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The United States has made big moves in the financial markets in recent years. First of all, the Federal Reserve's "water release" behavior is like a faucet, and a lot of money is poured on U.S. stocks, especially those technology stocks, and the market value is rising rapidly, and it is almost breaking through the sky.
Then, the elite on Wall Street began to sing again, boasting that AI is the future, and this year is the first year of AI, which makes everyone itch and can't wait to pounce on it immediately.
But if you think about it carefully, the smell is not right, and no one can see that this is a well-designed game of the United States in terms of financial layout? The show has just begun, and the next plot may surprise people.
Why Nvidia is so bright
Nvidia is really a big hit in the technology circle in recent years. You think, a chip company can become almost a household name, which was unimaginable before.
Why is Nvidia so bright? Mainly because of two words: AI. Who doesn't know AI (artificial intelligence) now, from autonomous driving to smart home, from games to graphic design, NVIDIA's GPU (graphics processing unit) is everywhere, and it has almost become an accelerator for the development of the AI field.
NVIDIA's GPUs are high-performance and designed for deep learning, not only among gaming users, but also in scientific research, cloud computing, data centers, and more.
In short, NVIDIA is like giving artificial intelligence wings to help the field rise rapidly.
At its peak, its market capitalization was close to $3 trillion, which is one of the largest in the world.
NVIDIA's success is not only due to how advanced its technology is, but more importantly, it is at the forefront of the times, seizing the historic opportunity of AI, and naturally becoming the biggest beneficiary.
Nvidia's market capitalization has fallen
The development of artificial intelligence (AI) is changing with each passing day, especially the rise of advanced technology companies represented by NVIDIA, which has promoted the rapid progress of AI technology.
However, NVIDIA's king position is not as solid as a rock, and with the continuous emergence of competitors such as AMD and Huawei, how long can NVIDIA's advantage be maintained?
Although Nvidia achieved significant results in the early days, its market share was gradually eroded as other companies caught up. For example, AMD, with its strong R&D strength and innovative spirit, has successfully launched a series of competitive products, posing a serious threat to NVIDIA.
In addition, Huawei, as a world-renowned communications equipment manufacturer, has also begun to set foot in the field of AI chips, and its advantages in 5G networks are expected to be further transformed into competitive advantages in the field of AI chips.
Nvidia's stock price volatility reflects investors' concerns about its future prospects, and since its peak in March, when it was near a high of almost $3 trillion, Nvidia's stock price has continued to fall and is now worth just $2.18 trillion, which has undoubtedly put a lot of pressure on NVIDIA and raised questions about its long-term competitiveness.
Considering its record net profit of more than $36.6 billion in fiscal 2023 and a slight 9% growth rate in fiscal 2024, one might think that the company is gaining momentum.
It's worth noting that Nvidia's market capitalization has more than doubled during this period, a phenomenon that seems to be out of touch with the company's actual performance.
The rapid development and innovation of the technology industry is undoubtedly a key factor in driving social progress. However, when we look at Nvidia's situation, we must recognize that the large increase in market capitalization does not necessarily reflect the true strength of the company.
When evaluating the value of a company, we should not only focus on its financial data, but also consider other factors, such as technological innovation capabilities, market competitiveness, etc.
But have you noticed that the so-called AI has changed the world, but has it really changed everyone's life?
With the rapid development of artificial intelligence (AI), there is a growing expectation that technology will change the way we live.
However, we need to be soberly aware that although AI has brought us convenience in some aspects, such as providing support for human beings in the field of text editing, its true value has yet to be explored, and it cannot replace human thinking and creativity, including the unique sense of innovation and imagination of human beings.
We have to admit that AI does show amazing capabilities in some areas, such as drawing and writing.
However, while AI can simulate human-like artistic expressions, it cannot be as uniquely innovative and imaginative as humans.
This kind of innovation and imagination is an important driving force for human cultural inheritance and social progress, and it is also difficult for AI to achieve.
Second, there are limitations to the application of AI. In the case of AI-generated video, the technology has yet to be commercialized, despite significant progress.
This can't help but make us wonder, is there some kind of manipulation by interest groups behind this?
Why did Nvidia suddenly fail? First of all, we have to talk about the entire environment of technology stocks and the AI industry. Wall Street elites have been blowing the sky before, saying that AI is the future, and Nvidia is the representative of the future.
But the truth is, there's too much hype in the market and too much bubble. As soon as there is a small breeze, the whole market will be turbulent.
Moreover, although Nvidia is a technology cow, it is also because it is too good that it has aroused the jealousy and fear of many people, including the US government. Because its founder is Chinese, has close cooperation with the Chinese market, and is too profitable and too powerful, it has naturally become a nail in the eyes of some people.
The American conspiracy was broken?
This so-called "American conspiracy" and the impending collapse of the US stock and AI bubble.
Americans are good at financial layout, which is well known, in recent years, the Federal Reserve has released water, and a large amount of money has flowed into technology stocks, especially the AI industry.
On the surface, this is an investment in the future, but in reality, there are huge risks hidden behind it.
The problem now is that, with the expectation of high interest rates, people are starting to worry about these overvalued tech stocks. Once confidence collapses, the market value of companies that seem indestructible can evaporate overnight.
And not only tech stocks, but the entire U.S. AI bubble could also be punctured. Come to think of it, behind all these years of carnival is actually the result of the Fed's continuous release of water and fiscal stimulus. Funds were forced to find places to make high returns, and eventually the majority of them flocked to the technology and AI fields, resulting in today's situation.
But the question is, is this growth really sustainable?
Obviously, a lot of people are starting to realize that the answer is "no". Because, once the Fed tightens monetary policy, companies and projects that rely on cheap money will face tremendous pressure to survive. Not to mention, high inflation and a possible recession await right now.
The disconnect between the financial market and the real economy in the United States is gradually being exposed. For a long time, the United States has ensured the hegemony of the dollar by controlling the global financial system.
But now, that model has been challenged. The global real economy has fewer and fewer efficient areas, while the value of US dollar assets is constantly expanding, and this trend of "moving from real to virtual" will eventually become unsustainable.
What is the U.S. strategy in the face of this situation?
It seems that they are trying to delay the outbreak of the crisis by keeping interest rates high and restricting the flow of money. But this approach is only a palliative, not a cure. In the event of a massive withdrawal of funds, the value of those overvalued assets will shrink rapidly, including in the US stock market and the AI sector.
In addition, globalization and geopolitical changes are also one of the influencing factors. The U.S. crackdown on emerging markets such as China has exacerbated the risk of a dollar asset bubble rather than weakened it.
In the midst of this reshaping of the global economic landscape, emerging markets may become the ultimate safe haven. Once these markets are lifted, a flood of capital is likely to pour in, accelerating the bursting of the dollar asset bubble.
Therefore, the US stock market and the AI bubble we are seeing now may be just the tip of the iceberg.
America's financial machinations, no matter how ingenious, are castles built on the sand. Once the tide comes, all will be reduced to nothingness.
Against this backdrop, investors need to be more cautious. It is important not only to see the potential of technology and the market, but also to be wary of the risks hidden behind the bubble.
In the future, the market may favor investment opportunities that are supported by the real economy and can continue to create value.
All in all, the collapse of the U.S. stock market and the AI bubble may not be a problem, but an imminent reality. At this turning point, it is necessary to see the revolutionary change of technology, but also to clearly realize that no market can exist independently of the support of fundamentals forever.
References:
Qualcomm, Intel, and Google form a new AI alliance
Wall Street Witness "Alert! The "Most Beautiful Boy" Nvidia in U.S. Stocks Once Entered the Technical Adjustment Zone"