I would say Nvidia is a buy, if.... you are a thrill seeker!
First, I own NVDA, but I own it in the low teens. There isn't a snowballs chance in hell that I would buy it at the current market valuation!
Second, going out on the edge to buy a high flying stock always sounds like a great idea until it isn't. Most of the time, buying high flyers looks like a numb skull move in hind sight. But... to each their own. I personally like to sleep soundly at night. Night sweats are not my thing.
Third, tech cycles are quickening with each passing year. The competition is getting tougher and tougher. There is ALWAYS someone on your heals! If anyone remembers Secretariat in the Belmont when he won the Triple Crown, he was way, way far ahead at the end. In real life (and tech), that doesn't happen much. Maybe NVDA continues to lead for a long time and it is the tech industry’s equivalent to Secretariat. But even if it does, the earnings have to grow at an unbelievable rate given its P/E.
Finally, as much as I like artificial intelligence (AI), I think the crowd is getting their "skis out ahead of themselves". Barron's cover this week was on AI. Everyone has a woody for AI now. That is when bad things happen. Sure AI has advanced, but it still has a long way to go to really be true artificial intelligence. I don’t see computers taking over in the near future.
Overextended excitement has always occurred in stocks. It always looks like a sure winner at the time, but it usually looks like a disaster in the making viewed from a historical perspective.
So knock yourself out and jump in the fray. Is Nvidia the next Secretariat of the tech world? How many horses have raced in the triple crown races, how many triple crown winners have there been and has a horse ever won the Belmont anywhere near Secretariat's lead? Chances look pretty damn small, but it's your money (or OPM)! Have at it!
