- ORIGINAL NEWS
Nvidia rally is fueling FOMO in the overall market, Evercore’s Julian Emanuel warns
- SUMMARY
Nvidia’s exceptional rally in the stock market has created a “fear of missing out”, even among those who remember the dot-com bubble.
Julian Emanuel, a senior managing director at Evercore ISI, warns of similarities to the Y2K era, marked by excessive optimism, especially in artificial intelligence and the belief that the U.S. will avoid a recession.
Nvidia’s stock has skyrocketed, but Emanuel anticipates a potential 13% pullback this year, which is normal given the non-recessionary environment.
Although Emanuel recommends taking profits and reducing exposure in some sectors, he suggests focusing on defensive sectors, such as consumer staples, health care, money markets, and communication services, which offer stability and yield.
His analysis suggests a year-end target for the S&P 500 at 4,750, reflecting a potential 5% decline from its recent heights.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“Nvidia, the global leader in artificial intelligence chips, is up 46% so far this year and 240% over the past year.”
“Emanuel’s top picks also include consumer staples, health care and money markets.”
Negative
“Julian Emanuel thinks Nvidia’s monster rally is fueling a fear of missing out in the market.”
“This time around, he cites excitement around artificial intelligence and the idea the U.S. will avoid a recession as major catalysts.”