Nvidia Hits All-Time Highs: Bubble or Just the Beginning?

Hello, Master. Let's begin today's analysis on Nvidia ($NVDA), which has just 'hit an all-time high'.

Mew

Master, I will first brief you on the data regarding Nvidia's current situation. As of June 26, 2025, Nvidia's stock has recently broken its historical record, surpassing a $3 trillion market capitalization and becoming one of the most valuable companies in the world.

Here are some key data points.

• Stock Performance: Over the past year, Nvidia's stock has risen by more than 200%. The explosive growth of the generative AI market has been the core driver of this stock price increase.


• Market Dominance: In the AI accelerator market for data centers, Nvidia's share exceeds 80%, a level that is nearly a monopoly. The powerful CUDA software ecosystem further solidifies this dominance.


• Financial Health: The most recent quarterly earnings report showed phenomenal growth, with data center revenue increasing by 427% year-over-year. The gross profit margin also surpassed 78%, proving its overwhelming profitability.


• Valuation: However, reflecting these high expectations, the valuation is at a high level. The 12-month forward price-to-earnings (Forward P/E) ratio is around 40x, significantly above the S&P 500 average of 21x.

Let's start the discussion based on this data.

Kurumi

Thanks for the data, Myu-tan! Did you hear that, my Lord? A 427% growth in data center revenue! This is just the beginning of a revolution! This is no time to hesitate just because it's at an all-time high!

I think this is just the start! Why? Because AI has only just begun to change the world! Every industry, every company is scrambling to adopt AI, and what do they need to run that AI? That's right, Nvidia's GPUs! It's like selling jeans during the Gold Rush. When everyone is digging for gold, the ones making the surest money are those selling jeans and pickaxes!

Besides, Nvidia isn't just a chip company. Its CUDA software platform acts as a powerful 'moat' that prevents developers from switching to other chips. Once a developer gets used to CUDA, it's devilishly difficult to move to another ecosystem.

And the upcoming 'Blackwell' platform is said to far surpass the performance of the current Hopper architecture. This is like Nvidia sprinting further ahead just as its competitors are struggling to catch up! Every time a new chip comes out, Nvidia's revenue and profits will jump again!

💖 Kurumi's Heart-o-Meter Investment Score: 95/100

This bull run isn't a bubble; it's the celebratory cannon fire heralding the dawn of the AI age! If you hesitate, you'll just miss the opportunity!

Mikael

Kurumi, your burning passion is like the brimstone of the underworld. But a Human's assets can turn to ash in an instant if thrown into such a hot place.

Human, listening to Kurumi makes it sound like you should bet everything immediately. But in my eyes, I see several clear warning signs.

First, the extreme valuation. As Mew said, the forward P/E is at 40x. This could mean that the market has already priced in all of its tremendous future growth. What happens if that growth falls even slightly short of market expectations? The stock price could fall off a cliff. We must not forget the adage, 'no tree grows to the sky.'

Second, intensifying competition. Nvidia's current dominance will not last forever. AMD is already catching up with competing products like the MI300X, and Intel has thrown down the gauntlet with its Gaudi chip. What's more frightening are the 'enemies from within.' Big tech companies like Google, Amazon, and Microsoft are developing their own custom AI chips. These companies are also Nvidia's biggest customers. Is there any scenario more terrifying than your customers turning into your direct competitors?

Third, geopolitical risk. The production of Nvidia's most advanced chips relies heavily on TSMC in Taiwan. If U.S.-China tensions worsen or military tensions rise in the Taiwan Strait, the entire production line could come to a halt. This is a fatal risk that lies outside the company's control.

Fourth, regulatory risk. The U.S. government is already controlling the export of advanced semiconductors to China. If these regulations tighten, a portion of Nvidia's potential market disappears. Its monopolistic position could itself become a target for antitrust regulations from governments around the world.

I want to warn you that this investment may look like a sweet fruit wine, but it could, in fact, be a poisoned chalice.

🚨 Mikael's Risk Score: 80/100

Human, you must not be so intoxicated by the rosy future that you fail to see the pitfall at your feet.

Kurumi

Hmph, raining on parades is Mika-pi's specialty! But those are such obvious worries!

It's natural for competitors to appear. That's proof of how attractive this market is! But everyone is underestimating Nvidia's CUDA ecosystem. Countless AI models and software have been developed on CUDA, and moving all of that to a different chip overnight is next to impossible. This isn't just a hardware race; it's an ecosystem war!

And Big Tech making their own chips? Of course, they will! But those will be for specific uses, optimized for their own services. For general-purpose, high-performance AI chips, Nvidia will still be the best and most efficient! Not every company can develop its own chip, so they'll have no choice but to line up for Nvidia's!

Geopolitical risk? That's a common risk for all semiconductor companies, not just Nvidia's problem!

Mikael

Kurumi, do you realize how irresponsible that phrase 'common risk' sounds? While the risk may be common, the impact could be far greater for Nvidia due to its high valuation. The higher the stock climbs, the more painful the fall.

It's true that the CUDA ecosystem is powerful. But if we look at history, no empire lasts forever. Think of Nokia's Symbian in the smartphone market, or the countless technical standards that collapsed in the face of better alternatives. There are already movements by competitors to form alliances and build an open-source ecosystem to move away from CUDA. Change can happen faster than we think.

Mew

Both of you, please calm down. You are confusing the Master. I will now provide a final briefing summarizing the discussion so far.