🚀It’s time for a re-assessment; then came Nvidia’s boost.🚀

🎯Stocks were coated with Fed worries for a large part of April, only to run up with stellar performance after Fed Chair Powell dismissed the possibility of a rate hike as the next move. This gave rise to major indexes riding up on the high. 

🎯The latest FOMC minutes release does cause investors to feel uneasy, as many committee participants felt the need to tighten monetary policy further should inflation risks evolve further. This deviates from a more dovish comment from the FOMC conference meeting. 

🎯Stocks dived sharply after the minutes were released. Then came Nvidia, which cleared a high bar of expectation. As one of the most important companies in the artificial intelligence field, with a market capitalisation in excess of $2 trillion, its chips and technology powered major data centres globally. This success can be attributed to specific factors such as strong demand for AI technology, strategic partnerships, or innovative product development. 

🎯The latest earnings showed earnings jumped 262% in the current quarter compared to a year ago, and revenues rose an impressive 461%. This beats the highly inflated Wall Street expectation and thus clears the path for the stocks to rise sharply in the after-hours. In CEO Jensen Huang’s words, “The next industrial revolution has begun”. 

🎯To bring investors back to a more pragmatic reality, Nvidia is unlikely to grow infinitely at such a robust rate. We are seeing revenue growth of about 18% on a quarterly comparison basis, and earnings rose by a mere 19%. Hence, at some point, the law of large numbers, which states that as a company grows, its growth rate will inevitably slow, is likely to tame the big figures. This means that the law of large numbers could affect Nvidia’s growth, such as saturation of the market, increased competition, or diminishing returns.