"Nvidia's results on Wednesday were keenly awaited but did little to clear this up. It reported yet another set of blow-out results with revenues and earnings up a stonking 62% and 65% respectively on a year earlier on the back of rocketing demand for its chips. And CEO Jensen Huang even dismissed talk of an AI bubble. But while its share price gained as much as 5% immediately afterwards, the gains were short lived."
"The realisation that turkeys - Jensen Huang in this case - don't generally vote for Christmas and that the explosion in chip demand, far from offering reassurance, could itself be a sign of the bubble may have been behind the market's second thoughts. The more sobering comment by the head of Alphabet (Google) that valuations were indeed displaying 'elements of irrationality' will also not have helped."
"Anyway, all this left Nvidia down 6% over the week and off 15% from its end-October high. Alphabet, by contrast, ended the week up 8%, buoyed by news that Warren Buffett's Berkshire Hathaway had recently bought a stake. The performance of the companies making up the Magnificent Seven has become increasingly divergent but, for what it's worth, the group overall lost 2% last week and are off 8% from their high."
Global equities ended the week down 2.1% in both local currency and sterling terms amid growing concern that AI-related valuations may be a bubble. Nvidia posted exceptionally strong results, with revenues and earnings up 62% and 65% year-on-year driven by surging chip demand, yet its near-term share gains proved fleeting. Alphabet executives warned of valuation irrationality while Berkshire Hathaway's stake buoyed Alphabet's shares. The Magnificent Seven showed widening performance dispersion, the group lost 2% for the week and sits 8% below its peak. Regionally, the US and UK fell modestly, Europe and Japan declined more, and China fell about 5% following weak data.
Read at London Business News | Londonlovesbusiness.com
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