TNC Daily Open: Nvidia Slips as Nasdaq Hits New High

This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.

What To Note Today

Dow’s losing streak

The Dow Jones Industrial Average fell 0.25% on Monday, marking the eighth consecutive day of losses—the longest since 2018. The Nasdaq Composite surged 1.24% to conclude at a new high, while the S&P 500 gained 0.38%. Tuesday’s Asia-Pacific markets showed mixed results. Following reports that lawmakers intended to raise the nation’s budget deficit in 2025, China’s CSI 300 increased by about 0.4%.

Nvidia

On Monday, Nvidia’s stock dropped 1.7% to settle at $132. That puts Nvidia in correction zone because it is around 11% off its closing high of $148.88 in November. However, a correction does not always indicate a long-term downward trend, since Nvidia is still up 166% this year. Furthermore, Broadcom and other chipmakers continue to push forward.

Creating Tokyo’s Waymo

Waymo said on Monday that it will begin testing its driverless cars in Tokyo in 2025. It’s the first time the Alphabet-owned business has entered a foreign market, and it’s a left-hand drive. Waymo’s partners in Tokyo will include the local taxi company Nihon Kotsu and the cab app GO.

Investment motivator or deterrent?

Due to a rule that requires businesses to invest in or obtain components within the nation, Indonesia banned the sale of Apple’s iPhone 16 in October. Apple is currently being asked by the government to invest $1 billion in Indonesian cell phone component production. Analysts, however, believe that such strategies to attract foreign investment may backfire.

Smaller European businesses

In recent weeks, Trump’s purported emphasis on the domestic economy has drawn attention to and inflows into small and mid-cap companies in the United States. According to Deutsche Bank strategists, European businesses of that size are likewise anticipated to beat their bigger counterparts in the upcoming month.

Bottom Line

The stock market can be likened to a Mario Kart game.

(In case you haven’t experienced the delights of Mario Kart, it’s a racing game that features Mario from Nintendo and his companions.)

One second you’re comfortably ahead, and the next you’re lagging behind someone who’s speeding past you because you made a mistake on a turn.

At the moment, Nvidia is in that advantageous position.

The annoying thing for Nvidia and its investors is that, except from a Chinese regulator’s investigation, there haven’t been any significant setbacks: The company’s fundamentals are actually stable.

Nvidia’s place in the semiconductor and AI industries hasn’t changed, as Keith Lerner, co-chief investment officer at Truist, notes. Lerner stated, “You need Nvidia, and you need their chips for infrastructure.” However, I believe the market is also indicating that there are other beneficiaries.

This shift into other semiconductor and AI-related equities is evidenced by the Nasdaq Composite closing at yet another high despite Nvidia’s decline.

The most notable move was the sharp gain in Broadcom shares, which surged higher on Friday and Monday following a strong fourth-quarter earnings report and higher price targets set by banks.

This stock has been driven by momentum. Kim Forrest, chief investment officer of Bokeh Capital Partners, stated, “I don’t think momentum is going to kill it just yet, but momentum does what momentum does, which is seek the higher flyer.”

The main distinction between playing Mario Kart and the stock market is that the latter is a zero-sum game, meaning that you lose if your friend wins, whereas the former isn’t necessarily the case. No matter who wins the race, you can profit from owning both Nvidia and Broadcom.

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