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Summary
- Wall Street investors are questioning if the AI stock market craze is close to a major correction, particularly with Nvidia’s soaring market capitalization.
- Technical indicators suggest Nvidia may be facing a significant pullback in the second half of 2024, similar to patterns experienced by other tech stocks over the years.
- Booms do turn to bust. That’s the way nature and stock market speculation work. Nvidia’s valuation looks to be unsustainable.
What if the AI craze in the stock market is ending? What if the standout winner for this boom phase has topped and is ready to fall back to earth? These are the questions Wall Street titans to small retail investors ask themselves daily.
With NVIDIA (NASDAQ:NVDA) reaching an unheard of equity market capitalization above $3.3 trillion in June, in the highly competitive and extremely cyclical semiconductor business, the idea of “risk” should not be lost on investors. I remain quite sure, one day Nvidia will fall from grace, and come crashing back to earth. The stock’s valuation will act like the Greek tragedy lesson of Icarus, where flying too high toward the sun does have consequences.
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