Why can one company move the market?

After presenting the results, the artificial intelligence giant adds 250,000 million to its market value with an increase of 12%: this is the capitalization of Inditex, Iberdrola and Santander combined.

Global stock markets marked a new historical milestone after the results of one company became known: Nvidia. whose market capitalization is equivalent to $1.7 trillion, which is the sum of the five largest listed companies in all of Europe: Novo Nordisk, LVMH, ASML, Nestlé and L’Oreal. Never before (perhaps Apple a few years ago with the first iPhone) have investors paid so much attention to the results of a listed company, perhaps also because never before has the capitalization of a handful of technology companies determined the pace of markets in such an obvious way. . “Nvidia is the most important stock on planet Earth”“say Goldman Sachs analysts.

Yesterday, the semiconductor (chip) maker seen as the ultimate expression of the future of artificial intelligence showed that the stock market rally it saw last year – 227% excluding this Thursday – is nothing compared to the rise in its year-over-year results. Its revenues grew by 265% and exceeded 20.4 billion euros. Its profits rose 769% to $12.285 million from $1.400 million a year ago.

Not only is the market pricing in Nvidia’s crazy growth, but there are other, more important messages hidden behind these numbers. Can it be said that there is bubble among American technology companies? Experts, aware that weight seven magnificent It reaches stratospheric proportions, you won’t believe it. The best example of this is that Nvidia is trading at 30 times earnings, while within bubbledot com in 2000 they significantly exceeded 100, 200 and 500 times.

Bank of America analysts admit that yes, that The seven listed are “expensive” because they are “valued at an average of 45 times earnings.”but they remember at the time that the so-called “FAANG (Facebook (today Meta), Amazon, Apple, Netflix and Google (now Alphabet)) peaked at 60 times and the Nasdaq 100 index peaked at 205 times during the dot-com bubble between 1998 and 2000.”

The remaining six giants American tech is Microsoft and Apple, which are approaching $3 trillion in capitalization, Alphabet and Amazon, which exceed $1.75 trillion, Meta (formerly Facebook) is above $1.19 trillion in market value, and Tesla, which has declined in recent weeks. (27% loss since January 1), which exceeds $620 billion. The EV company founded by the eccentric Elon Musk has just the same market value as all the Ibex 35 companies combined.

Is the path of artificial intelligence exhausted? Nvidia has proven that this is not true. Jen-Sun Huang, the company’s CEO, said yesterday that “generative artificial intelligence and accelerated computing have already passed the boiling point. Demand is growing rapidly around the world, across all types of companies, industries and countries.” This means, and this is how the market interpreted it, that there is still a long way to go.

At the opening of the session this ThursdayNvidia shares rose 12%, representing an additional capitalization of $250 billion.. This is equivalent to the combined value of Ibex’s three largest companies: Inditex, Banco Santander and Iberdrola. The national selection as a whole has a capitalization of 640 billion euros and lags behind.

Japan’s benchmark stock market index, the Nikkei 225, hit a new all-time high this morning in and around Europe, and Wall Street has now joined in on the buying, which has also consolidated new levels never seen before. This is the case with the German Stock Exchange in Frankfurt, the Paris Stock Exchange (Cac 40) and even the London Stock Exchange. Spain, Italy and Portugal cannot say the same. They’re too far away. In particular, more than 30% below the highs reached in 2007 in the case of Capricorn and in 2000 in step from Milan.

He weight loss The progressiveness of the fact that the periphery suffers from contrasts with the higher valuation of the places of Paris and Frankfurt, where the capitalization of their underlying indices (as in the case of Dax) exceeds 1.6 trillion euros, and in Paris it exceeds 2.57 billion. London is far away, with a capitalization of €2 trillion in the FTSE 100 index, which brings together the UK’s main listed companies.

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