Nvidia was violently cut off by financial giants and is about to announce its results
Just as Nvidia is about to announce its results, there is heavy news from the outside. Stanley Druckenmiller, the hedge fund giant and founder of Duquesne Capital Management, believes that artificial intelligence has become an excessive bubble, so he significantly reduced his holdings of Nvidia shares by 72% in the first quarter of this year. According to Duquesne University's 13-F filing, Druckenmiller's hedge fund has averaged annual returns of 30% over the past 30 years.
As revenue and profits soar, Nvidia's stock price has risen more than 500% since the beginning of 2023. It is now the third most valuable company in the world, behind Microsoft and Apple, which means the stock will have a hard time doubling again with a market capitalization of $2.2 trillion.
In addition, DoubleLine Capital CEO Gundlach, known as the new debt king, still insists that there will still be an economic recession in the United States. Although it is difficult to say that it will definitely happen this year, it will definitely happen in 2024 or 2025. In fact, from a historical perspective, U.S. dollar interest rate cuts are often accompanied by bad things. At the beginning of interest rate cuts, the stock market often falls.
According to Duquesne University's 13-F filing, Druckenmiller's hedge fund has average annual returns of 30% over the past 30 years and sold 72% of Nvidia's shares in the first quarter of this year.
Druckenmiller bought Nvidia heavily when ChatGPT first launched, but he now believes the Nvidia rally has run out of steam.
Nvidia will disclose its first-quarter results after the market closes on Wednesday local time. As a result, the consensus is that the stock could be volatile on Thursday. Prior to this, Nvidia's stock price had risen by more than 500% since the beginning of 2023 as revenue and profits soared. It is now the third most valuable company in the world, behind Microsoft and Apple.
In the fourth quarter of last year, Nvidia's revenue surged 265% to $22.1 billion, driven by a 409% growth in its data center business. As the company dominates the data center GPU market, its pricing power continues to expand and profits grow faster. Adjusted net profit soared 491% to $12.8 billion, and its first-quarter guidance calls for another strong performance, forecasting revenue of about $24 billion and adjusted net profit of $13 billion.
Tesla said in its most recent earnings report that it has installed 35,000 of Nvidia's H100 GPU super chips and expects that number to grow to 85,000 by the end of this year. The H100 reportedly sells for as much as $40,000, which means Nvidia will earn $3.4 billion in revenue from Tesla alone this year. Likewise, MetaPlatforms CEO Mark Zuckerberg recently said that his company will have billions of dollars worth of H100s by the end of the year. These data indicate that large technology companies are hoarding Nvidia components for the artificial intelligence revolution. This also means that Nvidia’s position has not been shaken.
Since mid-April, Nvidia's stock has risen more than 20%, and its recent trend has been quite solid. As of yesterday's close, the stock price has reached above $953, just one step away from the all-time high of $974.
Some netizens once joked that the biggest risk for U.S. stocks is to keep rising. In fact, most of the time, risks do rise. Analysts believe that the market is now looking forward to a U.S. dollar interest rate cut, but when interest rates are actually cut, U.S. stocks will not necessarily rise. On the contrary, when interest rates are cut, it may also be the time when interest rates fall the most.
Jeffrey Gundlach, CEO of the investment management company DoubleLine Capital and known as the new debt king, insists that the world's largest economy may experience a recession.
When asked recently if he still believed the U.S. would still see a recession, Gundlach responded: "Of course." Although he said it was "hard to say" whether that would happen this year. But he "definitely" thinks a recession could happen in 2024 or 2025, according to the interview transcript.
Gundlach, considered one of the most influential figures in financial markets, was unclear about the precise timing of the recession. According to reports, as early as September and November last year, he said that a recession may come in the first half of this year. Instead, the economy has exceeded expectations, although that may be starting to change.
Rising U.S. inflation, interest rates and household debt are likely to continue to weigh on the economy this year, the Conference Board said. The agency's leading economic index released on Friday showed a second consecutive month of decline in April. At the same time, the New York Fed Empire Factory Index released last Wednesday weakened further in May, falling to negative 15.6. It was the sixth consecutive reading below zero, a sign of deteriorating conditions.
"I think the data that came out over the past week are very concerning," Gundlach said. "A month ago, if you broke down the economy into six or seven major sectors, all of those sectors were experiencing positive growth. All of a sudden, in There are more negatives than positives in the same numbers this year.”
“The positive thing,” he continued, “is, I think, the lifestyle adjustment that comes with printing money: they decide they’re not going to get a check from the government anymore, but they’re willing to put the money on their credit card. Those credit card bills It’s really starting to increase.”
