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Just one week ago, Nvidia became the world’s most valuable company.

The chipmaker – whose shares had risen nine-fold since the end of 2022 – overtook Microsoft as its stock market valuation reached $3.34trn (£2.63bn).

Since then, the shares have fallen by 13%, declining in each of the last three trading sessions.

That has been enough to clip more than $500bn (£394bn) from Nvidia’s stock market valuation reached when, last Thursday, the shares hit an all-time intra-day high of $140.76 (£110.94) each (taking into account the 10-for-one share split completed earlier this month).

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To put that into context, Exxon Mobil – the 14th biggest company in the S&P 500 index and itself one of only a dozen companies ever to achieve the status of the world’s most valuable company – has a stock market valuation of $511bn.

So what is going on?

There are a number of factors at play.

The first is profit-taking. Nvidia shares, prior to last Thursday, had enjoyed a fantastic run and had attracted a lot of hot money from so-called “momentum buyers” who see a stock moving higher and jump on board to profit from the ride.

It was natural for such buyers to lock in profits by selling.

Added to that is that speculative money has moved on. A report published over the weekend in the Wall Street Journal that Meta Platforms, the parent of Facebook, has held talks with Apple about integrating Meta’s generative AI model into the recently unveiled Apple Intelligence system sent shares in both higher as profits from Nvidia’s recent strong run were recycled.

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Last week: Nvidia overtakes Microsoft

That money has not left the market – it has simply been redeployed from Nvidia to other stocks, not least Meta and Apple, but also elsewhere.

That can be shown by the fact that the sell-off in Nvidia, while also dragging down peers such as Broadcom, Taiwan Semiconductor, and Super Micro Computer (a server maker which is a heavy buyer of Nvidia’s chips), did not lead to a wider sell-off.

The Dow Jones, admittedly not as good a barometer of the US stock market as the S&P 500, hit its highest level for a month on Monday even as the S&P 500 and Nasdaq, both of which have a heavier weighting in Nvidia, were falling.

Also contributing to the sell-off was the revelation – via a filing to the main US financial regulator, the Securities & Exchange Commission – that Jensen Huang, Nvidia’s founder and chief executive, has taken advantage of the recent rise in the share price to reduce his holding.

Mr Huang, who founded Nvidia in 1993, sold just under $95m (£74.9m) worth of shares between Thursday 13 June and Friday 21 June. Nor is Mr Huang – who still owns more than 866 million shares in Nvidia worth $102.3bn (£80.3bn) at Monday evening’s closing price – the only director to have been selling recently.

Nvidia CEO Jensen Huang present NVIDIA Blackwell platform at an event ahead of the COMPUTEX forum, in Taipei, Taiwan June 2, 2024. REUTERS/Ann Wang
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Nvidia CEO Jensen Huang is among directors to have recently sold shares

Mark Stevens, a veteran venture capitalist who has been on the Nvidia board since 2008, has offloaded $28m (£22m) worth of shares this month while Tench Coxe, another VC who was one of Mr Huang’s earliest backers and who has been on the board since the start, has sold $119.5m (£94.1m) worth.

Selling by directors is not always a reliable guide to a company’s prospects. Sometimes it reflects personal factors, such as a divorce or estate planning, rather than indicating what a director thinks of a company’s prospects. Rightly or wrongly, though, it is usually taken as a negative signal.

Perhaps the most significant factor in the sell-off, though, is that some investors have been looking at Nvidia through traditional investment yardsticks.

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The main one of these is the price/earnings (P/E) ratio. The higher the P/E ratio is, the more expensively a stock is valued.

Last week, after its latest gains, shares of Nvidia were changing hands at 45 times expected earnings.

To put that in context, the forward P/E of the S&P 500 is 22 times and the Nasdaq only slightly more. Put another way, investors were ascribing more than twice the value to Nvidia’s future earnings as they were to those of its peers.

Moreover, as the influential investment magazine Barron’s pointed out at the weekend, Nvidia was being valued at some 20 times its expected sales for the year to the end of January 2026 – a racy valuation, to say the least.

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Stocks with those kinds of valuation have to justify it with spectacular earnings growth.

Yet, as Barron’s columnist Eric Savitz pointed out, Nvidia’s quarter-on-quarter earnings growth has, over the last four quarters, slowed from 88% to 34% to 22% to 18%. Now, quarter-on-quarter earnings growth of 18% is still pretty spectacular. But it does not quite justify a price/earnings multiple that has gone from 25 to 45 over the last year.

Pointing out that from 1976 to 2020, stocks trading at P/E rations of over 15 tended to underperform, Mr Savitz added: “I know what you’re thinking. It’s different this time. This is AI! And sure, maybe AI really is the most important thing to happen in technology since cloud computing, or the internet, or mobile phones, or even the personal computer. But the numbers worry me.

“Nvidia’s market value is now nearly five times the industry estimate for next year’s global chip sales-yes, the total from every company worldwide. Microsoft has seven times the number of employees Nvidia does, and twice the sales. Apple has five times the staff, and triple the sales volume. Nonetheless, this past week, Nvidia’s market cap vaulted past them both.”

Mr Savitz was not the only investment columnist suggesting that, perhaps, Nvidia’s shares might be over-valued.

Some of Monday’s sell-off was also fuelled by the highly influential ‘Heard on the Street’ column in the Wall Street Journal which, at the weekend, invited readers to cast their minds back to the dot-com bubble at the beginning of the century and, in particular, to the gyrations seen at that time in shares of Cisco Systems.

Cisco, the Journal reminded its readers, was favoured along with stocks such as IBM, Lucent and Intel – companies whose hardware were at the forefront of connecting households and businesses to the internet. By the end of 1999, it had become the world’s most valuable company.

The comparison with Cisco has undoubtedly dented sentiment towards Nvidia in some quarters.

Pointing out that today Cisco is now valued at 40% less than it was back then, the Journal highlighted that, at its peak in March 2000, Cisco shares were valued at 131 times forward earnings despite a less impressive financial performance than that recently shown by Nvidia.

Read more:
How Nvidia climbed to the top of the market

Stressing that Nvidia was not is frothily valued as Cisco had been, the column added: “That doesn’t necessarily make Nvidia’s shares safe at their current level, though.

“The stock has seen a big influx of individual investors since the company’s latest financial results last month. Daily retail inflow has averaged nearly $141m since the earnings compared with a daily average of about $39m during the month prior, according to Vanda Research.

“Sell-side analysts are also getting rather exuberant. Several have pushed up their price targets since the stock’s 10 June split. And at least four of those targets are now at $160 and higher, which would put Nvidia’s market capitalization near $4trn at its current share count.

“Nvidia may be the top gun of AI, but investors should be careful not to write checks the stock can’t cash.”

Quite so.

AI is still a nascent technology and it is impossible to know, from here, who may be the greatest winners from it over time.

Just as investors back in 1999, trying to predict who would be the world’s biggest winners from widespread adoption of the internet, could not have known.

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Jeffrey Epstein’s most lucrative currency was people – six years after his death, he continues to haunt those who knew him

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Jeffrey Epstein's most lucrative currency was people - six years after his death, he continues to haunt those who knew him

Framed photos with presidents, princes and even the pope adorned the many homes of Jeffrey Epstein.

This article contains images and language that some readers may find disturbing.

The disgraced New York financier’s most lucrative currency was people. He made a career out of connections with world leaders in politics, business titans and science’s most lauded brains.

The man formerly known as Prince Andrew, Andrew Mountbatten-Windsor, described Epstein‘s appeal in his infamous TV interview: “He had the most extraordinary ability to bring extraordinary people together and that’s the bit that I remember, going to the dinner parties where you would meet academics, politicians, people from the United Nations. It was a cosmopolitan group of what I would describe as US eminence.”

His network was not just US-based but the global elite – among them hedge fund owners, bankers and hoteliers.

But as more and more new documents and photos are made public, we can build up an intimate portrait of a man who kept so much private.

Read more: Dozens more images of Epstein’s island released

Another man once called a prince, but of darkness this time, Peter Mandelson, described his “best pal” as a “prolific networker”. Epstein’s friends crossed political parties – Republican and Democratic – and continents.

Epstein and Mandelson. Pic: US House Oversight Committee
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Epstein and Mandelson. Pic: US House Oversight Committee

Epstein’s Palm Beach mansion was just a seven-minute drive from Donald Trump‘s Mar-a-Lago. In 2002, Mr Trump told New York Magazine: “I’ve known Jeff for 15 years. Terrific guy. He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side.”

They are said to have fallen out while competing to purchase a mansion in 2004.

Trump and Epstein at a party together in 1992. Pic: NBC News
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Trump and Epstein at a party together in 1992. Pic: NBC News

Jeffrey Epstein and Ghislaine Maxwell meeting Pope John Paul II
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Jeffrey Epstein and Ghislaine Maxwell meeting Pope John Paul II

The release of thousands of Epstein’s personal emails shows he had had plenty of world leaders in his inbox.

The former prime minister of Norway and former president of the Maldives sought his advice on politics and finance respectively.

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Inside Jeffrey Epstein’s private island

An enigma

Epstein’s emails are short, often abrupt and riddled with spelling mistakes. The impression he wanted to give: he was a busy man, an enigma. You were lucky to be getting a reply.

He cared about appearances – his own and of the women he abused. He dated many models, including a former Miss Sweden. He followed a strict diet to keep lean and insisted the women in his life did the same.

A drawing in Epstein's 50th birthday book
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A drawing in Epstein’s 50th birthday book

His now notorious 50th birthday book is packed full of candid snaps, some featured here, that flaunt his lavish lifestyle. It is also brazen in its relishing of Epstein’s proclivity for young women. Images of scantily clad women are included in photos and doodles.

The anecdotes from his wealthy, powerful friends are often smutty or innuendo-led. “It’s no secret that Jeffrey appreciates beautiful women. But not many people know that he can create them out of thin air,” reads one.

Massages were entry route to abuse

Epstein’s black book of contacts had lengthy lists of women lined up for “massages” in Florida, California, New Mexico, New York, London, Paris and his island.

At least 152 women are named in it with phone numbers – they were available on speed dial.

The premise of a massage was often his entry route to abuse. The massages were scheduled, part of his daily routine. Whether on a private jet or his private island, he acted with impunity for far too long.

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Inside Epstein’s island: What do new images tell us?

Epstein did not show remorse for his crimes

Multiple women went to the police to report his actions over the years. But the only jail time he was ever sentenced to was in 2008 after a controversial deal where he pleaded guilty to state charges of soliciting a minor for prostitution. He was sentenced to 18 months in jail, but only served 13 and negotiated the ability to leave the jail six days a week for up to 12 hours a day for work.

Despite becoming a registered sex offender in 2008, he was far from a social pariah. Nor did he show remorse for his crimes.

Even a decade after his conviction, he was still mocking sexual abuse. He wrote in a message to a friend in 2018, “so many guys caught in the me too, reaching out to me. Asking when does the madness stop. Funny,” and then that “breast cancer was easier to cure than the me too movement”.

A picture of Jeffrey Epstein from his 50th birthday book
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A picture of Jeffrey Epstein from his 50th birthday book

‘Epstein claimed if girls had started menstruating they were of age to have sex’

Virginia Giuffre revealed in her memoir that Epstein would say that criminalising sex with teenage girls was a cultural aberration. He would point to different US states having different ages of consent – in Florida it was 18. He claimed if girls had started menstruating they were biologically of age to have sex.

Documents released by the House Oversight Committee reveal he paid to “clean up” what came up about him on Google after his conviction. On 11 December 2010 he bemoaned that despite forking out thousands, “the google page is not good” in an email.

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The Epstein files released last month: Sky’s US correspondent Mark Stone explains

‘An extraordinary volume’ of naked photos of young girls

On 6 July 2019, Epstein was arrested on federal charges related to sex trafficking after his private jet flew into the US from Paris.

“An extraordinary volume” of naked photos of young girls were found in his New York town house. Authorities also found a safe containing 48 loose diamonds, $70,000 (£52,000) in cash and three passports belonging to the sex offender. The expired Austrian passport had a photo of Epstein, but a different name and an address in Saudi Arabia.

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On 10 August 2019, Epstein was found dead in his New York prison cell while awaiting trial. Forty-eight hours before he died he signed a will which put his assets in a trust, the beneficiaries of which remain private.

Epstein’s most vocal victim, Ms Giuffre, who took her own life this year, closes her memoir Nobody’s Girl saying: “Epstein is dead but the attitude that allowed him to do what he did, it’s alive and well.”

Six years after his death, Epstein continues to haunt those who knew him. Some may be scared – for their reputation, careers and for what more could still come out.

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US national parks drop free admission on MLK Day and Juneteenth, but add Trump’s birthday

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US national parks drop free admission on MLK Day and Juneteenth, but add Trump's birthday

Americans will be able to visit national parks for free on Donald Trump’s birthday next year, but will no longer be able to do so on Martin Luther King Jr Day or Juneteenth.

The Department of the Interior has released a list of what it calls “resident-only patriotic fee-free days” for next year.

Mr Trump‘s birthday, which falls on the Flag Day national holiday, has been added to the list, as has the Fourth of July weekend and President Theodore Roosevelt’s birthday.

However, Martin Luther King Day and Juneteenth have been removed. Juneteenth was recognised in 2021 under Joe Biden’s administration and commemorates the end of slavery in the US.

Also removed are the anniversary of the Great American Outdoors Act in August and the National Public Lands Day in September.

“President Trump’s leadership always puts American families first,” the US interior secretary Doug Burgum said.

“These policies ensure that US taxpayers, who already support the National Park System, continue to enjoy affordable access, while international visitors contribute their fair share to maintaining and improving our parks for future generations.”

Read more from Sky News:
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The department said it was also introducing “America-first entry free policies”, which means US residents will continue to “enjoy affordable pricing” while international visitors “will pay a higher rate to help support the care and maintenance of America’s parks”.

It said the annual pass will cost $80 (£60) for US residents and $250 (£187) for nonresidents, with nonresidents without an annual pass paying a $100 (£75) per person fee to enter 11 of the most visited national parks, in addition to the standard entrance fee.

The US Institute of Peace. Pic: AP
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The US Institute of Peace. Pic: AP

Trump renames US Institute of Peace after himself

The decision to make his birthday a ‘free’ day comes after Mr Trump’s name was added to the sign on the headquarters building of the United States Institute of Peace in Washington DC.

The State Department shared a photo of the building’s new facade and called Mr Trump “the greatest dealmaker in our nation’s history”.

He has also unsuccessfully put himself forward for the Nobel Peace Prize, sought to put his name on the planned NFL stadium in Washington DC, and had a new children’s savings programme named after him.

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White House: Europe ‘unrecognisable in 20 years or less’

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White House: Europe 'unrecognisable in 20 years or less'

President Trump’s “America First” agenda has been spelt out in a new White House National Security Strategy that should make stark reading for allies and foes of the United States alike.

The new 33-page document outlines an upending of American foreign policy objectives and priorities which have stood largely unchanged through different administrations stretching back decades.

The document says American strategy went “astray” over many years. It seeks to reframe America’s strategic interests as being far narrower now than at any time in its modern history.

Among the key points, the document says:

Europe faces “civilizational erasure” and could be “unrecognisable in 20 years or less”

• “Certain NATO members will become majority non-European” within a few decades

•​​​​​​​ America will “shift away” from the “burden” of the Middle East seeing it now as a “source and destination of international investment”

•​​​​​​​ In the Western hemisphere, America should pursue a policy of “enlist and expand… restoring American pre-eminence”

•​​​​​​​ In Africa, American policy focus should be on trade not “providing and spreading liberal ideology”

America will 'shift away' from the 'burden' of the Middle East. Pic: Reuters
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America will ‘shift away’ from the ‘burden’ of the Middle East. Pic: Reuters

In black-and-white, the text articulates a dramatic strategic shift which has been playing out at lightning speed over the past year.

The document underlines the end of the concept of America as an arbiter of the democratic rules-based order.

“American foreign policy elites convinced themselves that permanent American domination of the entire world was in the best interests of our country. Yet the affairs of other countries are our concern only if their activities directly threaten our interests,” the paper says.

Every US administration publishes at least one National Security Strategy during a presidential term.

The focus of this one is starkly different from that published by President Biden in 2022.

It’s also notably different from the document which President Trump published during his first term. His 2017 paper cast the world as a contest between “repressive regimes” and “free societies”.

Trump doesn't want the US to be the arbiter of the democratic rules-based order. Pic: Reuters
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Trump doesn’t want the US to be the arbiter of the democratic rules-based order. Pic: Reuters

This new one places the necessity to do trade above the imposition of values.

“We seek good relations and peaceful commercial relations with the nations of the world without imposing on them democratic or other social change that differs widely from their traditions and histories.”

Mass migration and Europe

The new document is highly critical of mass migration.

It warns that uncontrolled migration is destroying the concept of nation states which could impact America’s strategic alliances and the countries it counts as reliable allies.

The paper is particularly critical of Europe, of the European Union as a concept and of individual European nations.

“Should present trends continue, the continent will be unrecognizable in 20 years or less,” the paper says.

It continues: “As such, it is far from obvious whether certain European countries will have economies and militaries strong enough to remain reliable allies.

“Many of these nations are currently doubling down on their present path. We want Europe to remain European, to regain its civilizational self-confidence, and to abandon its failed focus on regulatory suffocation.”

Trump will seek to support 'patriotic European parties'. Pic: AP
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Trump will seek to support ‘patriotic European parties’. Pic: AP

The document’s language around the politics of governing parties across Europe is particularly stark.

Regarding Ukraine, the document says: “The Trump Administration finds itself at odds with European officials who hold unrealistic expectations for the war perched in unstable minority governments, many of which trample on basic principles of democracy to suppress opposition.

“A large European majority wants peace, yet that desire is not translated into policy, in large measure because of those government’s subversion of democratic processes.”

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The document outlines how his administration will seek to support “patriotic European parties”.

This is entirely in line with President Trump’s rhetoric but still represents a major departure from the longstanding principle of not interfering in the politics of allies.

It says: “American diplomacy should continue to stand up for genuine democracy, freedom of expression, and unapologetic celebrations of European nations’ individual character and history.

“America encourages its political allies in Europe to promote this revival of spirit, and the growing influence of patriotic European parties indeed gives cause for great optimism.”

Trump has at times had a fiery relationship with Ukraine's President Zelenskyy. Pic: Reuters
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Trump has at times had a fiery relationship with Ukraine’s President Zelenskyy. Pic: Reuters

Ukraine and Russia

On European-Russia relations, the document raises the prospect of war but curiously does not presume that such a conflict would involve America.

“Managing European relations with Russia will require significant US diplomatic engagement, both to reestablish conditions of strategic stability across the Eurasian landmass, and to mitigate the risk of conflict between Russia and European states.”

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By contrast, President Biden’s National Security Strategy, published in 2022, underlined repeatedly the “iron-clad” commitment the United States had to Europe’s security.

Chinese risk and opportunity

The document presents Asia and the Indo-Pacific region as a source of opportunity for strategic and economic cooperation.

Maintaining US military strength over China is also outlined. Pic: Reuters
Image:
Maintaining US military strength over China is also outlined. Pic: Reuters

“President Trump is building alliances and strengthening partnerships in the Indo-Pacific that will be the bedrock of security and prosperity long into the future…”

And specifically on China, the paper presents a goal of “economic vitality” achieved through a balanced economic relationship between the two countries combined with an “ongoing focus on deterrence to prevent war”.

Deterrence would be achieved, it outlines, by maintaining preeminent military strength over China.

It says: “This combined approach can become a virtuous cycle as strong American deterrence opens up space for more disciplined economic action, while more disciplined economic action leads to greater American resources to sustain deterrence in the long term.”

Hemispheres of influence

In line with President Trump’s focus on spheres of influence, particular focus is given to the western hemisphere.

There are clear references to the impact of drugs from south and central America into the US and more subtle references to control of the arctic.

“The United States will reassert and enforce the Monroe Doctrine to restore American pre-eminence in the Western Hemisphere, and to protect our homeland and our access to key geographies throughout the region,” the paper says.

It continues: “We will deny non-Hemispheric competitors the ability to position forces or other threatening capabilities, or to own or control strategically vital assets, in our hemisphere.”

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