Nvidia(US:NVDA) Zhong Jin Zai Xian·2025-11-12 03:15Core Insights - The AI trading led by Nvidia has faced setbacks recently, but there was a brief recovery in interest at the beginning of the week. However, news of SoftBank liquidating its Nvidia shares and pressure signals from AI cloud service provider CoreWeave dampened market sentiment again [1][5] - Investors are caught between the fear of missing out on AI trading profits and the concern of repeating the internet bubble scenario [2] Investment Recommendations - Wells Fargo has advised investors to reduce their exposure to technology stocks and shift funds to three other sectors. The S&P 500 Information Technology sector rating was downgraded from "Overweight" to "Neutral" due to high valuations [3] - From April 4 to October 24, the S&P 500 Information Technology sector saw a cumulative increase of 60%, significantly outperforming the S&P 500 index [3] - Despite the downgrade, the sector still has favorable factors, including revenue and profit growth driven by AI, low debt levels, and strong free cash flow generation capabilities [3] Market Concerns - The valuation of the IT sector has surged, raising concerns about overly optimistic sentiment and high expectations that could lead to short-term disappointments [4] - The IT sector remains a focal point in international trade negotiations, and ongoing tensions have not fully dissipated. Concerns about return on investment and debt financing can lead to market volatility [4] - The recent liquidation of Nvidia shares by SoftBank, amounting to $5.8 billion, has intensified fears that the AI boom may have peaked [5] Sector Allocation Suggestions - It is recommended to reduce investments in technology stocks and consider reallocating funds to three sectors rated as "Attractive": industrials, utilities, and financials. These sectors are expected to benefit from the growing trend of auxiliary data centers and favorable regulatory environments [4]