Elon Musk chimes in after Microsoft and Nvidia gain as much as $192 billion in market value in a day. His reaction could be a red flag to investors.
- Microsoft and Nvidia gained as much as $192 billion in market value between them on Tuesday.
- Elon Musk reacted to the pair's massive increase in market cap by tweeting: "Crazy times."
Elon Musk underlined the astounding scale of Microsoft and Nvidia's combined market-value surge on Tuesday with a two-word tweet: "Crazy times."
While Musk didn't spell out whether he views Microsoft or Nvidia as overvalued, his strong reaction could be a red flag for investors.
What's going on with Microsoft and Nvidia?
Microsoft stock jumped 4% on Tuesday after it unveiled a $30 AI subscription for its Office 365 platform. Meanwhile, Nvidia rose 2% after a Citi analyst raised his price target for the stock and suggested it could surge nearly 30%. Both stocks continue to ride the wave of excitement around artificial intelligence, as investors bet the technology will dramatically boost productivity and supercharge providers' profits.
Combined, the computing titan and microchip maker gained as much as $192 billion in market capitalization during Tuesday's intraday trading. They ended the day with respective increases of $102 billion and $26 billion.
Microsoft shares have soared 50% this year to trade at a record high, which has added around $900 billion to the company's market cap. Nvidia has performed even better — its 225% gain has more than tripled its market cap to almost $1.2 trillion.
Put another way, both companies' market values have increased by more than the entire market cap of Warren Buffett's Berkshire Hathaway ($756 billion) this year.
Could Musk's tweet be a red flag?
Musk's exclamation about Microsoft and Nvidia isn't surprising; he tweeted "Wild T$1mes" after Tesla's market cap crossed $1 trillion in November 2020. However, the Twitter owner and Tesla and SpaceX CEO has warned about overheated and volatile stocks in the past.
"Tesla stock price is too high imo," he tweeted in May 2020, spooking his own shareholders and sending his company's stock downward.
Musk also complained the automaker's stock price was "being set in kind of a manic-depressive way," and called it "a bit of a distraction," on a Tesla earnings call in 2019.
"Warren Buffett's analogy is that being a publicly traded company is like having someone stand at the edge of your home and just randomly yell different prices for your house every day," Musk added. "It's still the same house."
Musk hasn't been complaining recently, perhaps because Tesla's stock price has skyrocketed from below $30 to over $290 since 2019, adjusted for the electric-vehicle maker's two stock splits. The surge has boosted the value of Musk's stake in Tesla; he's now the world's wealthiest person with a $256 billion fortune, according to the Bloomberg Billionaires Index.
It's worth emphasizing that Musk has been firing off short replies such as "wow" and "!" to many tweets in recent weeks, as he seeks to boost engagement on Twitter after buying it last year. "Crazy times" might just be another offhand response, but it could also signal he's taken aback by the magnitude of Big Tech stock moves today.