--- title: "\"The king of the universe stocks\" plummeted by more than 10% overnight, but its competitive advantage remains solid, and it is about to enter a high-probability bottom-fishing zone!" description: "U.S. stocks have historically had the "September curse". Overnight, U.S. stocks got off to a bad start in September, posting their biggest declines since August 5. The Dow fell more than 620 p" type: "topic" locale: "en" url: "https://longbridge.com/en/topics/23659857.md" published_at: "2024-09-04T13:12:41.000Z" author: "[读财报话新股](https://longbridge.com/en/profiles/794333)" --- # "The king of the universe stocks" plummeted by more than 10% overnight, but its competitive advantage remains solid, and it is about to enter a high-probability bottom-fishing zone! The U.S. stock market has historically had the "September Curse" Overnight, U.S. stocks started September with a decline, marking their biggest drop since August 5. The Dow fell over 620 points, dropping below 41,000. The S&P 500 fell over 2%, while the Nasdaq and small-cap indices fell over 3%. The VIX volatility index surged over 40% at one point. ![Image](https://pub.pbkrs.com/uploads/2024/0bcce935bd8652400147794bfc3bdfc1?x-oss-process=style/lg) NVIDIA$NVIDIA(NVDA.US) plummeted 9.53%, hitting a three-week low, with its market cap losing $279 billion—the largest single-day market cap loss in U.S. stock history, surpassing Meta's $251 billion loss in February 2022 after earnings. Our past analyses of NVIDIA have always been validated, and this time, the "Stock King" has once again seen a significant drop. Let’s analyze it again!! ....... Sharp short-term stock movements boil down to two factors: fundamentals or sentiment. Let’s examine NVIDIA on both fronts. **1\. Any major changes in fundamentals?** NVIDIA’s market cap surpassed Apple’s in recent years to become the new "Universe Stock King" due to its high-end chips. **NVIDIA’s chips fall under its Data Center segment in financial reports.**   Data shows the Data Center segment set another record in Q2 revenue, hitting $26.3 billion, up 154% YoY, accounting for 87.46% of total revenue—up 0.82 percentage points QoQ. ![Image](https://pub.pbkrs.com/uploads/2024/108eae49708226c87955c93451c12cd5?x-oss-process=style/lg) **Current trends suggest Data Center growth will continue:** ① Sustained AI spending by clients and supply shortages + faster product iterations. Last quarter, major cloud providers like Google, Microsoft$Microsoft(MSFT.US), Amazon, and Meta$Meta Platforms(META.US) ramped up AI investments. The four giants’ combined capex hit $57 billion in Q2, up 22.4% QoQ—likely just the beginning. Research predicts up to $1 trillion will flow into AI infrastructure like data centers over the next five years. **② Second factor: NVIDIA’s products remain supply-constrained and keep evolving.** In Q2, accrued liabilities (reflecting backlog) hit $10.289 billion, staying high, while inventory-to-revenue ratio fell to 22.22%—both signaling persistent shortages. ![Image](https://pub.pbkrs.com/uploads/2024/b92896b3c103bfe76112c58488b0a6fa?x-oss-process=style/lg) Meanwhile, R&D spend rose 13.6% QoQ to $3.09 billion, boosting product competitiveness and iteration. In June, NVIDIA announced accelerating product cycles from 2 years to 1 year, unveiling a 3-year roadmap: Blackwell Ultra GPU in 2025, Rubin GPU in 2026, Rubin Ultra GPU in 2027. CEO Jensen Huang added on the earnings call: Blackwell chips will mass-produce in Q4, generating "billions" in revenue. **Conclusion: NVIDIA’s fundamentals aren’t weakening—its chips will stay supply-constrained, with growing competitive edges.** **2\. Any major shifts in sentiment?**   Since NVIDIA hit its all-time high of $140.76 this year, sentiment has shifted notably. **① Biggest shift: Fears of an "AI bubble" bursting.**   After its rally, NVIDIA’s P/E peaked above 70x but has since dropped to ~50x amid recent volatility. Other "Magnificent Seven" tech stocks have similarly pulled back after highs.   The worry? AI stocks’ multi-fold gains may inflate a bubble—prompting profit-taking.   **② Insider selling fuels concerns.** Amid high valuations, Jensen Huang has sold $580 million YTD, while other execs/directors unloaded $700+ million in H1. This amplifies "AI bubble" fears. **③ Antitrust risks loom.** Post-market, reports emerged that the DOJ subpoenaed NVIDIA and third parties for antitrust evidence. Regulators worry NVIDIA locks clients into its AI chips and penalizes non-exclusive buyers. This signals escalated scrutiny into NVIDIA’s alleged monopoly. **3\. NVIDIA’s buying zone is nearing.**   Rational investors weigh fundamentals vs. sentiment to spot overreactions—creating opportunities.   As analyzed, NVIDIA’s fundamentals will only strengthen. Bloomberg estimates a 2024 P/E of just ~27x. This provides solid downside support.   Sentiment shifts are largely priced in after the 40% drop from $140.   So where’s the high-probability buy zone? **Our take: Buy between $90-$99, sell above $120 for 20%-30% gains—the optimal strategy now.**   Why?   At $90+, NVIDIA’s strong fundamentals deter further drops, with buyers waiting. But at $120+, sentiment headwinds resurface—unless earnings vastly exceed expectations. Currently down 10% (after-hours -3%), NVIDIA sits at $104. ![Image](https://pub.pbkrs.com/uploads/2024/67e4d2c850e8c7a165fbeef394f32325?x-oss-process=style/lg) The high-odds buy zone approaches! $AMD(AMD.US) ### Related Stocks - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) - [MSFT.US - Microsoft](https://longbridge.com/en/quote/MSFT.US.md) - [META.US - Meta Platforms](https://longbridge.com/en/quote/META.US.md) - [AMD.US - AMD](https://longbridge.com/en/quote/AMD.US.md) --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.