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Nvidia breaks market records, and Japan’s potential
After its results were published this week, Nvidia has now broken records with an all-time high for the biggest single session increase in market value in history, beating Meta’s noteworthy gain of $197 billion a few weeks ago. Shares jumped another 16%, adding $277 billion to its market cap. This has cemented the importance of AI in everyday life, as the AI powerhouse can’t manufacture enough chips for computing. There is a massive surge in demand for accelerated computing and generative AI. To put things in perspective about Nvidia’s meteoric rise, they only reported $27 billion in revenue for 2022. Nvidia’s market cap is now just short of $2 trillion, making it the world’s 4th largest company after Microsoft, Apple and Saudi Aramco.
Despite Japan falling into a recession, 2024 could be the year investors rediscover Japan’s potential and start investing in Japanese companies again. This comes after the Nikkei 225 jumped 2%, reaching new heights of 39,029, breaking the record set in 1989.
The sudden boost comes from the corporate earnings reporting from robust Japanese companies. This includes banking, electronics and consumer stocks. “The corporate sector’s ability to weather economic challenges and deliver strong earnings signals resilience and adaptability.” Says deVere financial advisory CEO, Nigel Green.
Several economists and investment experts predict Japan’s economy will strengthen throughout the year. Nori Chiou of White Oak Capital, Singapore, says, “I think Japan’s stock market (will) likely see further upside this year thanks to one of (the) reasons of high interest from global institutional investors. We can see evidence like the surge in foreign buying in Japanese stocks, reaching nearly $30 billion in 2023 and continuing in the beginning of this year, (which) underscores a significant trend.”
The surge in the Nikkei could be directly linked to the AI boom and Nvidia reporting this week, and the USD/JPY pair is holding onto levels above 150, which could boost Japanese equities.
The above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.
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