This Record Stock Market Is Riding on Questionable AI Assumptions
Just four giant technology stocks added more market value than the rest of the S&P 500 put together this month. More than half of the gain came from Nvidia.
The threat to Nvidia’s share price is therefore about threats to its earnings. There are four risks:
Demand falls because AI is overhyped.
Competition reduces prices.
Nvidia’s biggest supplier, Taiwan Semiconductor Manufacturing, might want a bigger slice. TSMC actually makes the chips.
What if scale doesn’t matter?
AI may be a big deal, but it’s unlikely to pan out the way people seem to think.
James Mackintosh Wall Street Journal 30 May 2024
Nvidia’s meteoric rise
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