US nears half of global stock market cap value, highest level in 2 decades

[F-22Raptor]

TOKYO/NEW YORK/HONG KONG -- As Chinese tech companies struggle with an economic slump and fall behind in artificial intelligence, U.S. corporations now account for nearly half of global stock market value, the highest level of concentration in two decades.

 

[Get Ya Wig Split]

NVIDIA is breaking records every day.

It's a shame that idiot ruined my thread about the US stock market.

 

[Get Ya Wig Split]

Full article:

TOKYO/NEW YORK/HONG KONG -- As Chinese tech companies struggle with an economic slump and fall behind in artificial intelligence, U.S. corporations now account for nearly half of global stock market value, the highest level of concentration in two decades.

Mainland Chinese and Hong Kong companies have shed the equivalent of $1.7 trillion in value since the end of 2023, QUICK FactSet data shows.

China's share of global market capitalization in dollar terms has dropped to around 10%, roughly half the peak of nearly 20% reached in 2015 when investors anticipated faster economic growth.

The U.S. total has risen $1.4 trillion over the same period to $51 trillion, putting the country's share at 48.1%, the largest since September 2003. The gap between the U.S. and China has widened to the largest on record in data going back to 2001.

This divergence largely reflects the differing fortunes of their biggest tech companies. Amazon and Facebook parent Meta together have gained $510 billion in market cap since the end of last year, lifted by strong quarterly earnings announced last week. Meanwhile, Chinese e-commerce leader Alibaba Group Holding and gaming and social media group Tencent Holdings lost a combined $31 billion in value over the same period.

The world's 500 most valuable companies included 236 American names as of Friday, up 15% from three years earlier, while the Chinese tally fell roughly 60% to 35. Chinese search giant Baidu, major e-commerce player JD.com and electric vehicle maker Nio all have fallen off the list.



At the end of 2020, Tencent and Alibaba were among the top 10 and closing in on their American counterparts. They had established themselves as leading platform operators in China's market of 1.4 billion people, and high growth expectations led many global investors to add them to their portfolios.

But they have lost steam in recent years.

While Google parent Alphabet recently reported record quarterly revenue and net profit as U.S. economic growth fueled its advertising business, China's lackluster recovery from the COVID-19 pandemic has forced the country's tech giants to rethink their expansion plans. Alibaba reportedly is considering selling some consumer operations, including grocery stores, in what would be a big strategic shift for a group that has sought to span online and brick-and-mortar shopping.

The American edge in the global artificial intelligence race also has brought attention back to U.S. tech.



Chipmaker Nvidia, the world's sixth most valuable company, holds a near-monopoly in powerful processors used for generative AI. Chinese groups like Tencent lost ready access to these chips after Washington in 2022 essentially banned exports of advanced semiconductors to China over concerns about civilian technology being used by the military.

China looks to produce the necessary chips domestically, but U.S. export curbs on chipmaking gear from suppliers like Applied Materials are hindering its ability to catch up. Semiconductor Manufacturing International Corp. -- China's leading contract chipmaker -- has lost around one-quarter of its market value since the start of 2024.

Chinese tech companies also are grappling with Beijing's campaign to rein in their influence. Regulators unexpectedly proposed restrictions on online games late last year, underscoring again the regulatory risk facing investors.

Last quarter, U.S. asset management company Baron Capital cut China investment in a global growth-stock fund to zero for the first time since the fund's creation in 2012. Portfolio manager Alex Umansky cited regulatory crackdowns as well as "growing geopolitical tensions."

Investors are seeking alternative Asian destinations for their money, such as India, whose presence in the top 500 market cap list has roughly doubled over the past three years to 21 names. High expectations for the country's growing population and rising incomes have fueled buying of companies focused on domestic demand like state-run Life Insurance Corp.

Renewed interest in stable Japanese companies has slowed the decline in the country's share of global market capitalization. Toyota Motor's valuation in dollar terms is nearly on par with Tencent's, putting it in the running for the third most valuable Asian company behind Taiwan Semiconductor Manufacturing Co. and Samsung Electronics.

 

[VCheng]

TOKYO/NEW YORK/HONG KONG -- As Chinese tech companies struggle with an economic slump and fall behind in artificial intelligence, U.S. corporations now account for nearly half of global stock market value, the highest level of concentration in two decades.

And cue the bots: it’s a bubble!

 

[Get Ya Wig Split]

Nvidia’s now worth as much as the entire Chinese stock market​

With one going up and the other down, Nvidia is now worth as much as the entire Chinese stock market, represented by the H shares of the Hong Kong stock market.

That’s a point made by Michael Hartnett, Bank of America strategist, who also notes that the $600 billion market cap rise in Nvidia NVDA, -0.65% over just the last two months equals the entire market cap of Tesla TSLA, +1.06%.

Nvidia has soared 228% over the last 52 weeks, while the Hang Seng HK:HSI in Hong Kong has dropped 26%.

Hartnett was focusing more on China’s woes than Nvidia’s AI-inspired gains. He made a comparison between China’s struggles now and Japan’s in the 1990s.



He said as the Nikkei collapsed from 40,000 to 20,000 in the 1990s, there was a big 400% bull market for 15 stocks. Especially in a deflationary bear market, a small portfolio of what he called “best of breed” stocks, with strong management, balance sheets, and EPS growth, can be very profitable, he said.

As for the U.S. stock market, he said positioning is flipping from a tailwind to headwind, though he said the old market adage is, “tops are a process, lows are a moment.” He said there’s no stopping what he calls a bubble until the 10-year yields, adjusted for inflation, are above 2.5%. The 10-year TIPS rate is 1.91%.

But he did say a number of Bank of America’s rules are closing in on sell signals, such as the cash levels reported in its fund manager survey, or inflows to risky assets.

The S&P 500 index SPX closed at a record high for the ninth time this year on Thursday and has gained 22% over the last year.

Nvidia’s now worth as much as the entire Chinese stock market

With one going up and the other down, Nvidia is now worth as much as the entire Chinese stock market, represented by the H shares of the Hong Kong stock market.

www.marketwatch.com

BONUS:

Arm shares surge 48% after SoftBank-controlled chip designer issues strong forecast​

• Shares of chip designer Arm climbed 48% on Thursday.
• The company reported better-than-expected earnings for the third quarter, and issued an optimistic forecast.
• SoftBank still owns about 930 million shares of the chip designer, or roughly 90% of its outstanding stock, and founder Masayoshi Son is Arm’s chairman.

Shares of chip designer Arm soared 48% on Thursday after the chip design company reported better-than-expected earnings and issued a strong profit forecast for the current quarter.

The stock surge added about $38 billion to Arm’s market cap, with more than $34 billion of that accruing to SoftBank, which owns 90% of the company.




Arm’s chip design technology is in most smartphones and many PCs. The company reported adjusted earnings per share of 29 cents, topping the average analyst estimate of 25 cents, according to LSEG, formerly known as Refinitiv. Revenue rose 14% to $824 million, beating the $761 million average estimate.

For the current quarter, Arm projected earnings per share of between 28 cents and 32 cents on sales of $850 million to $900 million. Analysts were expecting earnings of 21 cents per share on sales of $780 million. At the midpoint of its revenue range, Arm is looking for revenue growth this quarter of 38%.

Founded in 1990 and acquired by Masayoshi Son’s SoftBank in 2016 for $32 billion, Arm went public on the Nasdaq in September. The company sold shares at $51 apiece in its IPO and was trading above $122 on Thursday. Son remains chairman of the company and he’s joined on the board by SoftBank’s Ron Fisher.

Arm makes money through royalties, when companies pay for access to build Arm-compatible chips. That usually amounts to a small percentage of the final chip price.

Arm said its customers shipped 7.7 billion Arm chips during the September quarter, the most recent period for which figures are available. Arm counts Apple, Google, Microsoft and Nvidia as customers, and the company is riding the artificial intelligence wave, as more companies need hefty processors to run their workloads.

“We are seeing the demand for Arm technology to enable AI everywhere, from the cloud to edge devices in your hand,” Arm wrote in its shareholder letter for the quarter. “The most demanding AI applications are already running on Arm today.”

Because of SoftBank’s overwhelming control of the stock, Arm shares remain thinly traded compared to other large-cap companies. That could change in the coming months after the post-IPO lockup period ends in March and insiders, including SoftBank, are finally able to sell shares.

SoftBank on Thursday showed a solid recovery in its Vision Fund investment group due to a recovery in the value of tech companies. The Vision Fund, known in part for its notoriously bad bet on WeWork, logged a gain on investment of 600.7 billion Japanese yen ($4.02 billion), its biggest increase since March 2021.

SoftBank’s flagship tech investment arm had a rough time in the fiscal year that ended in March last year, posting a record loss of around $32 billion amid a slump in tech stock prices and the souring of some of the business’ bets in China. The company’s cumulative loss on WeWork topped $14 billion.

Arm shares surge 48% after SoftBank-controlled chip designer issues strong forecast

Shares of Arm climbed 48% on Thursday after the company reported better-than-expected earnings and a strong forecast.

www.cnbc.com

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S&P 500 Breaks 5,000 For First Time In History​

The S&P 500 topped 5,000 for the first time ever Thursday, a weighty breakthrough as the stock market navigated a challenging economic environment and a devastating 2022 to new heights.

S&P 500 Breaks 5,000 For First Time In History

The benchmark stock index is up 43% from its October 2022 nadir as investor confidence was miraculously restored in the face of high interest rates.

www.forbes.com