Nvidia's Valuation: A Looming Bubble?
2025-01-26
A former hedge fund analyst and current AI developer expresses concerns about Nvidia's stock valuation. While AI is booming and Nvidia enjoys a GPU monopoly, its high valuation faces multiple threats: a new "inference compute" scaling law suggests lower-than-expected compute demand; innovative chip architectures from Cerebras and Groq circumvent Nvidia's interconnect advantage; major tech companies are developing custom silicon, eroding Nvidia's market share; new software frameworks reduce CUDA dependency; and DeepSeek's efficient model training drastically cuts compute costs. These factors combined could lead to lower revenue growth and margins for Nvidia, making its current high valuation unsustainable.
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