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Nvidia just made history. Again.
On Monday, Nvidia stock closed at a record high, its first since November. Investors piled in ahead of CEO Jensen Huang’s highly anticipated CES keynote — perhaps anticipating the large reveals needed to stoke artificial intelligence hype.
Chatting with a packed audience of over 6,000 in Las Vegas, Huang laid down a daring vision for what he called the “era of physical AI.”
“The ChatGPT moment for general robotics is just across the corner,” Huang declared, signaling that AI’s potential is simply starting to materialize in physical systems equivalent to its Cosmos platform. He also spotlighted Nvidia’s partnership with major automakers like Toyota and Volvo, leveraging its DRIVE Hyperion platform to power next-gen autonomous vehicles.
In line with Huang, “Constructing autonomous vehicles, like all robots, requires three computers: one to coach, one to simulate, and one within the automotive. And Nvidia powers all of them.”
At close: January 8 at 4:00:00 PM EST
Futuristic, trillion-dollar visions of Nvidia-powered humanoid robots and self-driving cars dominated investor minds into the early morning, sending the stock to fresh record highs.
But when Wall Street opened for business with the opening bell on Tuesday, a “sell the news” fever gripped Nvidia investors, culminating in a $220 billion drop in market capitalization — its worst in 4 months.
It’s a well-recognized story for Nvidia investors: a record high followed by a rug pull.
Investors got a taste of this most recently after Nvidia’s Nov. 20 earnings release. The stock rocketed north of $150 for the primary time, only to be met with investor selling, resulting in a 13% fall.
It is also paying homage to the June 20, 2024, pop to $140, which was met by a 27% sell-off that caused Nvidia to cede the world’s largest stock title to Microsoft.
An identical story evolved across the disappointing February 2024 monthly jobs report released March 8, which sent stocks reeling. Nvidia opened at a record before posting its worst return in 10 months, resulting in an eventual 20% pullback.
It is also an echo of the Aug. 23, 2023, earnings announcement that rocketed it to $50 for the primary time (on a split-adjusted basis), only to see it frustrate bulls and trade sideways for 4 months.
The underside line is: Nvidia could be the undisputed leader of this bull market, and it has regularly frustrated bulls. Nevertheless it hasn’t yet upset the overall bull market in US stocks.