AI To Go The Route of EVS? Investors Worried Stocks Like Nvidia Will Slow Down Just Like Tesla
The high rise in the stock of NVIDIA Corp. is driving the records of the S&P 500 Index high. But with that, it is raising a new question in the minds of investors. They are thinking of the risks associated with a high-hyped stock, similar to Tesla.
In 2017, the investors of Tesla were on another level. Everyone believed that the EV sector was going to take over the world. But now the shares of Tesla are down by more than 50% as compared to the hype of 2017. This is making the investors, who see the stock as a limitless bet of AI, of NVIDIA think about the rise of stocks. The stocks of NVIDIA have added a value of around 66% this year.
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However, both industries are far different from each other and also run by two different people. But still, the resources are comparing the stocks and the risk of rise between these two. There’s all this potential about the driverless car, the cybertruck, and the stock is getting hit. Why? They are losing market share and they are losing margins. In the tech world that is the kiss of death,” said Sameer Bhasin, principal at Value Point Capital.
According to the resources, around 2020, when the valuation of Tesla was around $1.2 trillion. People were assuming that EV vehicles were going to be very fast-consuming and would dominate the market. But the reality was something else. The EV market has started slowing down and so has the stock of Tesla.
Whereas NVIDIA, a California-based company which designs and supplies GPU for data science and high computing devices has started its journey from a low phase and now has become one of the biggest companies in the world. In the past few years, its sales growth is stayed on power. So it would be too early for the hype to slow down like Tesla.
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“If you really believe in this AI frenzy, you can visualize a future 10 years from now where AI is embedded in a lot of places, and you need these massive systems running chips that can only be delivered by Nvidia,” said Sameer Bhasin. Although, the competitors are keeping an eye on grabbing the market of NVIDIA. Currently, NVIDIA is maintaining its sales ratio from the last few quarters and performing well in the semiconductor industry.
