The prominent head of an investment firm has issued a sobering warning against a tech stock that has surged by 232 per cent so far this year.
US computer chip-maker Nvidia (pronounced en-vid-eya) has had an unprecedented time on Wall Street in the past few months, with the business posting a record revenue of $21 billion ($AUD) for the latest quarter.
Nvidia’s CEO and founder Jensen Huang became $6.5 billion richer over a single night in late August off the back of the news and the company’s current market cap is $1.8 trillion.
That growth was driven by the surge of interest in artificial intelligence and the expected demand for its computer chips that process it.
But one expert thinks this won’t last and believes the Nvidia ‘bubble’ will soon burst in an explosive fashion.
Robert Arnott, US investor and chairman of Research Affiliates, has watered down expectations of Nvidia’s future prospects.
Nvidia is “a textbook story of a Big Market Delusion” Mr Arnott wrote in a scathing note.