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Don’t Blame Nvidia
"It's the economy, stupid."
If you're determined to explain why US equities didn't revel in another blowout report from Nvidia -- and assuming you don't want to blame Boeing, which lost more altitude -- you can fall back on James Carville.
Although somewhat unsatisfying, Carville's overused (and overrated) 1992 adage was as good an excuse as any for stocks' underwhelming post-Nvidia performance. It was the economy, stupid. Specifically, it's too damn strong. That means no Fed cuts. Or at least
Being “naked long” with Nvidia served me well today 🙂
Enjoy Nvidia while you can. The trouble with this stock may actually be with the supporting cast, electric power generation and the power grid that sustains it. Estimates say AI and EV growth may double the demands on electric utilities and the associated grid in just the next four years. The trouble is, a new power plant needs 15 years between the plan for it and the receipt of a license for it. Renewables can be put up more quickly but the solar option is increasingly dependent on Chinese-made panels and neither of our prospective presidents likes China. I frequently drive by a construction site in a small KC suburb where a large data center is under construction. The construction is around the clock and has lasted more than a year so far. To accommodate this data center required the construction of not one, but two new large substations, each larger than a nearby existing one that supplies the whole town. As many as 500 new data centers are envisioned annually for the next several years. Add in EV growth and we have the makings of a major constraint on Nvidia’s continuing growth. Just sayin’.