I. Performance of Global Equity Indices (in US dollars)
Source:Bloomberg,2024/05/20-2024/05/26
II. Key Market Themes
i. The outlook for small and medium-sized businesses in the United States is not optimistic, with middle-income earners potentially becoming the key trigger.
Recently, Federal Reserve officials have been speaking frequently. Among them, current director Waller, who is seen as a future Fed chairman, stated, "The current economy is very robust, maintaining high interest rates for 3-4 months will not be a problem, and the Fed's current focus is still on inflation."
However, the economic damage from Fed rate hikes has a delayed effect. Historically, signs of recession have typically appeared around 10 quarters after the start of each rate hike cycle, and currently, it is the ninth quarter. Meanwhile, according to the NFIB Small Business Optimism Index, the situation for small businesses in the United States has actually already deteriorated, with conditions even more tense than in 1990 and 2001.
Source：Bloomberg
On the other hand, there exists significant divergence in the balance sheets of households in the United States. Wealthy individuals continue to see new highs in assets such as stocks and real estate, while the income growth of low-income earners has already slowed significantly, unable to keep up with inflation. Meanwhile, the vast middle-income group is on the brink. Once the unemployment rate rises rapidly, the enormous debt they carry will trigger a series of economic crises.
From a data perspective, since the current rate hike cycle began, the rise in the stock market has been primarily attributable to giants like MEGA7, leaving the Russell 2000 far behind. Looking beyond the surface, this represents a crucial factor for the broader population, including small and medium-sized enterprises and middle-income earners. Investors need to remain vigilant of potential systemic risks at all times.
ii. NVIDIA's growth has exceeded expectations across the board, but how far can it go beyond $1000?
This week, the "tech giant" NVIDIA $英伟达(NVDA)$ released its latest financial report, achieving a quarterly revenue of $26 billion, with a gross profit margin as high as 78.4%, both greatly surpassing market expectations. Among these figures, the highly anticipated data center business contributed $22.5 billion in revenue, setting a historic high and accounting for a staggering 86%.
During the conference call, concerns were raised about the potential for new products to replace old ones, leading to delays in customer orders. In response, Mr. Huang stated, "Applications such as ChatGPT, Gemini, Anthropic, etc., are rapidly consuming all available GPUs in the market, and customers are urgently requesting us to deliver systems as soon as possible." On the other hand, the combination of GPT-4o with the first GH200 system has demonstrated significant commercial potential. Cloud manufacturers are eagerly awaiting the new GPUs, and orders for the old H series are not expected to decline.
Regarding the new B series products, their performance, power consumption, and price are highly attractive, resulting in a significant number of orders. Mr. Huang stated that shipments for the B series are planned to begin in the second quarter, with volume starting in the third quarter. This speed directly dispels previous doubts about B series sales in the market and has led to an improvement in future performance guidance.
Additionally, NVIDIA has instilled strong confidence in the market in terms of sovereign AI and internet connectivity. We believe, as Mr. Huang boldly stated, "The next industrial revolution has already begun." In the early stages, facing explosive growth in demand, NVIDIA's future prospects will only become more frequent. Currently, the market is relatively tense in terms of funding, and investors are cautious in pricing assets. The $1000 NVIDIA or simply represents the beginning.
Disclaimer
1. The information contained in this document is for reference only and does not constitute any financial advice or a transaction offer, solicitation, suggestion, recommendation or any guarantee for any financial product, strategy or service. You should make your own investment decisions and bear the risk of investment responsibility independently.
2. The content of this document is based on reliable data sources that the staff believed to be reliable at the time of production. The Tiger Investment Research team may adjust without prior notice. The Tiger Investment Research team does not guarantee the accuracy, reliability or completeness of the content of this document, and does not assume any responsibility for any transactions arising from the content of this article and its derivative consequences.
3. This document is confidential and non-public and can only be accessed by professionals with corresponding risk-taking capabilities and preferences. Without the prior consent of Tiger, no one may copy or distribute it in any form.
Comments