Nvidia Goosed 401(k) Millionaires

“History shows us, over and over, that bull markets can go well beyond rational valuation levels as long as the outlook for future earnings is positive.”

– Peter Bernstein

[Special Reminder: In case you missed our recent announcement, The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If you’re interested in the scope and benefits of our new endeavor, please see what prompted us to merge here. If you’ve been a member of The Essential Investor, please keep an eye out for your new benefits.]

May 24, 2024 – This interesting stat shows the extent of the market’s current rally. It’s the total number of individuals with at least $1 million socked away in their 401(k):

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New 401(k) millionaires can thank Nvidia, in part, for their own investing genius.

This single company alone – which has more than doubled since the start of 2024 – accounts for 5.8% of the S&P 500 by weight.

The $2 trillion dollar AI chip maker is also one of the greatest threats to the stock market and individual investor wealth we’ve seen since funds were overweight mortgage-backed securities in 2007 — 08.

We’re doing a deep dive into the meaning of AI for the June Grey Swan Bulletin we send to paid readers.

In it, we’ll introduce new Grey Swan contributor Zoltan Istvar, who, if anybody does, has the perfect name to match his status as a world-renowned futurist.

Further introductions are on the way…

Also, one company we’re looking into is a small cap producing energy for server farms dedicated to AI computing.

With a gain of 412% over the past 12 months, the company’s share growth has outpaced Nvidia. We haven’t decided whether to pull the trigger yet, but the energy sector for AI is intriguing, to say the least.

The case for waiting to buy in, at this point, is largely made by the Global Markets Investor substack post we’ve republished below.

Hint: The company’s market cap is now larger than the stock market in Germany, South Korea and Australia… enjoy! ~~ Addison

NVIDIA is One of the Largest Threats
to the U.S. Stock Market

Global Markets Investor

On Wednesday, after the market closed, Nvidia released its financial report for the fiscal first quarter 2025. The company’s earnings per share came at $5.98, above Wall Street estimates of $5.57. Revenues in first quarter were $26.04 billion, beating average forecasts of $24.55 billion. Adjusted gross margin came at 78.9%, above the analysts projected 77%. As you can see, these are really great results and substantially exceeded expectations.

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Moreover, in the last four quarters, Nvidia’s revenue has tripled year-over-year and reached $79.77 billion.

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What caused the stock to move higher, however, was the 2Q 2025 sales outlook of $28.0 billion (plus, minus 2%) which came significantly above Wall Street estimates of $26.8 billion. The chip-maker also announced a 10-for-1 stock split and raised its quarterly dividend by 150% to 10 cents a share.

As a result, Nvidia rallied by 9.3% on Thursday and closed above the $1,000 per share mark for the first time ever. The company added $217.7 billion to its market value in just one day, more than the combined market cap of McDonald’s and Ford and almost $80 billion more than the value of Intel.

The below meme perfectly shows Thursday’s and the last few quarters of U.S. stock market developments.

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On Thursday, the S&P 500 closed down by 0.7% and the Nasdaq by 0.4% as recent economic data showed that inflation has not been easing. However, if not for Nvidia’s 9% gain, the stock market would have easily dropped by more than 2%.

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Nvidia’s performance indeed looks great, and the company has been materially exceeding market expectations for the last two years. However, have the things not moved too far and too quickly?

The company has become so great that it should be considered as the largest threat to the U.S. stock market performance in the months ahead. ~~ Global Markets Investor

So it goes,

Turn Your Images On

Addison Wiggin,
The Wiggin Sessions

P.S. Monday is Memorial Day, and the stock market is closed. As has been our modus operandi for decades now (oof!), we’re not going to publish on Monday. Enjoy your long weekend!

(How did we get here? An alternative view of the financial, economic, and political history of the United States from Demise of the Dollar through Financial Reckoning Day and on to Empire of Debt — all three books are available in their third post-pandemic editions.)

(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites:Bookshop.org; Books-A-Million; or Target.)

Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com

“History shows us, over and over, that bull markets can go well beyond rational valuation levels as long as the outlook for future earnings is positive.”

– Peter Bernstein

May 24, 2024 – This interesting stat shows the extent of the market’s current rally. It’s the total number of individuals with at least $1 million socked away in their 401(k):

Turn Your Images On

New 401(k) millionaires can thank Nvidia, in part, for their own investing genius.

This single company alone – which has more than doubled since the start of 2024 – accounts for 5.8% of the S&P 500 by weight.

We’re doing a deep dive into the meaning of AI for the June Grey Swan Bulletin we send to paid readers.

In it, we’ll introduce new Grey Swan contributor Zoltan Istvar, who, if anybody does, has the perfect name to match his status as a world-renowned futurist.

Further introductions are on the way…

Also, one company we’re looking into is a small cap producing energy for server farms dedicated to AI computing.

The case for waiting to buy in, at this point, is largely made by the Global Markets Investor substack post we’ve republished below.

Hint: The company’s market cap is now larger than the stock market in Germany, South Korea and Australia… enjoy! ~~ Addison

NVIDIA is One of the Largest Threats
to the U.S. Stock Market

Global Markets Investor

Turn Your Images On

Moreover, in the last four quarters, Nvidia’s revenue has tripled year-over-year and reached $79.77 billion.

Turn Your Images On

The below meme perfectly shows Thursday’s and the last few quarters of U.S. stock market developments.

Turn Your Images On

Nvidia’s performance indeed looks great, and the company has been materially exceeding market expectations for the last two years. However, have the things not moved too far and too quickly?

The company has become so great that it should be considered as the largest threat to the U.S. stock market performance in the months ahead. ~~ Global Markets Investor

So it goes,

Turn Your Images On

Addison Wiggin,
The Wiggin Sessions

P.S. Monday is Memorial Day, and the stock market is closed. As has been our modus operandi for decades now (oof!), we’re not going to publish on Monday. Enjoy your long weekend!

Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com

Trump and Powell are no buddies. They’ve been fighting over rate cuts all year—Trump demanding more, Powell holding back. Even after cutting twice, Trump called him “grossly incompetent” and said he’d “love to fire” him. The tension has been building for months.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

Trump has been dropping hints for weeks—saying on November 18, “I think I already know my choice,” and then doubling down last Sunday aboard Air Force One with, “I know who I am going to pick… we’ll be announcing it.”

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Here we sit — investors, analysts, retirees, accountants, even a few masochistic economists — gathered beneath the leafless monetary tree, rehearsing our lines as we wait for Jerome Powell to step onstage and tell us what the future means.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

With U.S. stocks trading at about 24 times forward earnings, plans for capital growth have to go off without a hitch. Given the billions of dollars in commitments by AI companies, financing to the hilt on debt, the most realistic outcome is a hitch.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

As copper flowed into the United States, LME inventories thinned and backwardation steepened. Higher U.S. pricing, tariff protection, and lower political risk made American warehouses the most attractive destination for metal. Each new shipment strengthened the spread.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.

Nvidia Goosed 401(k) Millionaires – Beware

NVIDIA is One of the Largest Threats
to the U.S. Stock Market

Nvidia Goosed 401(k) Millionaires – Beware

NVIDIA is One of the Largest Threats
to the U.S. Stock Market

Nvidia Goosed 401(k) Millionaires – Beware

NVIDIA is One of the Largest Threats to the U.S. Stock Market

Nvidia Goosed 401(k) Millionaires – Beware

NVIDIA is One of the Largest Threats to the U.S. Stock Market

NVIDIA is One of the Largest Threats
to the U.S. Stock Market

NVIDIA is One of the Largest Threats
to the U.S. Stock Market