 4 AM every day, and I figured, why not share my thoughts with you?
In today's episode, there's no major news except for the new home sales report at 10 AM. But let's talk about something more interesting: Nvidia.
Last night, a buddy asked me about Nvidia, and here's my take. While Nvidia is an exceptional company, its recent sell-off doesn't worry me. In fact, it's expected. Historically, companies that directly engage with consumers-like Apple, Tesla, Amazon, and Google-tend to hold the top market cap spots. Nvidia, however, primarily sells to businesses.
Remember Cisco during the dot-com boom? It soared but eventually came back down. Nvidia could follow a similar path. Despite being led by the impressive Jensen Wong, and despite its current high valuation, I'm cautious. The stock’s recent run-up feels like a melt-up, driven by everyone chasing it.
Most top market cap companies maintain consumer relationships, unlike Nvidia, which deals with a few hundred businesses. Even giants like Facebook (Meta), Amazon, and Walmart have extensive consumer bases. Tesla might struggle to maintain its position due to the nature of the car industry, but that’s a different discussion.
In essence, while Nvidia is a fantastic company, I urge caution. The stock may rise, but companies that aren't consumer-facing often don't retain top spots for long.
If you enjoy these daily insights, let us know, and we’ll keep them coming. Have a great day!
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25 июн 2024
