Marketplace Article on Nvidia
I am quoted in Marketplace:
Another reason Nvidia’s share price may have skyrocketed in recent months is because the success of the stock itself is attracting additional investment, Kass said.
Kass explained individuals and institutions may be jumping on the train because they see it leaving the station. Or, in other words: FOMO, he said.
Kass said he doesn’t see similarities between Nvidia’s rising stock and the dot-com bubble in the early 2000s, when many online startups tanked after their share prices reached unrealistic levels thanks to an influx of cash from venture capital firms that were overly optimistic about their potential.
Kass said some of these companies not only failed to make a profit, but weren’t even able to pull in any revenue either, unlike Nvidia, which is backed by real earnings.
He does think there could be a correction or a point where Nvidia stock will be perceived as overvalued. He explained the larger your company, the more difficult it is to sustain your rate of growth. Once that growth rate comes down, there could be a sharp sell-off.
But Kass said he doesn’t think there will be a sustained and/or a steep downturn for the company.
