One of the most common parallels that explain the boom in the AI values is the technological bubble of 90 years. Both periods have been and are still fed secular transformation development. At first glance, remarkable growth, market performance and high AI values are similar to dot-com years that have created a technological bubble.
Today, we have recognized a period when the behavior of investors resembles the behavior of technological bubbles: many companies that are contained to align their brand at the AI revolution benefit from the “bonus AI” integrated into their valuation.
As shown in the tweet below, one of the most popular analogies of the cited skeptics compares the recent NVIDIA performance (NASDAQ 🙂 with Cisco (NASDAQ 🙂 at the end of 90 years. Based on the significant similarity of the price trajectory, this analogy seems to be as solid as a rock.
However, the comparison shows errors in digging factors that are the basis of the growth of every society. Val Zertev raised two basic differences with Jack Farley in a recent episode of monetary matters. According to him, the boom in the demateurized computer science, which began around 2010, for NVDA on the current market better parallel.
Most NVDA AI infrastructure revenue comes directly from available cash flows from several large companies. This is contrary to the cost of infrastructure financed from risk capital and debt at the end of the 90’s. In addition, NVDA IA Hyperscaler customers have established Fortune Companies 500 well capitalized clients.
At the end of the 90s, Cisco’s rapid growth was stimulated by significant infrastructure costs from start -up businesses supported by risky capital. Many of these young companies had dubious commercial models and eventually failed, reducing the growth prospects of CSCO and launching a recession. The Zelev’s argument is that the demand of NVDA is much less likely to evaporate than Cisco’s demand at the time.
Finally, the C/B CSCO ratio was approximately 100-150 at the top of the Internet bubble, while the NVDA ratio is significantly lower, only 25.5 today. Given these factors, the analogy of technological bubbles for NVDA is not valid comparison.
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Economy
Market market market
Yesterday’s article He evoked the possibility of gathering due to the current conditions of occurrence. If we focus on the market as a whole, the market dropped yesterday, the subtitles indicate that it was associated with the current conflict between Israel and Iran.
Although this conflict is definitely concerned, the market is still in the consolidation process. The good news is that the Bulls continue to maintain the support of a mobile mobile phone 20. Bad news, if you can say, is that the ascending chamference last week was divided. This generally indicates a short correction or consolidation.
As the graph shows, dynamics (at the top of the chart) has definitely collapsed, which promotes cautionD ‘ as well as the relative force (at the bottom of the chart) weakens. The current market event reminds me of November 2024, as is approaching December.
At that time, the enthusiasm was strong, the cash flows reached the maximum and began to decrease, while the momentum and relative strength refused. Although this is not a significant correction, the market was satisfied with the side movement to adapt to these conditions. I think it could be the same in the coming weeks.
Although we have an excessive level of liquidity, we are satisfied with the current process. In the coming weeks, however, we will look for the opportunity to work this capital. At the moment, continue to control the risk, but the Nedrediction List of purchases with the inputs for the positions you want to hold.
Retail sale is not as bad as it seems
Retail sales recorded in May by -0.9 %, less than a consensual estimate of -0.6 %. Financial media quickly assigned a decline as a demand due to Trump customs prices, but the impression is not as bad as it seems. It mainly reflects the normalization of the application after the implementation of customs prices in March, as shown in the graph below.
Motor vehicles and spare parts (-0.68 %) were the main critics of the index. This is followed by a service station (-0,139%) and merchants in building materials, gardening equipment and supplies (-0.15%). These three categories are excluded from the control group, which is a measure that excludes volatile categories and GDP.
The control group exceeded expectations and increased by 0.4 %in May, greater than a consensus by an increase of 0.3 %. While the main character deteriorated last month, the data on the control group still reflects healthy consumption expenses in the US economy.
Tweet of the day
(Tagstotranslate) nvidia