Is Nvidia in a bubble about to burst? Some Wall Street analysts are worried.
There is Five stages of stock market bubbles, and Nvidia appears to have blown away the first three: Replacement, Boom, and Euphoria.In other words, Nvidia's AI chip innovations caught the attention of investors, the stock price began to rise, and now Its stock price is soaring. That's because technology companies are in a hurry. Buy Nvidia chips Support your AI efforts. Microsoft, Meta, Google, Amazon, and Tesla are some of Nvidia's biggest customers.
Some analysts say Nvidia is similar to Cisco Systems during the dot-com bubble of the early 2000s. Just as Nvidia is important to AI infrastructure, Cisco's networking hardware was also important in the early days of the Internet.when the bubble has burst As funding for early internet startups dried up, Cisco's stock price plummeted 80%.
Wall Street is worried that will happen to NVIDIA as well. In this case, AI can be compared to the early days of the Internet.
According to some analysts, today's risks may be even higher, the AI bubble crash will be steeper, and the collapse will be more pronounced.. Torsten Slok, Chief Economist at Apollo Global Management, said: told Quartz last week The top 10 companies in the S&P 500 today are more overvalued than the top 10 during the tech bubble of the mid-1990s.
But other Wall Street heavyweights disagree. JPMorgan CEO Jamie Dimon told CNBC. NVIDIA recently said it's not a bubble, adding that the main difference from the dot-com era is that the internet bubble was all hype, but AI is not. Dimon's reasoning: AI can handle “a huge amount of things” in areas like cybersecurity and pharmaceutical research.
It is also true that Nvidia is far from taking profits, which is the fourth stage of the stock bubble. so far, 1% only According to the Wall Street Journal, some of the listed stocks of major semiconductor manufacturers are being sold short.
One of the major concerns is that demand for Nvidia will ultimately decrease because of who Nvidia's customers are. Currently, Nvidia's buying base is concentrated among large technology companies. For example, if Microsoft shifts spending to other chipmakers or focuses on manufacturing its own AI chips, it won't need Nvidia anymore.There seems to be a shift Already in the works.
