US stocks have pulled back after a recent surge, and the tech index Nasdaq may be the most at risk.
NAS 100 – Daily Chart
The NAS 100 is on the second day of pullback, and investors should be careful about buying a dip as there could be a significant pullback.
Recent economic indicators and statements from the Federal Reserve have impacted market outlooks in the US. Recently, the outlook has been erratic, with expectations of a “soft landing” in the economy and imminent rate cuts. That was followed by a more robust economy and slowing inflation, which confused investors.
The AI hype in US stocks now means that Nvidia has surpassed Amazon.com in market capitalization, with a valuation of almost $1.8 trillion. The following stock in the sights of Nvidia is Alphabet’s Google.
Mizuho said in a client report that its new price target for Nvidia’s stock was $825, up from $625. The Santa Clara, California, company will release its latest earnings on February 21.
Aswath Damodaran says that the “Magnificent 7” US stocks are overpriced while adding that “Nvidia stands out as particularly overpriced.” Damodaran prefers Apple and Tesla out of the group. However, analysts disagree with the New York University finance professor on Apple. Three brokerages downgraded the iPhone maker’s stock last month.
For followers of Damodaran, his belief that Tesla stock is attractive may be a surprise. The analyst also said he plans to sell some Nvidia shares after cutting his holding by half.
In a tweet, the “dean of valuation” said, “There is no point having an investment philosophy, if you don’t act on it.”
