Vildana Hajric | Yahoo Finana | Sep 5th, 2023
Category: Financial News
For years now, stock traders have been getting so rich betting big companies will get even bigger that they’ve forgotten what a bubble looks like. They’re going to find out thanks to Nvidia Corp.
So says Rob Arnott, renowned for his warnings on the dangers of bloated megacaps — and the designer of passive products for muting their supposed threat. Up 228% in 2023, Nvidia may be riding a revolution in computer science, but the stock is “a textbook story of a Big Market Delusion,” wrote the founder of Research Affiliates LLC.
“Overconfident markets paradoxically transform brilliant future business prospects into even more brilliant current stock price levels,” Arnott wrote in a new research note, citing shares trading at around 110 times earnings. “Nvidia is today’s exemplar of that genre: a great company priced beyond perfection.”