Artificial or intelligent?
NVIDIA investors are probably making the same mistake Cisco investors did in 1999. Here’s why.
NVIDIA, the computer chip maker, is now the most valuable public company in the world. This week, the firm's market capitalisation blew past $3.3trn to overtake Microsoft. The company's fans treat the founder and boss, Jensen Huang, like a rockstar. He's been hosting parties with the interns, showing off his tattoos, and signing women's breasts.
But some pundits, including this publication, are sceptical of the firm's value. The current NVIDIA spectacle is reminiscent of Cisco stock's boom and bust during the dotcom bubble. In March 2000, Cisco overtook Microsoft for the top spot, just like NVIDIA has done now. So, is NVIDIA a bubble, as Cisco was? Probably. Like Cisco before, NVIDIA has gone through the three stages of bubble building. And the rest of the story will likely play out similarly.