Key insights
- The article discusses Nvidia's all-time high stock price and valuation amid strong AI demand and potential easing of China trade restrictions. It highlights both bullish factors (strong growth, market leadership) and bearish concerns (competition, export risks, high valuation). The author questions whether current growth rates are sustainable and if the stock's upside is limited, weighing the potential for continued outperformance against the risk of a pullback.
So Jensen Huang was part of Trump's China delegation this week, and NVDA just hit a new record at $235. Almost 50% up from the October lows around $158.
I've been trying to wrap my head around the valuation here. The AI demand story is intact — hyperscalers are still throwing money at data centers like there's no tomorrow. NVDA is still the default GPU supplier. The China trade talks could open up more semi exports too, which would be a direct tailwind.
But at the same time — the stock is at its highest point ever. Competition is getting real. AMD is catching up on specs, the hyperscalers are all building their own silicon, and Cerebras just IPO'd with a bang (+68% on day one). Not to mention export restrictions to China are still a wildcard regardless of what Trump and Xi discuss.
I look at the revenue growth and it's obviously stellar. But how much of that is already in the price? Can NVDA really keep growing at these rates when the comps get harder every quarter?
Maybe I'm being too cautious and this is one of those situations where the best companies keep surprising to the upside. Or maybe the easy money has been made.
What's your process for valuing a stock like NVDA that's both high-growth and at ATHs? Do you wait for a pullback or just accept that great companies rarely look cheap?