Nvidia’s stock market surge, although spectacular, is worrying. The graphics chip manufacturer has overtaken giants like Amazon or Alphabet, and is now third in American tech valuations. Some economists, including economist Jeremy Siegel, see these as warning signs of a sudden market downturn.
A spectacular flight that questions
Nvidia’s stock market journey is almost like a fairy tale. In just two years, the stock has multiplied by more than 5. The company owes this stunning success to its technological leadership in two explosive niches: graphics chips and artificial intelligence.
Thanks to the global shortage of semiconductors, Nvidia has established itself as a key player in these booming markets. Its latest quarterly results reflect this breakneck growth, with sales up 61% and net profits more than doubling. Enough to excite investors, who are flocking en masse to this promising technological value.
With a market capitalization approaching $2,000 billion, Nvidia now weighs more heavily on the stock market than giants like Facebook, Tesla or Berkshire Hathaway.
But this dazzling stock market escalation sows doubt. In a recent commentthe famous economist Jeremy Siegel sounded the alarm: despite robust fundamentals, Nvidia could be the next victim of a severe speculative backlash.
A risk of a sudden correction
Although recognizing the character “ special » of Nvidia and the company’s long-term growth potential, the economist warns of a risk of a brutal correction.
“ It is impossible to say when the speculative frenzy will end. And when extreme valuations normalize, the decline is likely to be sudden and violent “, he warns.
For Jeremy Siegel, “ the warning signs of a financial bubble are already present “. Nvidia’s valuation indeed seems disconnected from its real economic performance. The chip manufacturer alone weighs almost as much on the stock market as all the large French companies in the CAC 40!
However, Siegel believes that a stock market crash is not imminent. “ Nvidia’s profit growth remains solid, which partly justifies current valuation levels, even if they seem dizzying », he tempers.
However, it is difficult to predict whether the speculative frenzy around Nvidia will continue or whether the stock will plunge again, like many technology stocks during the explosion of the Internet bubble in 2000. To be closely monitored…
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