Is NVIDIA Stock Too Expensive? Some Experts Say No, Here's Why

NVIDIA's stock has seen a remarkable rise, pushing the company's total value to staggering heights, potentially even heading towards $4 trillion. For many, such a high price tag might automatically signal that the stock is simply too expensive to buy now. However, some financial watchers argue that despite the high stock price, NVIDIA might still be a reasonable investment. Their reasoning centers on the company's explosive growth, particularly in its earnings or profits. While the stock price has climbed dramatically, the amount of money NVIDIA is making has grown even faster. The key driver behind this growth is NVIDIA's dominant position in the market for chips essential for Artificial Intelligence (AI). The demand for AI technology is booming, and NVIDIA's chips are currently the go-to solution. This strong market hold and rapid increase in profits make the stock's price look less daunting when compared to the company's actual performance. Essentially, the argument is that NVIDIA's current price is justified by its powerful role in a rapidly expanding market and its impressive ability to turn that into significant earnings growth. Looking ahead, the continued demand for AI suggests this trend could continue, supporting the view that the stock, while high, isn't necessarily overpriced.