Bill Blain, founder and senior financial strategist of Wind Shift Capital, stated that Nvidia's stock is sending a "sell" signal to investors.
Brian pointed out in a report on Tuesday that Nvidia's sky high valuation has made many of its employees very wealthy. He mentioned a recent survey that found 40% of Nvidia employees had a net worth between $1 million and $20 million, and 37% had a net worth exceeding $20 million.
Brian said that as a result, less than one-third of Nvidia employees are facing real financial pressure every day. He wrote in the report:
Do you think that poor quarter of NVIDIA employees would really fight for those who are already wealthy and highly motivated to protect their wealth and status? Do they think Nvidia's stock price will rise another 700%?
Would they be willing to remain extremely poor compared to their colleagues and bosses? Or, more likely, the enormous wealth in the office means that poorer but still highly motivated employees will find that their opportunities to acquire wealth elsewhere are better?
Just as Brian issued the above warning, with the collective decline of large technology stocks, Nvidia's stock price plummeted 9.53% on Tuesday, and its market value evaporated by about 279 billion US dollars (about 1.99 trillion yuan) in a single day, setting a new record for the US stock market.
On that day, it was reported that the US Department of Justice had issued a subpoena to Nvidia in search of evidence that the artificial intelligence chip giant had violated antitrust laws.
Nvidia's stock price has been continuously declining since the release of its financial report last Wednesday, highlighting investors' concerns about the company's overvaluation and slowing revenue growth guidance. However, since the beginning of the year, Nvidia's stock price has still risen by as much as 124%.
The bull market in the US stock market has peaked
Brian also stated that Nvidia's huge valuation may indicate a broader stock market peak. He said that although investors expect a significant interest rate cut in the coming year, the Federal Reserve's loose policy may be "limited", and he believes that interest rates of 4% -6% will become the new normal for the market.
Some people believe that the Fed's promised rate cut later this month will bring unlimited joy to the market. (I think this may still be a moment to sell the facts.) "Brian said. Many people, including myself, believe that a new long-term economic cycle may reverse the trend of reduced inflationary pressures over the past 40 years
Brian said that the current long-term cycle of the market began in the 1980s, when inflation steadily declined after experiencing a difficult period of the previous decade. He said that the market could enter a new cycle as early as 2025, and pointed out that geopolitical tensions, the increasing size of commodities and US debt brought inflationary pressure.
I just found the best reason to sell Nvidia and confirmed that we are at the top of the market. What will happen next? Will there be 20 years of inflation, rising interest rates, and a global commodity super cycle as countries compete to obtain future strategic resources
Some other strategists have also warned that although price increases have fallen from their peak in 2022, inflationary pressures will continue to exist. BlackRock strategists previously predicted that inflation could rise again, pointing out the possibility of a significant surge in oil prices and the risk of demand exceeding supply in the US economy.