Is Nvidia and the top 10 short opportunities?

  • Nvidia’s stock surge raises worries about a possible bubble in AI-related stocks. Actions like Cathie Wood’s reduction in exposure to Nvidia highlight these concerns.
  • While some, like Torsten Sløk, warn of overvaluation in the top 10 S&P 500 companies, others, like Jamie Dimon, express optimism about AI’s potential. This divergence reflects ongoing debates about market valuation and AI’s future.

Nvidia’s stock price surge has triggered discussions of a potential “bubble” in AI stocks.  

Cathie Wood, CEO of Ark Invest, has recently expressed her concern and reduced Ark’s exposure to Nvidia, citing the possibility of overly optimistic expectations, prompting her to sell a modest $4.5 million worth of Nvidia shares. So perhaps she is not overly concerned about a bubble bursting.  

But it’s not just Nvidia that has some analysts worried. Torsten Sløk, chief economist at Rowan’s wealth management, pointed out that the top 10 companies in the S&P 500 are currently more overvalued than the top 10 during the mid-1990s tech bubble.  

Jeremy Grantham echoed concerns about overvaluation, warning of an impending burst of the AI bubble. But Grantham is a permanent wall street doomsdayer, so take this warning with some skepticism.

In contrast, Jamie Dimon, CEO of JPMorgan Chase, expressed optimism about artificial intelligence, emphasizing its tangible applications in various sectors such as cybersecurity and pharmaceutical research. Dimon stressed that unlike the hype surrounding the internet bubble, AI’s potential is genuine and substantial.  

Maybe this means that similarly inflated stocks like CrowdStrike (cybersecurity) and Eli Lilly (pharmaceutical) can live up to the potential that their high stock prices are indicating? Or maybe there are additional shorting opportunities with these two stocks that sit outside the top 10? 

Most Traded

Trading Opportunities

BofA sees Aussie dollar outperforming

RBA decision: Will the Aussie Dollar break out?

ECB just cut… Is it BOE’s turn next week?

Japan rate decision Friday: A deeper look

Limited offer:

Get Free

The TraderKeys keyboard can take your gold trading to the next level, with preprogrammed hot keys enabling you easily execute and modify trades.

Join Now