Nvidia, now only Microsoft remains. The queen of chips is the second highest capitalized company in the world
Nvidia marked a historic turning point in the world of finance, surpassing Apple and becoming the second most capitalized company in the world. In the wake of the enthusiasm for artificial intelligence, the Santa Clara company has climbed the global rankings, ousting Apple, which until recently seemed unattainable. Only last year, Apple recorded its all-time high with a capitalization of 2.8 trillion dollars, dominating the financial scene.
However, the situation started to change in early 2024, when Microsoft he passed it Applefollowed then, in June, by Nvidia. Apple’s delay in the race to artificial intelligence and an anemic – in some cases even negative – growth in its turnover year on year, have slowed its progress. Despite an 8% increase in stock value over the past year and a $157 billion increase in market capitalization, Apple has failed to keep pace with Nvidia.
Nvidia has seen impressive growth in sales quarter after quarter, up 262% annually in the latest quarter. The stock has risen 211% in the last year and the market capitalization has grown by more than $2 trillion, a figure that exceeds the entire capitalization of Amazon and double that of the Italian FTSE MIB.
In 2024 alone, Nvidia stock rose 147%, adding $1.78 trillion in market capital. This extraordinary achievement also had a significant impact on the index S&P 500 (SPY ETF), to which Nvidia has contributed about 34% of total returns this year. Compared, Microsoftthe second largest contributor, accounted for only 7%, underlining the significant gap between Nvidia and the rest of the market.
This rise represents a historical moment, marking the affirmation of semiconductors as the most influential industrial sector in the S&P 500, with a weight of 11.64%, surpassing the dominance of softwarenow at 10.16%.
In an ever-changing financial environment, Nvidia it has not only redefined the parameters of business success, but also profoundly influenced global market dynamics. A new chapter has been written, and the story continues to surprise us with its sudden changes of scenery. In the meantime, let’s stay tuned for the next stock split Nvidia at the close of markets on Friday, as well as 2024 Apple Worldwide Developers Conference expected on Monday. So a fiery start to next week.
Yesterday was a day of triumph for the US stock marketswith the S&P 500 and the Nasdaq 100 which have reached new historical peaks. Positive macroeconomic data and five consecutive days of falling yields have fueled renewed risk appetite among investors. In particular, we have seen robust outperformance from the cyclical sector, consistent with increased risk appetite. Furthermore, the technology sector recorded growth of 2.2%, with Nvidia once again leading the way. While this may raise questions and concerns, going against these dominant trends can be extremely costly in the current environment.
THE equity securities enjoyed a favorable wind thanks to signs of a cooling of the labor market, fueling expectations for a possible rate cut by the Federal Reserve. Traders and investors digested a new set of quarterly earnings and fresh economic data. The next report is expected tomorrow on employment, the highlight of the week, which could consolidate or limit the current optimism. Reading bad news as good news about the jobs market lifted stocks. According to ADP, the private sector created 152,000 jobs last month, a slowdown from 188,000 in April, versus a forecast of 175,000.
Although the ADP ratio is often unreliable for predicting data NFP Tomorrow’s results follow Tuesday’s JOLT report, which showed job openings fell to 8.1 million in April, the lowest level in three years, compared to expectations of 8.35 million. Signs of a less hot labor market have strengthened expectations of a possible quarter-point rate cut by the Federal Reserve in September.
However, these expectations were tempered somewhat by a positive reading on the US services sector.
Yesterday, the Bank of Canada announced a cut in the reference rate by 0.25%, taking it from 5.0% to 4.75%, the first cut in four years. There BoC had kept rates steady at 5.0% for almost a year, but now sees an improvement in underlying inflation and a general weakening of the economy, which have justified this decision. This move precedes that of Federal Reservewhich hesitated to cut rates due to an inflation still high (CPI at 3.4% on an annual basis).
In Canada, CPI inflation it fell from 8.1% in June 2022 to 2.7% last month. While the BoC remains data-dependent, the Canadian economy has weakened more than the U.S., with expectations for real GDP growth this year at just 1.0%, compared with 1.3% in 2023 and the 3.8% in 2022. This could push the BoC to move faster than the Fed, as both inflation and economic growth cool faster in Canada than in the United States.
Today the focus is on the meeting of monetary policy from the ECB. An almost certain first rate cut (of the Lagarde era) of 25 basis points is expected. The updated June staff projections should outline the economic and monetary policy framework. Expectations are concentrated on the tone that the President Lagarde will use in the press conference. It would not be surprising to hear hawkish tones to mitigate any pockets of euphoria in the marketsalthough accompanied by the classic data-dependent and individual meeting approach.
*eToro market analyst
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