Everyone knows share prices have a long way to fall. Even so, getting out now might be a mistake
Sales of Nvidia’s most advanced chips “are off the charts”, said Jensen Huang on November 19th, while reporting his firm’s highest-ever quarterly revenues. The boss of the world’s most valuable company had much to celebrate. It raked in $57bn in the three months to October, at a gross profit margin of over 70%—the stuff of investors’ dreams. Yet the following day Nvidia’s share price fell by 3%. It is now 13% below its peak in October.
Across markets, the mood among shareholders has shifted from bullishness to fatalism. Stocks have been soaring for years, fuelled by hopes that artificial intelligence will supercharge profits—hopes that most professional investors now think have become overly optimistic. In the grand scheme of things, the recent sell-off is eminently bearable. Although the S&P 500 index of big American firms is down by 4% since its peak in October, it is also up by 84% since a trough in 2022. But for stocks to fall when the news is good is a troubling hint that a long bull market might at last be running out of steam. Traders are on edge, and in the coming week will be alert to signs that the sell-off might accelerate.
