From Nasdaq, Inc.:

Investment trends have changed over the past decades, with artificial intelligence (AI) being the hottest new trend. AI utilizes software to complete tasks traditionally done by humans, and is expected to add up to $15.7 trillion to global GDP by 2030. The AI landscape is dominated by Nvidia, whose A100 and H100 GPUs currently account for “at least 90%” of AI-accelerated data-center GPU share.

However, there are several reasons to be cautious about investing in Nvidia. Increasing production of its A100 and H100 chips will likely affect the company’s gross margin, and competition from companies like Advanced Micro Devices and Intel is heating up. Even Nvidia’s biggest customers, such as Meta Platforms and Microsoft, are developing their own AI-accelerated chips, reducing their reliance on Nvidia. Additionally, U.S. regulatory restrictions have put limits on Nvidia’s growth potential, and insider selling has raised concerns about the stock’s valuation.

History has shown that new investment trends often lead to early-stage bubbles, and with Nvidia currently trading at 63X cash flow, it may be overvalued for an industry full of unknowns. Given these factors, it may be prudent to consider other investment options for taking advantage of the AI revolution.



Read more: 7 Reasons to Sell Nvidia, Wall Street’s Hottest Artificial Intelligence (AI) Stock