Nvidia Briefly Becomes World's 2nd-Most Valued Firm
Nvidia Briefly Becomes World's 2nd-Most Valued Firm
The Facts
US AI chip-maker NVidia's market value rose 5% on Wednesday to $3.01T, surpassing Apple to make it the world's second-most valuable company.
US AI chip-maker Nvidia's market value rose 5% on Wednesday to $3.01T, surpassing Apple's to make it the world's second-most valuable company.
The Spin
Nvidia's meteoric rise exemplifies the volatility in predicting new tech markets. While uncertainties remain over future chip demands and competitive pressures from giants like Microsoft and Amazon, Nvidia's strong developer tools enhance its position. Even though Wall Street predicts a revenue growth slowdown, Nvidia's key role in AI remains unmatched.
At such high valuations, a fall in Nvidia's share price is both inevitable and imminent. At the very least, it will not be able to sustain such a rockstar performance for too long. As Nvidia is currently trading at almost 90 times its earnings, investors will serve themselves well by applying caution and keeping in mind that markets are cyclical.