We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Welcome to Episode #407 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, she went solo to take another look at NVIDIA (NVDA - Free Report) . Since she last covered NVIDIA on the podcast in the spring of 2024, the stock has continued to rally and hit another round of new all-time highs.
Is this just a bull rally or is the stock now in a bubble?
Criteria of a Bubble
An asset bubble is not defined just the price of that asset rising and/or hitting new highs. If it were, we’d have bubbles every day. There are other criteria that need to be present for it to be considered a bubble. Those can include:
1. Speculation
2. Expansion of credit
3. Fraud
4. The belief, by investors, that the price of that asset will never fall again
Tracey might also add the “barbecue test.” Is she being asked about a certain stock at summer barbeques by people who have never bought stocks before?
NVIDIA’s Fundamentals: Bull or Bubble?
NVIDIA’s fundamentals may be looking stretched but the company is still executing. Analysts are looking for earnings growth of 106% in Fiscal 2025 and another 25.7% in Fiscal 2026. And NVIDIA is still a Zacks Rank #1 (Strong Buy) as analysts have been raising estimates over the last 30 days.
While NVIDIA’s forward P/E is 47.8, which obviously isn’t cheap, it has a PEG ratio of just 1.3. A PEG ratio under 1.0 indicates a company has both growth and value. A PEG ratio of 1.3 is still attractive.
Shares of NVIDIA have soared 154% year-to-date.
So, is NVIDIA in a bubble, or not?
Find out the answer in this week’s video podcast.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is NVIDIA in a Bubble?
Welcome to Episode #407 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, she went solo to take another look at NVIDIA (NVDA - Free Report) . Since she last covered NVIDIA on the podcast in the spring of 2024, the stock has continued to rally and hit another round of new all-time highs.
Is this just a bull rally or is the stock now in a bubble?
Criteria of a Bubble
An asset bubble is not defined just the price of that asset rising and/or hitting new highs. If it were, we’d have bubbles every day. There are other criteria that need to be present for it to be considered a bubble. Those can include:
1. Speculation
2. Expansion of credit
3. Fraud
4. The belief, by investors, that the price of that asset will never fall again
Tracey might also add the “barbecue test.” Is she being asked about a certain stock at summer barbeques by people who have never bought stocks before?
NVIDIA’s Fundamentals: Bull or Bubble?
NVIDIA’s fundamentals may be looking stretched but the company is still executing. Analysts are looking for earnings growth of 106% in Fiscal 2025 and another 25.7% in Fiscal 2026. And NVIDIA is still a Zacks Rank #1 (Strong Buy) as analysts have been raising estimates over the last 30 days.
While NVIDIA’s forward P/E is 47.8, which obviously isn’t cheap, it has a PEG ratio of just 1.3. A PEG ratio under 1.0 indicates a company has both growth and value. A PEG ratio of 1.3 is still attractive.
Shares of NVIDIA have soared 154% year-to-date.
So, is NVIDIA in a bubble, or not?
Find out the answer in this week’s video podcast.