Nvidia, the world’s most valuable company with a $4 trillion market cap, is investing heavily in AI. The company has made deals with OpenAI, Intel, and British AI startups. Nvidia has also partnered with Alibaba and invested in over 50 AI startups last year, raising concerns about buying revenue through funding.

Analysts have responded to Nvidia’s investment spree by raising target prices. However, fears of an AI bubble are resurfacing due to high valuations of some startups. Federal Reserve Chair Jerome Powell and Meta Platforms CEO Mark Zuckerberg have expressed concerns about an AI bubble.

Praetorian Capital predicts hyperscalers could spend $400 billion on data centers this year, depreciating at $40 billion annually. Concerns about AI entering a bubble are valid, but listed tech giants have solid balance sheets. The AI infrastructure story is ongoing, with global AI investment expected to reach $4 trillion in the next five years.

Nvidia faces risks in China due to local competition in AI chips but remains strong ex-China. The stock trades at a forward P/E multiple of 42.4x, reflecting strong earnings growth. Despite concerns about exuberance in the AI ecosystem and Nvidia’s challenges in China, staying invested in NVDA stock seems prudent for now.

Read more at Yahoo Finance: Should You Buy NVDA Stock Amid Fears of an AI Bubble?