Nvidia nirvana
The Nasdaq hit a record high, Nvidia's market cap crossed US$3 trillion, and in Australia CBA also touched a fresh record. Yet even as scepticism grows, there are few signs the equities bull run is under threat.
There’s an inherent bias in the financial media to be cautious when markets turn bullish — journalists are a sceptical bunch, after all.
But while it's always worth testing the assumptions underpinning that scepticism, it’s also difficult to find anyone sensible at the moment who isn’t alert to the possibility that equities may have run ahead of themselves.
Take Loftus Peak’s Alex Pollak, a growth-minded fund manager and one of Australia’s earliest and loudest bulls in Nvidia, the stock that has led the US equity market rally and which last night propelled the benchmark S&P 500 to fresh record highs. Even he is circumspect on the stock at its current levels. “We like riding things on the way up, but we hate getting caught in things that are running down,” he said, indicating that he’s taking some chips off the table.
Nvidia rose 5% overnight, pushing its market value above $US3 trillion ($4.5 trillion) and making it the world’s second-most valuable company ahead of Apple and behind Microsoft. It’s growing like crazy off the back of the AI revolution, and Pollak admits that the underlying story remains very much intact. It’s just that Nvidia might not be able to deliver the kind of growth it is being priced for.
