Analysis of the primary factors behind the buying of AI-related stocks like NVIDIA following the US jobs report, and the backing of real demand
I will share the analysis results regarding the background of why NVIDIA was bought.
The primary factor behind the buying of AI-related stocks, including NVIDIA, in the US market on Friday, August 7, was that the non-farm payrolls in the July employment report released by the US Department of Labor fell significantly below market expectations. As reported by major economic media outlets such as Reuters, this unexpected deterioration in employment caused expectations for additional interest rate hikes by the US Federal Reserve to recede, leading to a decline in US long-term interest rates.
👉 US Employment Statistics article link within note
Generally, in a period of falling interest rates, funds tend to flow into high-tech stocks and AI-related growth stocks that anticipate future profit growth, but it was not just the expectation of falling interest rates that drove this round of buying.
As reported by Reuters market news, the strongest basis for this is that the real demand for next-generation semiconductors for AI data centers is extremely robust in the business environment surrounding semiconductor-related stocks such as NVIDIA and Broadcom. The multi-trillion yen AI capital investment plans revealed by giant IT companies like Microsoft and Alphabet in their recent earnings reports support the market as an unshakable fact.
👉 Link article // Reuters.com/Market/Japan
Furthermore, with the US government's move to consider import restrictions on Chinese-made data center components, the awareness of the company's superiority in supporting high-performance communication computing infrastructure was reaffirmed, which also led to a sense of security for investors.
Thus, the essence of this buying is the convergence of the macro tailwind of falling interest rates and the growth of the real economy driven by massive AI infrastructure investment.
In a phase where market uncertainty is increasing, the ability to flexibly manage risk by adjusting to changing situations while identifying solid facts, rather than being swayed by short-term price movements, can be called the ultimate work technique for achieving results.
※ This article does not recommend the buying or selling of any specific stock. Please make investment decisions at your own risk.
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