Sceptics were concerned expectations were too high coming into Nvidia’s earnings report last week, given the stock had doubled in 2023 and was trading on 29 times sales.
That sounds bubbly but Nvidia delivered what Wedbush analysts described as “guidance for the ages”. The stock soared 25 per cent, driving it towards a near $1 trillion valuation. , says Morgan Stanley’s Lisa Shalett. She notes Apple alone is worth more than the UK stock market and is twice the size of Germany’s. The top 10 US companies now account for 35 per cent of the S&P 500, compared with 25 per cent during the 1999-2000 dotcom bubble and an average of 20 per cent over the last 35 years.Investing in the S&P 500 market is “increasingly a wager on the health of just a few companies”, with the fundamentals of the other 490 stocks carrying less weight.