Yes. That article by the portfolio builder is good and made me think more. The macro situation always affects stock valuations. Nvidia’s stock valuation has been weighed down by other factors besides the Iran conflict. Almost all analysts give buy recommendations because their cash flow models indicate the stock is undervalued. But the stock market does not believe those calculations. The Microsoft stock chart below tells me that the market constantly wants to sell American mega-cap companies.
Microsoft is weighed down by OpenAI uncertainty. Uncertainties regarding OpenAI’s listing exist because the current macro situation is not favorable for an IPO. I think that an as-yet unlisted OpenAI has had it easy outside the stock market. Its pricing outside the stock market is more prone to unreality than that of listed companies, which have to perform every day.
The market also anticipates that Microsoft will announce that international trade has suffered due to increasing sovereignty demands, and Microsoft is running a strong campaign in Europe that it defends European sovereignty values. Microsoft is investing heavily in Europe because its market position is weakening. Microsoft is now putting up a strong fight, and that eats into margins.
I think the market has an AI overload. And because the bad news from Nvidia’s most important customers is yet to come, this is also anticipated in Nvidia’s stock price.
Nvidia’s low valuation is part of the stock market. It is what it is. Fluctuation between euphoria and uncertainty. Now uncertainty beats euphoria.