At present, semiconductor companies still dominate the hot discussion list, with NVIDIA, TSMC, and AMD at the forefront. NVIDIA experienced a significant drop of 5.5% last Friday, causing market concerns.
NVIDIA influences the overall trend of the U.S. stock market, so it is crucial to understand whether there is a bubble in NVIDIA.
Although NVIDIA surged by 239% in 2023 and continued to rise by 76% in 2024, due to its rapid profit growth, its valuation has actually decreased. Currently, the price-to-earnings ratio for the past 12 months is 73 times, which is cheaper than most of 2021:
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Is NVIDIA really expensive? The general view on Wall Street: Not expensive
Regarding whether there is a bubble in NVIDIA's current valuation, the general conclusion on Wall Street is that it is not expensive! According to the latest data from TipRanks, there are a total of 40 analysts on Wall Street who have rated NVIDIA, with a staggering 95% recommending a buy rating and 0 analysts recommending a sell rating.
In addition, the latest average target price for NVIDIA on Wall Street is $890 per share, with the highest target price reaching an astonishing $1200.
The Chief Investment Officer of Main Street stated, &#34;Some investors have been hesitant to buy NVIDIA because they think the stock price is already too high, which is a big mistake. Every time NVIDIA announces its performance, the price-to-earnings ratio decreases.&#34;
Carson Group strategist believes that the current valuation growth of U.S. tech stocks is being driven by actual profits, which is different from the dot-com bubble at the end of the 1990s and early 2000s. Since the beginning of 2022, NVIDIA's profits have soared by over 250%, while the company's valuation multiple has only expanded by a little over double.
Goldman Sachs also stated that if there is a bubble now, it is one of the &#34;lamest&#34; bubbles they have ever seen. &#34;Although some parts of the market show a speculative spirit, at least in terms of the valuation of large-cap stocks, we are still far from the bubble territory. Currently, the P/E ratio of the Nasdaq is 35 times, while during the tech bubble of the late 1990s, it reached 90 times!&#34;
Even the analyst who understands Apple the most, Ming-Chi Kuo, also supports NVIDIA, stating that if Apple fails to launch AI services that exceed market expectations this year, NVIDIA's market value is likely to surpass Apple's. Currently, the gap between the two market values is narrowing further, with only over $600 billion difference.
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Data source: apewisdom, the most discussed stocks in the past 24 hours
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Due to NVIDIA's rapid profit growth, its valuation has actually decreased. Currently, the 12-month price-to-earnings ratio is 73 times, lower than most of 2021.

Hot discussion on WallStreetBets: As NVIDIA's stock price rises, its valuation actually decreases.