Nvidia: A Repeat Performance?

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Investor looking at a stock chart

So, everyone’s suddenly noticing Nvidia’s stock isn’t priced like it’s made of solid gold? It’s about time. Honestly, the breathless enthusiasm around this company…it’s exhausting. They make graphics cards. Good ones, admittedly. But the market acts like they’ve solved world hunger. Now, the price-to-earnings ratio is…reasonable. Relatively. It was lower a year ago, and then, predictably, the whole thing went a little crazy. And people are surprised? It’s a pattern, you know? A perfectly predictable, irritating pattern.

The thing is, nothing fundamentally changed. They’re still making these…chips. And people still want them. The whole AI boom? It’s just another bubble, isn’t it? A slightly more sophisticated bubble, maybe, but a bubble nonetheless. Yet, the stock jumped. It always jumps. And then, inevitably, someone gets hurt. Not me, of course. I’m just observing. With a profound sense of…discomfort.

A Brief History of Overreactions

You remember April 2023? Trump and his tariffs. A completely manufactured crisis, if you ask me. Designed to rattle people. And it worked. The market panicked, and suddenly, Nvidia was down. Like they were personally responsible for international trade policy. It was absurd. Then, he backed off a little, or pretended to, and everyone cheered. The stock went up. Because…logic? No. Because people are easily distracted. It’s a simple formula, really.

The stock dipped to around 24 times earnings. Then, as quickly as you can say “irrational exuberance,” it was back up to 40, an 81% gain. Eighty-one percent! For what? For surviving a news cycle? It’s…offensive, frankly. And now, we’re seeing a little pullback, a 10% dip from the recent highs. A perfectly normal correction, you’d think. But no. Now everyone’s wringing their hands again. It’s exhausting.

Nvidia Stock Chart

It’s trading at 25 times earnings now. Just slightly more expensive than during the tariff debacle. And people think this is a buying opportunity? Honestly, it’s just… predictable. The AI market is still growing, sure. But growth isn’t a guarantee. It’s just a…potential. And potential is vastly overrated.

The GPU Duopoly, and My Discomfort with It

Nvidia makes these graphics processing units. GPUs. Fancy chips. Everyone wants them for their AI projects. Fine. But let’s not pretend they’re the only game in town. There’s competition. AMD. Intel. They’re all making chips. But Nvidia gets all the attention. It’s like they’ve hired a public relations firm specializing in hype. And it works. The hyperscalers are spending money. Record amounts, apparently. More capital expenditure. More data centers. It’s a vicious cycle of spending and…what, exactly? Progress? Or just more noise?

Management predicts data center spending will reach $3 to $4 trillion annually by 2030. Trillions! It’s an astronomical number. And they think Nvidia will benefit? Of course, they do. They have a vested interest in saying that. Wall Street analysts expect 52% revenue growth for fiscal 2027. A slight slowdown, they say. As if a 52% growth rate isn’t already absurdly high. And they think they can accurately predict the future? Please.

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Nvidia is still the top way to play the AI spending spree. Because they’re making money right now. That’s it. That’s the entire argument. Generative AI might be a game-changer. Or it might be a fad. Who knows? But the hyperscalers are buying Nvidia equipment. And that’s enough for everyone to lose their minds. The stock might not double in 2026. But it will by 2027. It’s a safe bet. All it takes is a return to its “normal” valuation range. Normal. What even is normal anymore?

It’s just… frustrating. This whole thing. The hype. The speculation. The irrational exuberance. It’s exhausting. And frankly, I need a nap.

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2026-02-08 02:03