AI stocks are fluctuating! Has the biggest mountain reached? Amid NVIDIA's sharp decline, what are the high retrograde stocks

When checking the causes of the sharp rise and fall, it was suggested that 8/2 is likely to be the biggest mountain range. This time, I will sort out the background factors and points of interest. In addition, stocks with good financial results that have gone retrograde amidst rough market prices will also be checked.

Factors behind the sharp rise and fall of AI stocks
●Factors for the rise on July 31
1) Federal Reserve Chairman Powell suggests September interest rate cuts　
　⇒ High-tech stocks are bought in anticipation of interest rate cuts
2) AMD announced good financial results and revised the sales forecast for AI semiconductors upward　
　⇒ The benefits of the AI investment boom extended to AMD, and not only AMD but also semiconductor stocks such as NVIDIA rebounded
3) Microsoft says it will further increase investment in AI　
　⇒ The expansion of investment by Microsoft, which is leading the way in investing in AI, indicates the continuation of the AI investment boom

●Factors for the decline on August 1
1) Diverging financial results
For example, Microsoft showed an expansion of investment in AI, but the rate of increase in sales in the cloud business did not reach market expectations. Azure's sales for the 4-6 fiscal year increased 29%, and growth decelerated slightly from a 31% increase in the previous fiscal year. The contribution from AI was about 8 points, up from 7 points in the previous quarter, but stock prices fell. It suggests that investors are responding sensitively to even a slight decline in performance.

2) Recession concerns
Prior to the announcement of employment statistics on the 2nd, there were a series of indicators showing uncertainty about the future of the economy. First, the ISM manufacturing business climate index for July became 46.8, deteriorating from 48.5 in June. It fell short of market expectations and fell below 50, which is the boundary between expansion and contraction of activity for 4 consecutive months. Next, the July portion of ADP employment statistics, which is a leading indicator of employment statistics, increased by 0.122 million people, and growth was the lowest since January. The number of new unemployment insurance claims was at a high level for the first time in almost a year. Signs of deterioration in the labor market were shown, and concerns about a recession intensified.

What is the biggest mountain? Points of interest after that
While multiple economic indicators are sending signals of economic deceleration, the FOMC the day before did not cut interest rates in July. If the employment statistics for 8/2 also show a recession signal, there may be a possibility that the Fed is taking a backward turn in response. In other words, it's a fear of “policy mistakes.” Intense sales to tech stocksRecession concerns+concerns about the Fed's policy mistakesIt is thought that it was in the background.

Regarding AI stocks led by NVIDIA,”Anxiety that profit growth from huge investments in AI will not be as large as expected”It is also a sales factor. This anxiety was also taken up in the previous financial results season. Why are they being more alert this time around? It is thought that this is because “concerns about recession+concerns about the Fed's policy mistakes” are falling apart.

Therefore, employment statistics are more important than anything else in the near future, and tonight (8/2) may be the biggest peak. If a recession signal is also emitted from employment statistics, the Fed's July interest rate cut postponement may be judged as a policy mistake, which may induce further caution.

Next, in confirming profit growth due to the AI boom, NVIDIA's financial results scheduled for 8/28 will be more important. Big Tech's financial results were mixed, but investment in AI is expected to expand, which can be said to be positive material for NVIDIA. On the other hand, based on the fact that stock prices of some big techs have plummeted due to a slight decline in performance, investors' “tolerance” has declined. There is a possibility that performance pressure on NVIDIA is also increasing. Note, as of 8/2, according to analystsAverage target share price is $140.50It has become.

If you check the stocks that are performing well,Defensive stocks such as public welfare and pharmaceuticalsstood out. If the soft market continues due to growing concerns about a recession, these strong performance/defensive stocks may continue to attract attention in the future.