Investors are flocking to AI chip maker Nvidia as it surpasses Microsoft to become the most valuable company in the world and climbs to No. 74 on the Fortune 500 list. The Wall Street Journal compares this rise to the dot-com boom of the early 2000s, noting the concerns about the sustainability of the current AI boom. Nvidia’s high P/E multiple suggests that the stock may be overvalued, and some experts warn of a potential stock market bubble akin to past crashes, like the dot-com bust or the financial crisis of 2008. Professor William Goetzmann of the Yale School of Management points out that past bubbles were often driven by innovative companies that changed the economy, and suggests that Nvidia’s rise may reflect anticipation of transformative AI technology. Investors are optimistic about Nvidia’s potential, but the market may face challenges as the company works to deliver impressive earnings reports that justify its high valuation.
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