On April 19th, it could be called "Black Friday" for Nasdaq investors: Nvidia retreated 10%; Technology leaders such as Broadcom, AMD, and Micron have all experienced a pullback of over 4%, and under this influence, the Nasdaq 100 has also adjusted by 2.05%.
After the A-share market opened today (April 22, 2024), related ETFs also saw a pullback. For example, the NASDAQ 100 ETF (159659) fell by 1.12%, with a retracement of about 7%. It has now fallen back to the half year mark.
Data source: Wind
As the saying goes, every squat is for better jumping, and this time the Nasdaq 100 may be creating a "golden pit" for us.
Firstly, let's take a look at the reasons for this adjustment. The adjustment of the Nasdaq and even the entire US stock market, in addition to the impact of lower expectations of the Federal Reserve's interest rate cuts and weak regional winds, may be the most core factor, which is the weakening of performance expectations.
Nvidia, which has led the market up since then, is influenced by the "tenfold annual stock" - ultramicro computers. As a company that sells computer equipment, Microelectronics has close cooperation with companies such as Nvidia and NASA. Previously, it almost always disclosed its explosive performance in advance, giving everyone a shot in the arm for the trend of Nvidia and even the Nasdaq 100. However, this time it did not disclose it in advance as promised, so investors' confidence in the market began to weaken. In addition, the poor performance disclosed by companies such as Asma last week further exacerbated the market's pessimism.
But can this be simply linearly extrapolated to the end of the "long bull trend" of the Nasdaq 100? I have to say no.
On the one hand, Nvidia's performance may not be as pessimistic. Data shows that Nvidia's current orders have been scheduled for 2025, especially with its newly launched GB200. The agency expects sales to reach $90- $140 billion in 2025. That is to say, even if Nvidia's performance falls short of expectations in the short term, it still has strong support in the long term. Perhaps there is no need to worry too much.
On the other hand, short-term adjustments can precisely digest its valuation. As the "shovel seller" of the AI industry, Nvidia was given too high expectations by investors in the past year, which to some extent overdrafted its future earnings, and short-term adjustments can just digest these "valuation foam".
With the decline in Nvidia's stock price and optimistic predictions from institutions regarding its net profit (a year-on-year increase of 581% in 2024), based on current stock prices, it is predicted that Nvidia's P/E ratio for 2025 will decrease to around 33 times. This means that the current may be a good time to counter the trend and expand into technology stocks.
Data source: Wind
Nvidia may not be an exception, as Apple, Tesla, and others have similar expectations. Do you still feel panic about the Nasdaq 100 when you see this? Based on the current situation, if conditions permit, it may even be possible to increase positions in batches to a certain extent. In the long run, it may be a better choice.