- Nvidia’s stock is vastly overvalued
- Buying it now poses significant risk
- Investors should consider other chipmakers, with Qualcomm being the better option based on recent analysis by InvestingPro
The semiconductor industry is in the spotlight because of the high demand for artificial intelligence (AI) technology. Nvidia’s first-quarter results exceeded market expectations, further driving the sector’s hype. This impressive performance triggered a significant stock rally of nearly 25%, but Nvidia’s stock has already seen a 160% gain since the beginning of 2023. As a result, buying it now may be too risky, and investors should look at other chipmakers instead.
The InvestingPro tool compared the leading chip stocks listed in the US, including Advanced Micro Devices, Intel, Taiwan Semiconductor, Micron, NXP Semiconductors, and Qualcomm. Based on the data, Nvidia’s stock is currently overvalued, which makes Qualcomm the only undervalued option with significant upside potential according to InvestingPro’s Fair Value and analysts. Additionally, Qualcomm’s financial health ratings are solid, and it has consistently increased its dividend for the past 20 years.
Overall, Qualcomm is a better option to consider buying than Nvidia, which has become too expensive. However, investing in any asset always involves risk and requires careful evaluation by the investor.
Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counseling, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remain with the investor.
