Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.
On Monday, Eastern Time, top Wall Street investment bank Morgan Stanley significantly raised its performance expectations and target stock price for AI chip leader Nvidia, stating that the organization believes that the performance data of Nvidia at least this year will be very strong due to unparalleled demand. Morgan Stanley adjusted Nvidia's target stock price within 12 months from $116 to $144 after the latest survey and maintained its 'shareholding' rating for the company. Overall, Morgan Stanley continues to be bullish on Nvidia's share price trend, believing that its performance will be much stronger than the large cap, but it will still take some time to emerge from the recent pullback.$NVIDIA (NVDA.US)$Nvidia's stock price fell over 3.5% in early U.S. trading on Monday, hovering around $120. Since the Triple Witching Day, Nvidia's stock price has been subject to heavy selling pressure from global hedge funds and retail investors due to performance vacuum periods and lack of recent fundamental bullish news, falling over 10% since its historical peak on June 20th.
Analyst Joseph Moore of Morgan Stanley wrote in the latest research report that a recent survey of China Taiwan's chip industry chain 'inspection' is enough to maintain the organization's strong confidence in Nvidia's recent performance data, and the catalyst path for demand is still 'strong'. Morgan Stanley's research data shows that Nvidia's AI GPU demand prospects are still very strong, H100 demand is still amazing, H200 growth visibility is gradually increasing, and Chinese companies have strong demand for Nvidia H20. Morgan Stanley said that although H100's delivery time has been significantly shortened, this is a natural phenomenon during product transitions. Morgan Stanley expects that visibility will improve significantly over the next 3-4 quarters. Although the market's strong expectations for Nvidia's AI GPU have been partially reflected in the stock price trend, Nvidia's future prospects are still very optimistic.
Morgan Stanley stock analyst Joseph Moore wrote in a recent research report that the recent chip industry chain survey from China Taiwan is enough to maintain the organization's strong confidence in Nvidia's recent performance data, and the catalyst path for demand is still 'strong'.
Morgan Stanley's research data shows that Nvidia's AI GPU demand prospects are still very strong, H100 demand is still amazing, H200 growth visibility is gradually increasing, and Chinese companies have strong demand for Nvidia H20.
Analyst Moore wrote: 'The data points we talked about in two Asian reports and our checks in the U.S. show that Nvidia's AI GPU demand will remain strong at least this year.' 'That said, it's clear that we're at the tail end of the Hopper architecture (H100 and H200 based on the Hopper architecture), with bubbles and visibility much lower than before, given the enthusiasm we know from Chinese companies we've surveyed for Nvidia's latest Blackwell architecture AI GPU (soon-to-be mass-produced B100/B200/GB200), much stronger than we had anticipated.'
Morgan Stanley's research data also shows that the supply of HBM3 storage systems has improved, but upgraded HBM3E is still a key supply bottleneck. Morgan Stanley predicts that SK Hynix will initially become the main HBM3E supplier for Nvidia's Blackwell-based AI GPU, and Micron's HBM3E will be configured on the currently high-demand H200, and may become a supplier of HBM3E required for Blackwell AI GPU in the future.
After its latest survey, Morgan Stanley reiterated its bullish confidence in Nvidia's GPU supply chain system, including Nvidia's AI GPU's only foundry factory, 'chip foundry king' TSMC, KYEC, and so on.
Therefore, after the latest survey, Morgan Stanley analyst Moore now believes that Nvidia's EPS may reach $3.34 under GAAP accounting standards, and adjusted EPS may reach $3.53, far higher than the previous Morgan Stanley expected $2.91 and $3.10.
Nvidia's stock price may continue to fluctuate in the short term, but it is difficult to change the long-term bullish trend.
From a longer time perspective, Nvidia's stock price has soared more than 1,000% since October 2022, and it even became the world's highest market value listed company last week, and finally climbed to the top of the "global stock king" for the first time. After this 1,000% surge in AI carnival, global funds may rush into rational thinking from frenzied irrational follow-up, which may mean that Nvidia's stock price, which has repeatedly set new highs, may experience a short-term downward adjustment or a plateau, but it is difficult to change Nvidia's stock price "long bull trend" under the AI era of "selling shovels to miners".
Wall Street analysts who are bullish about Nvidia's stock price have emphasized that the company will continue to rise, possibly reaching $150 or even $200 within the year - which means Nvidia's market cap will break through the $5 trillion mark. Since the beginning of the year, analysts' average target price for the stock has also lagged far behind Nvidia's rise, forcing all analysts covering the stock to constantly raise their target prices.
Hedge fund manager Eric Jackson from EMJ Capital said that Nvidia's stock price will continue to soar by the end of this year. Jackson expects the stock price to reach $250 by the end of this year, with a potential upside of about 100% compared to current levels. If this rise is achieved, the valuation of this AI chip company will reach an astonishing $6 trillion.
Jackson said, 'I believe that people will begin to see strong sales of Blackwell chips in the second half of this year, the high gross margin of these chips, and begin to consider the upcoming Rubin chips. I think we will begin to see this excitement reflected in a high long-term PE multiple, and if this happens, the company can reach a market value of $6 trillion.'
Bank of America emphasizes that any degree of decline in Nvidia stocks should be seen as an opportunity to buy more stocks. Bank of America analysts wrote in a recent report that investors should continue to be bullish on this chip giant that drives AI prosperity, and Bank of America reiterated its "buy" rating and target price of up to $150 for Nvidia.
Bank of America emphasized in its report that the hardware deployment cycle of Generative AI (GenAI) could last as long as 3-5 years, but is currently only in the second year, and projected that Nvidia will have an opportunity to use as much as $300 billion annually, roughly three times its expected revenue this year. Bank of America also expects Nvidia's next-generation AI GPU based on the Blackwell architecture to contribute greatly to revenue, and refutes the "AI bubble argument" derived from comparisons with the "dot com bubble" of 2000, emphasizing that unlike the "Internet boom", which relied on high-risk debt financing, the deployment of generative AI is a competition among some of the most well-funded cloud computing giants and other strong fundamental technology leaders.
Editor/Lambor