Investors are flocking to Nvidia, a leading AI chip maker, causing its stock price to skyrocket and surpass Microsoft as the most valuable company in the world. This rise is reminiscent of the dot-com era, when Cisco experienced a similar surge before crashing. The influx of money into AI has raised concerns about overvaluation, as Nvidia’s P/E ratio is well above 100. Some experts see echoes of past bubbles in the current market, but note that transformative technologies like AI can drive lasting change. The history of stock bubbles, from the South Sea Bubble in 1720 to the dot-com boom of 2000, shows that while investors may suffer losses, the innovations associated with these bubbles can lead to long-term societal and economic transformation. Nvidia’s stock price reflects anticipation of another transformative shift driven by AI, similar to the impact of the Internet 25 years ago. Investors are eager to capitalize on this potential, despite potential risks ahead.
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https://ca.finance.yahoo.com/news/nvidia-stunning-rise-offers-flashbacks-131507803.html
Nvidia’s rapid ascent evokes memories of Cisco and the dotcom boom
