Nvidia investors are starting to question if the chipmaker’s recent surge in market capitalization is worth the price. Despite reaching over $3 trillion in market value, the stock has dropped by nearly 7% in recent weeks. Nvidia’s stock price is now close to Apple’s, but trades at a higher multiple compared to its historical averages.
Some are drawing comparisons between Nvidia’s rapid rise and the dot-com bubble of the late 1990s. However, there are key differences, such as Nvidia’s strong financial performance and the support from tech giants like Microsoft, Google, and Amazon. These companies are expected to invest more in Nvidia’s products, unlike the financially unstable customers that hurt Cisco during the dot-com bust.
Analysts are optimistic about Nvidia’s future, with some setting price targets above $160. Retail investors have also been flocking to the stock, with daily trading volumes surging since the company’s latest financial results. However, caution is advised, as the stock may be overvalued at its current level.
Overall, while Nvidia remains a key player in the artificial intelligence market, investors should be mindful of the risks associated with the stock’s current valuation. As the market continues to evolve, it’s important to make informed decisions and not overpay for any potential gains.
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https://www.livemint.com/market/stock-market-news/nvidia-is-no-cisco-but-it-is-getting-expensive/amp-11719051336627.html