Nvidia Underperformance Seen as Temporary 'Speed Bump' by Tech Strategist
Tech strategist Dan Ives downplayed concerns about Nvidia's recent underperformance, calling it a 'speed bump' rather than anything more. In an interview with CNBC, Ives attributed Nvidia's decline to the market's focus on memory stocks, which he referred to as the 'shiny new toy' effect.
Ives highlighted a disconnect between the AI trade and companies that are actually driving the AI revolution, such as Nvidia and hyperscalers. He noted that these companies are currently in the 'penalty box,' despite being at the forefront of the AI movement.
Nvidia's forward price-to-earnings ratio is around 21.2, according to data from Koyfin, after falling to 19.6 last week and reaching levels seen in January 2019. Ives also pointed out that chip demand far outstrips supply, with a demand-to-supply ratio of 15-to-1.
Ives emphasized the significance of Nvidia's role in the AI revolution, stating 'there's one chip in the world fueling the AI revolution', a reference to Jensen's work at Nvidia. He also noted that Apple's lawsuit against OpenAI is a sign that Silicon Valley is taking AI seriously and defending its turf.