US stock AI bubble?

NVIDIA $NVDA had a price-to-earnings ratio of 52.8 on November 7, reaching a five-year high of 240(, and a peak in July 2023 of ).

Broadcom $AVGO had a P/E ratio of 87.16 on November 7, close to a five-year high of 229(, projected for December 2024 ).

Superpower $AMD has a P/E ratio of 115.01 on November 7, a five-year high of 1376( in July 2023 ).

Microsoft $MSFT has a price-to-earnings ratio of 35.2 on November 7, nearing a five-year high of 40(2024 in July 2024.

Google ) PE ratio of 27.08 on November 7, near five-year high of 38$GOOGL 2021 in April 2021.

Amazon ( had a price-to-earnings ratio of 34.16 on November 7, reaching a five-year high of 323) in March 2023.

$AMZN November 7th PE ratio 26.77 near five-year high 37(2023 July ).

You can't just say it's a bubble by only looking at the stock price increase, can you?!

The price-to-earnings ratio is the stock price divided by earnings per share, which is suitable for reflecting bubbles.

Here we use PE-TTM, which equals the total market value divided by the net profit of the past four quarters, and it is also equal to the stock price divided by the sum of earnings per share over the past four quarters.

Nvidia's latest financial report has not yet been released, but as long as the net profit for the most recent quarter is greater than the net profit for the same period last year, the price-to-earnings ratio will be lower than it is now.

So this indicates two things:

First, the AI sector in the US stock market may have a bubble, but it is not particularly large. AI stock prices are high, but they correspond to a certain level of profit growth, rather than being purely speculative bubbles.

Second, the market clearly fears high valuations, so $NVDA's market cap > $AVGO's market cap > $AMD's market cap, while $NVDA's P/E ratio < $AVGO's P/E ratio < $AMD's P/E ratio.

NVIDIA and the S&P 500 both had a pin bar on November 7, which may signal a potential stage bottom.

Of course, provided there are no black swans.

The ongoing government shutdown in the United States is undoubtedly a negative factor, but this event does not have explosive potential. Unless it causes a sudden and significant negative impact, it is not a black swan.