NVIDIA's stock price soared to a record high, approaching Apple's market value, causing market shock

On Monday, U.S. stock markets closed with a mixed pattern of gains and losses in Eastern Time. The Dow Jones Industrial Average (Dow) fell by 0.80%, the Nasdaq Composite Index (Nasdaq) rose slightly by 0.27%, and the S&P 500 Index slipped by 0.18%. Despite the overall flat performance of the market, NVIDIA's strong performance became the highlight of the day, with its stock price rising by over 4%, hitting a new historical high and pushing its total market value above $3.5 trillion, approaching Apple's $3.6 trillion market value.

NVIDIA's performance undoubtedly attracted all the attention of the market on that day. The company's stock price rose by over 4% at the close compared to the previous trading day, not only setting a new historical high but also pushing its total market value above $3.5 trillion, just a step away from the current highest market value of Apple. Year-to-date, NVIDIA's stock price has accumulated a growth of over 180%, a staggering increase that has amazed investors and market analysts.

Analysts at Bank of America recently stated that they expect NVIDIA's stock price to continue to rise, raising the target price of the stock from $165 to $190, implying about a 38% upside potential for the stock. Bank of America's optimism towards NVIDIA is mainly based on three major driving factors: recent industry events, NVIDIA's corporate partnerships and the undervalued value of its software products, and its ability to generate $200 billion in free cash flow over the next two years.

The latest report released by Tianfeng International Securities analyst Ming-Chi Kuo also supports this optimistic outlook. The report points out that Microsoft is the largest customer of NVIDIA's Blackwell GB200 chip, with orders in the fourth quarter of this year surging 3-4 times, exceeding the total of all other cloud service providers. In addition, Ming-Chi Kuo expects that the capacity expansion of NVIDIA's Blackwell chip will start in the early fourth quarter of 2024, and the shipment volume in the first quarter of 2025 will significantly increase by 200%-250%.

Despite NVIDIA's impressive performance, the further trend of its stock price still faces many challenges. This Wednesday, Tesla will release its financial report, and as an important partner and competitor of NVIDIA, Tesla's performance and future outlook will undoubtedly have an impact on NVIDIA's stock price. In addition, financial reports of tech giants such as Microsoft, Amazon, Google's parent company Alphabet, and Meta will also be released successively, and the performance of these companies may also affect the market's evaluation of NVIDIA's future growth potential.

In the U.S. stock market, most popular Chinese concept stocks fell. The Nasdaq Golden Dragon China Index dropped by about 0.80%, with Baidu falling by over 2%, while Vipshop, Alibaba, NetEase, Nio, Futu Holdings, and others all saw declines of over 1%. Tencent Music, Weibo, JD.com, iQIYI, and Manbang Group fell slightly. However, XPeng Motors rose against the market by over 3%, while Bilibili, Pinduoduo, Li Auto, and others also saw slight gains.

In the foreign exchange market, the U.S. dollar index rose above the 104 level, for the first time since August 2nd, with an intraday increase of over 0.5%. This trend reflects the subtle changes in market expectations for the U.S. economic outlook and monetary policy In the commodity market, WTI crude oil futures for November closed up 1.94% at $70.56 per barrel, while Brent crude oil futures for December closed up 1.68% at $74.29 per barrel. The rise in oil prices is mainly supported by geopolitical factors and expectations of global economic recovery.

COMEX gold futures closed up 0.17% at $2734.70 per ounce, after hitting a historical high during the session but falling sharply towards the end. Spot gold briefly rose above $2740, while silver prices hit a nearly twelve-year high. Analysts believe that the rise in gold prices is mainly influenced by market expectations of the Fed's interest rate cuts stabilizing and geopolitical factors. With the significant increase in international gold prices, domestic gold jewelry prices have also risen, with the price of some branded pure gold jewelry exceeding 800 yuan per gram.

In terms of monetary policy, Minneapolis Fed President Kashkari stated that he currently leans towards gradually lowering interest rates over the next few quarters, but may advocate for a faster rate cut if the labor market deteriorates sharply. Kashkari pointed out that the current level of interest rates is still acting as a brake on the economy, but the strong performance of the U.S. economy during the Fed's rate hikes and since the rate cut last month suggests that the neutral interest rate today may be higher than in the past.

Meanwhile, Dallas Fed President Kaplan also stated that due to various uncertainties in the economic environment, the Fed should be cautious in lowering rates, supporting a "gradual" rate cut approach. Kaplan believes that as the Fed gradually lowers policy rates, U.S. inflation rates may fall to the Fed's target of 2%, and the labor market will not cool too quickly.

Currently, the financial markets expect the Fed to cut rates by 25 basis points at the November meeting. Kaplan pointed out that the Federal Open Market Committee (FOMC) will need to remain flexible and make adjustments when necessary. This stance reflects the Fed's cautious attitude and flexible strategy in dealing with a complex economic environment.

Overall, the U.S. stock market ended Monday's trading with mixed gains and losses, with NVIDIA's strong performance being the highlight. However, with the release of Tesla's financial report and the successive release of financial reports from several tech giants, market volatility and uncertainty may increase. Investors need to closely monitor the impact of these important events on market trends and make appropriate risk management and investment decisions