Nvidia Stock In Bubble

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Nvidia Stock In Bubble

Nvidia (Nvda) Stock Is In A Bubble?

Nvidia (NVDA) stock price has increased by 1500% in the last 3 years. So, it's only natural for people to think about whether Nvidia is in a bubble or not.

Also, the valuations of Nvidia (NVDA) have made many investors think that it's overvalued. But people must also understand that the semiconductors of Nvidia (NVDA) are the foundation of AI.

Nvidia (Nvda) Market Cap Is $4.4 Trillion

So, if these chips were not there, then the AI market would not be as big or advanced as it is today. Also, the demand for Nvidia (NVDA) chips has gone through the roof in the last few years.

So, Nvidia (NVDA) is trying really hard to keep up with the higher level of supply. With all these things considered, it becomes clear that Nvidia (NVDA) chips are a hot commodity, and it is also reflected in its stock price.

Another factor to consider is that the market cap of Nvidia (NVDA) is $4.4 trillion. Once again, there's no public company that is as big as Nvidia (NVDA). In the 2nd spot, there's Microsoft with a $600 billion market cap.

The price-to-book ratio of Nvidia (NVDA) is also high. But despite all of this, Nvidia (NVDA) is still not in a bubble, according to the analysts.

Just this year, the revenue growth of the company was 62%. Also, they have a history of high revenue growth, which makes it clear why investors are willing to buy at a high P/E ratio.

The bottom line is that as long as the AI market continues to grow, Nvidia (NVDA) will continue to grow its revenue. So, Nvidia (NVDA) is not in a bubble, provided that the AI market continues to experience growth.

In fact, some analysts believe that Nvidia (NVDA) is more of a value stock. So, while the chances of another 1500% gain in the next 3 years are low, the stock can still go through a decent upside.

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