PayPal co-founder Peter Thiel has sounded a warning to investors, suggesting that buying Nvidia stocks now may not be a good enough choice.
Indicating that Nvidia stock may no longer be a good bargain, Peter Thiel also acknowledged the AI chipmaker’s mega performance at Wall Street.
“Maybe a year ago or two years ago, Nvidia would have been a good buy,” Thiel said speaking at the All-in Summit in September 2024, according to a recent report by Bezinga.
“Now everyone knows they’re making too much money and everyone’s trying to copy them,” he added.
Comparing the rise of the Jensen Huang-led company to the “dotcom” bubble, Thiel noted that the current climate feels “uncomfortably close to 1999.”
Peter Thiel names AI race winner
PayPal co-founder and venture capitalist Pete Theil at the AI summit refused to crown Sam Atlman, Mark Zuckerberg and Elon Musk as the winners of the AI race.
“It’s Nvidia, it’s the hardware, the chips layer,” he said, adding that they are “making all the money while everybody else is collectively losing money.”
“Whoever I talk to last … I find very convincing in the moment,” Thiel joked.
Nvidia shares slip
Nvidia’s shares on Thursday were down about 1.1 per cent as questions around the Sino-US trade war clouded a better-than-expected revenue forecast from the chip designer, released after Wednesday’s market close.
Nvidia’s outlook was above Wall Street expectations but disappointed some investors accustomed to blowout results.
The drop was also driven by a $4 billion decrease in sales of H20 chips-specialised processors the company designed for the Chinese market, according to the earnings report.
The California-based firm posted profit of $26.4 billion on record revenue of $46.7 billion in the recently ended quarter, driven by intense demand for chips from major tech companies powering AI datacenter computing.
The chipmaker expects revenue of $54 billion, plus or minus 2 per cent, in the third quarter, compared with analysts’ average estimate of $53.14 billion, according to data compiled by LSEG.
Nvidia’s high-end GPUs remain in hot demand from tech giants building data centers for artificial intelligence applications. However, investors are questioning whether the massive AI investments are sustainable.
