A counterintuitive piece of data, a counterattack from the traditional economy

Seeing two pieces of news, when put together, can better explain the deep underlying logic behind the current market situation.

First, according to statistics from the Financial Times, Walmart's market capitalization has also exceeded $1 trillion, becoming the world's twelfth-largest listed company.

More importantly, Walmart's stock price performance in recent years has actually surpassed Amazon's, which many people probably didn't expect. Because Walmart is still a relatively traditional offline retailer. Although it has been undergoing transformation through AI and online methods in recent years, it remains a business fundamentally based on offline chain stores. Amazon, on the other hand, is a leader in the e-commerce industry, largely the opposite of Walmart, and has been making large-scale investments and applications in AI in the past two years.

The other news is a report from Cailian Press. Recently, with the pullback in U.S. tech stocks, the wealth of the Walmart family has surpassed that of Jensen Huang. This actually connects with the news above. Both Amazon and Nvidia represent the current emerging tech growth stocks. While Walmart's business seems simple, its moat remains deep because it has taken the offline business to the extreme in terms of chain operations and efficiency.

Artificial intelligence currently enhances efficiency and productivity invisibly, somewhat resembling "virtual assets." However, the current development of AI and the operation of society still require some "physical assets." These "physical assets" are reflected in traditional physical items like land, electricity, and resources, which are precisely the strengths of the traditional economy represented by Walmart.

Therefore, we can also see that Nvidia's stock performance has been mediocre this year. It's not because it's not excellent, but because its current valuation already reflects a lot of optimistic expectations for AI development. Some traditional economy and physical assets that were relatively overlooked before are now being revalued for their fundamental role in the development of AI.

This shift from "virtual to real" is also reflected in the "paradigm shift" in this year's global stock market trends.

(Not for investment purposes)

$Walmart(WMT.US)  $NVIDIA(NVDA.US)