Let's talk about NVIDIA !

What are the giants saying!

Dan Ives: "We're just getting started with AI stocks. Nvidia hitting $2 trillion is a sign of the huge potential ahead."

Marc Rowan: "Hold on, everyone. We're seeing valuations that are even crazier than the dotcom bubble. It's time to be cautious."

Torsten Slok: "Looking at the numbers, today's top S&P 500 companies are way overvalued compared to the tech bubble era. We're in a fragile economic state, and the market might be too optimistic."

Jensen Huang (Nvidia CEO): "Our AI chips are in such demand, we're shaping the future. AI will do the coding soon; we're making technology accessible to everyone."

Satya Nadella & Elon Musk: "We're all in on AI too, but getting enough Nvidia chips is a challenge. We're exploring our own solutions."

Cathie Wood: "Nvidia's success is undeniable, but the hype might be too much. We're adjusting our investments because the competition is heating up, and it could pressure Nvidia's margins."

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Nvidia added $277 billion in market cap last Thursday which is more than the market cap of Bank of America, Coca Cola or even Netflix. Debating over such hefty rise in valuation's in a single day is debatable and secondary. Before that we should know that it's data centre chips that powers major advancements in generative AI such as Sora are in high demand. They say that when there's a gold rush don't dig for gold but sell shovels and this is what Nvidia is doing. When everyone is trying to win the race of gen AI, Nvidia is providing them with the infrastructure or as you may call it a ticket to participate in the race.

But there lies a hindrance with the production and distribution of the chips. Elon musk has admitted that he may not have even invested in his high-risk Dojo supercomputer project had he been able to get his hands on?enough Nvidia chips.

Nvidia has become a matter of national security, with the U.S.?prohibiting the export?of its high-performance chips to China. With this, questions arise like will China invest it's resources in building home-grown rival of Nvidia?

Back to talking about the valuations in AI space, some giants are betting big whereas others are cutting down their positions. ARK Invest founder Cathie Wood, recently lowered her exposure to the AI semiconductor space, selling $4.5 million worth of shares in Nvidia. On Friday she also trimmed her holding in foundry Taiwan Semiconductor ManufacturingCo., which produces the Nvidia chips, for the first time in over two years.

In my opinion a bubble will form that will eventually burst as it is an inherent characteristic of the financial infrastructure but now is too early to consider it as a bubble. Nvidia can again create records with significant jump in valuation's as DEMAND EXISTS. In fact before the bubble bursts, there will be several such opportunities to pocket hefty returns in the AI boom. Gen AI is a big thing but still not EVERYTHING. Technologies are emerging and architects of these technology will need a shovel to dig for gold.