Nvidia, the popular chipmaker, has experienced rapid growth that has led to its market valuation reaching the same level as the entire Chinese stock market. According to Bank of America's chief investment strategist, Michael Hartnett, Nvidia's market capitalization has reached $1.7 trillion, equivalent to the combined value of all Chinese-listed companies on the Hong Kong Stock Exchange.
This surge in value for Nvidia has been remarkable, with the company's market cap almost quadrupling since the beginning of 2023. In fact, its stock price has soared by 239% in 2023 alone and has continued to rise by 41% in 2024. Currently, only four US public companies have a higher valuation than Nvidia.
On the other hand, China's stock market has faced difficulties due to a sluggish economy, a prolonged real estate market crash, and deflation. As a result, the Hang Seng index, which represents Hong Kong-listed Chinese stocks, has declined by 26% over the past year and 8% year-to-date.
However, Hartnett points out that there may still be opportunities for investors who can identify Chinese stocks with strong management, solid balance sheets, and robust earnings. He draws a comparison to Japan's Nikkei collapse in the 1990s, where a select group of 15 companies possessing these characteristics rallied to a 400% bull market.
Overall, Nvidia's rapid growth has propelled its market valuation to the same level as the entire Chinese stock market. While China's stock market has faced challenges, there may still be potential for investors who can identify strong Chinese companies.