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%.

Market strategists and fund managers from top global asset management institutions have stated that the unprecedented investment frenzy surrounding AI in the global stock market is far from over. After a short period of adjustment, stock prices of AI leaders such as Nvidia that have repeatedly hit new highs will continue to drive the "long bullish trend" of the global stock market - that is to say, continually setting new historical highs. Even economists predict that based on the optimistic expectations of multiple expansions driven by the development of AI technology, the benchmark index of US stocks, the S&P 500 index, will reach a historic peak of 7,000 points in 2025.$S&P 500 Index (.SPX.US)$Please use your Futubull account to access the feature.

According to reports, fund managers and market strategists from global asset management institutions, including the world's largest asset management giant BlackRock Inc. and BNP Paribas Asset Management of France, predict that AI will become one of the most important investment themes for global stock markets in the second half of this year and is the core driving force behind driving stock markets to new highs.

Although most strategists predict that the AI chip hegemon Nvidia and other large tech companies that benefit from the global deployment of AI technology will continue to lead the way, some strategists and fund managers believe that secondary and tertiary beneficiaries of AI, including utilities and infrastructure providers, are expected to take an important position in the future. Almost all strategists and fund managers agree that the investment frenzy around AI is far from subsiding.$NVIDIA (NVDA.US)$Since the end of 2022, the benchmark index of US stocks, the S&P 500 index, has soared by more than 40%, among which Nvidia and the "Magnificent 7" of leading AI companies, such as Google, Microsoft, Apple, Amazon, etc., have been the big winners of this investment theme, accounting for as much as 60% of the increase. Although this rapid rise reminds some market forecasters of the internet bubble era, many strategists from global asset management institutions believe that this investment frenzy centering on AI is mainly supported by strong actual profits and optimistic profit prospects.

Wei Li, the global chief investment strategist at Blackrock Investment Research, said: "We expect AI to be one of the most critical themes in the second half of this year." "This is a centralized rebound, which is a significant feature of the transformation of AI, not a loophole in the market. The concentration of technology stocks in the stock market itself is not the reason we are worried about under the drive of AI."

The "Magnificent 7" includes:$Microsoft (MSFT.US)$Nvidia and the other six leading tech giants of the US stock market have been the big winners of the investment theme of AI. Although some market forecasters are reminded of the internet bubble era by this rapid rise, many strategists from global asset management institutions believe that this investment frenzy centering on AI is mainly supported by strong actual profits and optimistic profit prospects.

$Apple (AAPL.US)$Microsoft$Alphabet-A (GOOGL.US)$/$Alphabet-C (GOOG.US)$, $Tesla (TSLA.US)$, Nvidia, and meta platforms.$Amazon (AMZN.US)$and $Meta Platforms (META.US)$Global investors continue to flock to the seven major technology giants in 2023 and the first half of 2024, primarily because they are betting on the best possible position to use artificial intelligence technology to expand revenue due to the huge market size and financial strength of these technology giants.

In addition, the resilient global economic growth, coupled with the bet that the world's largest central bank (the Federal Reserve) will cut interest rates, has also boosted market investment sentiment. However, the controversial US presidential election to be held in November may undermine this rebound.

Currently, fund managers are betting that companies that master AI technology, whether focusing on AI infrastructure (such as Nvidia AI GPU) or AI software (such as ChatGPT), may continue to surpass already high performance expectations and market share expectations. They expect that traditional industries, including materials, traditional energy, clean energy, and industry, will also benefit from this global investment frenzy in AI.

Saira Malik, chief investment officer at Nuveen Asset Management, said: "There is no doubt that Nvidia is currently the biggest winner in this field (AI), basically, no matter what." The fund led by Saira Malik holds Nvidia, Apple, and Amazon as its largest positions, and believes that these large tech giants will be the biggest winners of the AI frenzy. "Almost every company that wants to turn to the AI trend basically has to use Nvidia's products," Malik said.

AI will continue to be the core driving force of the stock market! Some economists have called out that AI is expected to help the S&P 500 index rise to 7,000 next year.

Among the more than a dozen institutional investors surveyed by the media, most institutional investors expect the MSCI global stock market index, the global benchmark for the future six months, to rise by 9%. The US stock market, which has the largest weight in the MSCI global stock market index, is most likely to outperform the global stock market benchmark. These investors believe that the investment frenzy surrounding the stock market on AI is far from over. After a brief adjustment, the stock prices of AI leaders such as Nvidia, which have repeatedly hit new highs, will continue to drive the global stock market to new heights. Against this background, most investors said they would choose to buy stocks or tend to buy on dips, even at such high prices.

These investors believe that the investment frenzy surrounding the stock market on AI, which has never been seen before, is far from over. The stock prices of AI leaders such as Nvidia, which have repeatedly hit new highs, will continue to drive the global stock market to new heights after a short adjustment. Against this background, most investors said they would choose to buy stocks or tend to buy on dips, even at such high prices.

Neil Shearing, chief economist at Capital Economics, believes that AI may help the S&P 500 index reach a historical high of 7,000 in 2025, although he also sees similarities with the previous "internet bubble" period. Shearing wrote in a client report on Monday: "The experience of the Internet bubble suggests that the valuation of the US stock market can go further up-the additional multiple expansion expectations driven by AI optimism are why we believe that the S&P 500 index may reach 7,000 points next year. The reason."

Shearing said that what is happening now seems to be that AI is following the "Gartner Hype Cycle," which shows how public perceptions of new technology evolve over time (see figure below). Shearing insists that the AI revolution will begin to have a positive impact on economic growth in the second half of this decade.

Ronald Temple, chief market strategist at Lazard, said: "The stock market still has room to rise at its current level." "If you look back over the past few months, the decline is actually very small, partly because there is money waiting outside to be invested. Therefore, waiting for the economy to decline may actually be a bad strategy."

The focus will soon shift to the profit data of large tech companies such as Nvidia. Market expectations are high, and Wall Street analysts generally predict that the overall EPS of S&P 500 index components in the next 12 months will reach a historic high, and the Q2 earnings expectations of the Magnificent 7 are also very high. If the earnings of some of these giants fall short of expectations, they may trigger a correction in the S&P 500 index, which these giants occupy with high weight. The upcoming US earnings season will begin on July 12, when Wall Street's major banks, including JPMorgan, will be the first to report their second quarter results.$JPMorgan (JPM.US)$

"I am bullish on the stock market overall." Sophie Huynh, senior cross-asset strategist at the Paris-based asset management organization of BNP Paribas, said. "We are in the last mile of the global fight against inflation. From both the perspective of P/E ratio and profit growth, this should be favorable for the stock market."

One of the highlights of this quarter will once again be the financial results of AI leader Nvidia-the evidence that investors are looking for whether the AI boom is still continuing. So far, the actual performance of this chip giant has far exceeded Wall Street's high performance expectations for several quarters, but the valuations of the US technology giants have generally risen sharply, making them face the risk of larger-scale sell-offs due to disappointing performance, prompting some investors to choose to take profits.

It is understood that the overall expected P/E ratio of the basket of stocks tracking AI-related stocks compiled by Goldman Sachs is about 32x, which is much higher than the 21x of the S&P 500 index.

However, institutional investors generally believe that the boost to profit growth brought about by artificial intelligence, coupled with the upcoming interest rate cut cycle and stable economy, will continue to support the stock market.

"We are witnessing an explosion of innovation, which may greatly push the economy up in the next few years relative to market expectations." Dan Kim, portfolio manager and senior investment analyst at Saturna Capital, said.

"AI will continue to be the core driving force of the stock market!" Some economists have called out that AI is expected to help the S&P 500 index rise to 7,000 next year.

Global companies are rushing to lay out the AI boom and it is unstoppable.

Meanwhile, top Wall Street investment banks continue to insist on a bullish view of Nvidia, which is known as the 'AI leader', on its stock price trend over the next 12 months. It is widely believed that global demand for Nvidia's H100/H200 AI GPUs is still very strong, and the next generation of AI GPUs based on the Blackwell architecture is expected to make a huge revenue contribution. Together, the 'CUDA software and hardware collaborative platform + high-performance AI GPU' make up Nvidia's formidable moat.

According to research reports by the well-known research institution IDC, the total AI investment in software, hardware, and related services covering AI-centric systems worldwide is only about USD 132.49 billion in 2022, but it is expected to grow to USD 512.42 billion in 2027 with an annual compound growth rate (CAGR) of up to 31.1%, and will fully focus on generative AI fields like ChatGPT.

According to the latest IDC survey, it is expected that 45% of companies will master and use generative AI tools to jointly develop digital products and services by 2027, striving to double revenue growth compared to their competitors. IDC also predicts that the global generative AI market will have a compound annual growth rate of 85.7%, and the size of the global generative AI market will be close to 150 billion USD by 2027. All of these indicate that Nvidia, which occupies a dominant position in the AI core infrastructure field, is expected to continue to benefit from this unprecedented AI boom in the coming years.

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 on Nvidia's stock price have emphasized that Nvidia's stock price will continue to rise and may reach 150 or even 200 USD this year. This means that Nvidia's market cap will surpass the 5 trillion USD mark. Since the beginning of this year, the average target price of analysts covering Nvidia's stock has also fallen far behind the upward trend of Nvidia's stock price, forcing all analysts covering Nvidia's stock to continuously raise their target price.

On Monday Eastern Time, top Wall Street investment bank Morgan Stanley raised its performance expectations and target stock price for Nvidia by a large margin. After the latest research, the institution believes that Nvidia's performance data this year will be 'strong' due to unparalleled demand. Morgan Stanley raised Nvidia's target stock price for the next 12 months from 116 USD to 144 USD, and maintained its 'shareholding' rating for Nvidia.

Rosenblatt, a well-known Wall Street investment institution, recently released a heavyweight research report. The core content is that based on the potential prosperity expectations of Nvidia's software business based on CUDA, even though the stock price of the AI chip leader Nvidia has skyrocketed in one year, its stock price will continue to climb in the next 12 months. In addition to the huge GPU hardware revenue brought by CUDA being firmly bound to Nvidia's AI GPU, and the revenue generated by the large-scale enterprise-level application of CUDA, the software business derived from CUDA is also an engine that generates huge revenue for Nvidia CUDA.

The above is the opinion of Hans Mosesmann, a chip industry analyst at Rosenblatt. In this research report, he raised the institution's target stock price for Nvidia over the next 12 months from 140 USD to an astonishing level of 200 USD per share, ranking it as the highest target price for Nvidia on Wall Street.

Editor / jayden