The euphoria on the worldwide inventory markets and Nvidia: why is a single firm able to transferring the market? | EUROtoday

The world inventory markets have marked a brand new historic milestone after realizing the outcomes of a single firm: Nvidia, whose market capitalization is equal to 1.7 trillion {dollars}, which is the sum of the 5 largest listed corporations in all of Europe, Novo Nordisk, LVMH, ASML, Nestlé and L'Oreal. Never earlier than (maybe Apple a number of years in the past with the primary iPhone) had buyers paid a lot consideration to the outcomes of a listed firm, maybe additionally as a result of by no means had the capitalization of a handful of know-how corporations marked the tempo of the markets in such an apparent manner. . “Nvidia is the most important stock on the entire planet Earth”say Goldman Sachs analysts.

Yesterday, the semiconductor (chip) producer, which is taken into account the utmost expression of the way forward for synthetic intelligence, demonstrated that the rise within the inventory market that it has seen within the final 12 months – 227% with out counting this Thursday – is nothing in comparison with the expansion of its annual outcomes. Its revenues grew by 265% to exceed 20.4 billion euros and Its revenue elevated by 769%, to 12,285 million {dollars} from 1,400 million a 12 months in the past.

The market is just not solely assessing loopy progress for Nvidia, however behind these figures lie different extra essential messages. Can or not it’s mentioned that there’s bubble amongst American know-how corporations? The consultants, conscious that the burden of the seven magnificents It reaches stratospheric dimensions, you don't consider it. The finest instance of that is that Nvidia is buying and selling at valuations of 30 instances earnings, when through the bubbledot com of the 12 months 2000 they far exceeded 100, 200 and 500 instances.

From Bank of America, its analysts acknowledge that sure, that The seven listed “are expensive” since they’ve “valuations of 45 times earnings on average”however they bear in mind on the time that the so-called “FAANG (Facebook (today Meta), Amazon, Apple, Netflix and Google (now Alphabet)) peaked at 60 times and the Nasdaq 100 index reached 205 times during the dotcom bubble between 1998 and 2000”.

The different six giants of American know-how are Microsoft and Apple, that are shut to three trillion {dollars} in capitalization, Alphabet and Amazon, which exceed 1.75 trillion, Meta (previously Facebook) is positioned above 1.19 trillion in inventory market worth and Tesla , which has declined in current weeks (shedding 27% since January 1), which stands above $620 billion. Only the market worth of the electrical automobile firm based by the eccentric Elon Musk is identical as that of all of the Ibex 35 corporations collectively.

Is the journey of synthetic intelligence exhausted? Nvidia has confirmed that it’s not. Jen-Hsun Huang, CEO of the corporate, said yesterday that “generative AI and accelerated computing have already passed the boiling point. Demand is skyrocketing around the world, in all types of companies, industries and countries” . And this suggests, and that is how the market has interpreted it, that there’s nonetheless a protracted solution to go.

At the opening of this Thursday's sessionNvidia rises 12%, which represents $250 billion in further capitalization. It is the equal of what the three largest Ibex corporations, Inditex, Banco Santander and Iberdrola, are value collectively. The nationwide selective, as a complete, capitalizes 640,000 million euros, and is falling behind.

The benchmark index of the Japanese inventory market, the Nikkei 225, reached a brand new all-time excessive in Europe early within the morning, and Europe and now Wall Street joined these purchases, which have additionally consolidated new ranges by no means seen earlier than. This is the case of the German Stock Exchange in Frankfurt, the Paris Stock Exchange (the Cac 40) and even the London Stock Exchange. Spain, Italy and Portugal can’t say the identical. They are too distant. Specifically, greater than 30% under the maximums achieved in 2007 within the case of the Ibex and in 2000 within the footsie from Milan.

He slimming progressive that the periphery suffers contrasts with a higher valuation of the locations of Paris and Frankfurt, the place the capitalization of their reference indices (as is the case of the Dax) exceeds 1.6 trillion euros, and in Paris it exceeds 2 .57 billion. London is much away, with 2 trillion euros in capitalization inside the FTSE 100, which teams the principle British listed corporations.