Nvidia Corp.\u0027s outsized jump has prompted an unusually skeptical response from Cathie Wood, manager of the ARK Innovation ETF. Read on.
Nvidia was co-founded in 1993 by Jensen Huang, who still runs the company. It proved more successful than its peers at developing chips that turn computer code into the realistic images that computer gamers love, and rode out a wave of consolidation that saw its rivals acquired, bankrupted or merged into larger companies.
We basically feel that Nvidia’s stock is in bubble territory, regardless of the future potential growthHuang unveiled a series of new AI products on Monday at the Computex trade show in Taiwan. The wide-ranging lineup included a new robotics design, gaming capabilities, advertising services and a networking technology. Perhaps most central to his ambitions, Huang took the wraps off an AI supercomputer platform called DGX GH200 that will help tech companies create successors to ChatGPT.
The question is, how much are the shares pricing in that potential at the current level. Or overpricing it.Article content “We basically feel that Nvidia’s stock is in bubble territory, regardless of the future potential growth,” independent analyst William Keating said in a note on Smartkarma over the weekend. “In other words, we think the train has left the station and we see little point in chasing it down the tunnel at this stage.
Valued in terms of how much cash the company actually generates, Nvidia is by far the most expensive of its peers in the SOX. It’s trading at more than 140 times cash flow, more than double the values for its peers Advanced Micro Devices Inc. and Monolithic Power Systems Inc.
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