However, others disagree with this assessment, including JPMorgan CEO Jamie Dimon, who argues that unlike the internet bubble, AI is not just hype. He points out that AI has wide-ranging applications, from cybersecurity to pharmaceutical research. Furthermore, Nvidia is yet to reach the fourth stage of a stock bubble, profit-taking. However, concerns remain about the sustainability of demand for Nvidia's products, especially as its customer base is concentrated among big tech companies, some of which are already shifting towards making their own AI chips.
Key takeaways:
- Some Wall Street analysts are concerned that Nvidia is in a stock market bubble that's about to burst, having already gone through the displacement, boom, and euphoria stages.
- Major tech companies like Microsoft, Meta, Google, Amazon, and Tesla are among Nvidia's biggest customers, buying their chips for AI efforts. However, there are concerns that demand for Nvidia could fall if these companies shift their spending or start making their own AI chips.
- Analysts have compared Nvidia's situation to that of Cisco Systems during the dot-com bubble of the early 2000s, which saw its shares plummet by 80% when the bubble burst.
- While some believe Nvidia is overvalued, others, like JPMorgan CEO Jamie Dimon, disagree. Dimon argues that unlike the internet bubble, AI is not hype and Nvidia is not in a bubble.