The market is betting that the Fed’s plan for just one rate cut is a bluff. Still, the market is expecting more cuts. Late last year, the market was expecting six rate cuts. When that didn’t happen, investors kept buying stocks at high prices.
Concerns about a tech bubble are growing. NVDA shares are trading at 77 times earnings.
Since the stock market is a futures pricing device, the forward growth of AI server suppliers justifies a $3.24 trillion valuation.
Apple (AAPL) shares soared from $195 to nearly $220 this week on euphoria over the company’s AI announcements. Apple Intelligence incorporates ChatGPT, a third-party AI provider. Microsoft (MSFT) has already adopted ChatGPT into its Office 365 product suite. Users can also access AI through Microsoft’s CoPilot service.
risk
Amazon showed signs of selling pressure after the chart showed a “multiple tops” peak at $190.
Your takeaway
The tech bubble is in the middle stage, and surges in Taiwan Semiconductor (TSM) and Broadcom (AVGO) suggest traders could enjoy further stock gains this week.
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