Nvidia's wild stock swings put AI rally stamina in spotlight
What caused Nvidia's stock to swing wildly recently?
Nvidia's stock experienced wild swings due to concerns over the sustainability of its rally and the threat of competition. The company's valuation and durability of demand were key factors contributing to the stock's volatility. Investors are debating whether AI can deliver sufficient returns on investment, and if not, demand may cool down, causing a reckoning for Nvidia's valuation.
What historical event does Kirkbride compare AI investment to?
Kirkbride compares AI investment to the costly build-out of telecommunications networks in the 1990s in anticipation of a rapid internet traffic increase. This scenario ultimately materialized at a much slower pace, leading to heavy spending and overly optimistic projections for companies like Cisco Systems Inc.
How much did Nvidia's revenue increase last fiscal year?
Nvidia's revenue doubled in the last fiscal year, reaching $61 billion. This growth was driven by increased demand for AI accelerator chips, with customers snatching up all the chips the company could produce. As a result, sales are projected to nearly double again in the current period.