Nvidia's remarkable growth trajectory has led to a valuation equivalent to the entirety of China's stock market.
According to a recent research note by Bank of America's chief investment strategist, Michael Harnett, Nvidia's market capitalization surged by $600 billion in just two months, reaching a staggering $1.7 trillion. This places Nvidia on par with the combined market capitalization of all companies listed on the Hong Kong Stock Exchange.
The chipmaker's market value has nearly quadrupled since the beginning of last year, with its stock witnessing a remarkable 239% surge in 2023 alone. As of Thursday, its shares are up by 41% this year, positioning Nvidia as one of the top five most valuable public companies in the United States.
In contrast, China's economic challenges have led to a downturn in its stock market. Sluggish economic growth, a prolonged downturn in the real estate sector, and deflationary pressures have contributed to a 26% decline in the Hang Seng index over the past year and an 8% decline year-to-date.
However, Harnett suggests that there may be opportunities for investors who can identify Chinese stocks with strong management, healthy balance sheets, and robust earnings. He draws parallels to Japan's Nikkei collapse in the early 1990s, where a select group of 15 companies with these characteristics experienced a remarkable 400% bull market rally.
