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Nvidia made headlines this week by becoming the first company to briefly hit a $4 trillion market valuation. That makes it more valuable than Amazon, Alphabet, and even Saudi Aramco, combined in some measures of investor optimism

Fueled by overwhelming demand for AI chips, particularly from hyperscalers and large enterprises building out LLM infrastructure, Nvidia’s stock has now surged over 1,000% since early 2023. Its recently launched Blackwell chip architecture (GB200/GB300) promises up to 30x performance gains over previous generations, further solidifying its stranglehold on the AI infrastructure market.

Valuation Anxiety

Despite these strengths, concerns are growing:

• Nvidia trades at ~34× forward earnings, a level that suggests perfection is priced in.
• It now comprises 7.5% of the entire S&P 500, rivalling the kind of dominance once seen with Microsoft and Apple.
• Technical analysts warn that the stock appears overextended, especially relative to its 50-day moving average.

Even some bulls are flashing yellow lights. Citi recently raised its price target to $180+, and Loop Capital sees potential upside beyond $250. However, both noted rising competition and potential regulatory risks, particularly regarding AI chip exports to China.

What Could Go Wrong?

1. China export bans: Any extension of US restrictions could severely limit Nvidia’s access to global markets.
2. Customer concentration: Nvidia’s top clients (Amazon, Microsoft, Meta, etc.) could shift toward internal chip design over time.
3. Sentiment rotation: Tech valuations are vulnerable if broader macroeconomic conditions deteriorate or if AI hype stalls.

Bottom line: Nvidia remains the crown jewel of the AI boom, but valuations leave little margin for error.

Bitcoin: Parabolic or Paused?

Bitcoin has had an equally thrilling year. In early July 2025, it broke above $112,000, marking a new all-time high, following the success of BlackRock and Fidelity’s spot ETFs and ongoing institutional inflows.

Its correlation with the Nasdaq remains relatively low, but Bitcoin still benefits when risk appetite is strong, making it a barometer for broader tech optimism.

Cooling Off?

Despite these highs, the rally appears to be losing momentum:

• On-chain data shows that over 26,000 BTC were offloaded by institutions in early July, signalling potential distribution.
• Retail participation is picking up again—a common marker of late-stage bull runs.
• Technical charts show resistance around the $114,000–$118,000 level, which has capped price action for weeks.

Some analysts remain bullish, with long-term projections as high as $143,000 if resistance breaks. But others argue the easy gains are now behind us, and a consolidation phase may be underway.

Macro Matters

Bitcoin’s next moves are likely to be shaped by:

• US interest rates: A continued dovish pivot by the Fed could fuel further upside.
• Geopolitical unrest: Bitcoin continues to play the role of “digital gold” during periods of instability.
• ETF flows: Sustained inflows into spot Bitcoin ETFs will be crucial to support any move higher.

Bottom line: Bitcoin’s fundamentals remain supportive, but near-term upside may depend on breaking through key technical ceilings and sustaining institutional momentum.

Is the Tech Rally Fizzling Out?

The question many are asking now is: have we already seen the best of this tech rally?

Nvidia and Bitcoin aren’t alone. Other parts of the tech sector, such as semiconductors, blockchain infrastructure, and even speculative AI SaaS, have shown signs of slowing growth or retracements over the past month.

There is no immediate sign of a crash, but rotation into defensive sectors and more value-oriented assets is slowly picking up among smart money.

What Should Investors Do?

1. Trim winners: Lock in gains where allocations to Nvidia or Bitcoin have grown outsized.
2. Diversify: Consider balancing with assets that offer uncorrelated or defensive exposure, such as gold, private credit, or EIS/SEIS-qualifying funds.
3. Watch earnings: Nvidia’s Q2 earnings (expected late August) will be a key test of sustainability.
4. Monitor liquidity: Bitcoin’s rally depends heavily on institutional flows and macro tailwinds, both of which could shift rapidly.

Both Nvidia and Bitcoin have powered an exhilarating tech rally—one defined by AI breakthroughs, decentralisation narratives, and digital infrastructure optimism. But as we enter the second half of 2025, cracks are beginning to show.

Valuations are stretched, expectations are high, and markets are now demanding proof, not just promise. While this doesn’t spell the end of the rally, it does mean investors need to be more selective, more cautious, and more diversified.

At De Pointe Research, we continue to monitor the rally closely, seeking out asymmetric opportunities in both public and alternative markets.