bear2034 said:
Nvidia is the stock market. The stock market is Nvidia.
Today, the overall market is down due to stubborn inflation, and Nvidia is up since it just beat and raised once again despite lofty whisper numbers.
You can always invest in equal weighted S&P 500 index if you are concerned about overweighing of the Magnificent 7 in the S&P 500 index funds. The reality is that, while S&P 500 was primarily driven by the top 7 in 2023, the equal weighted S&P funds have actually performed better than S&P 500 overall this year., with value doing relatively well beginning of the year.
Nvidia and AMD (which I think people are not giving enough attention to) will continue to play an outsized role in the move to AI. More and more companies will need computing power to handle AI. I have been preaching Nvidia for years here, first because of the computing power needed for crypto mining and now because of amazing amount of processing capacity needed for AI. There are not a lot of players who can deliver what they can deliver. I have been investing in them for decades starting in 2000 when gamers demanded computers include Nvidia graphic chips because of the superior speed of their graphic chips. When a company has almost a monopoly despite competition because of the incremental value add of their products, they will outperform their competition in any market condition and deliver long term return. The management team at Nvdia has always looked around the corner. Like Apple, Amazon, Danaher, Roper, and with this CEO, Microsoft, Nvidia will out execute the competition. Unlike crypto (which, of course, goes down with equity because it's really a growth-based speculation), you can judge management, product superiority, and ability to beat and raise consistently.
Besides, whatever you may think of AI, companies will continue to invest in their AI capabilities. Although I usually don't like to invest in second place player, I even started investing in AMD two years ago. You have to appreciate the secular trends.