Is Nvidia stock, AI a bubble? Citi says 2024 is shaping up to be a repeat of 1999

investing.com:

Only five years ago, Nvidia’s market valuation was sitting around the $100 billion mark. Fast forward to 2024, the chipmaker is the world’s third most valuable company, with a market cap of a staggering $2.3 trillion. Moreover, Nvidia (NASDAQ:NVDA) stock price seems to be on its way towards $1,000.

This represents a twentyfold surge for the Nvidia stock and can largely be attributed to a single factor — the explosion of generative artificial intelligence (AI) technology.

However, this breakneck growth in NVDA and the AI field has prompted investors and analysts to speculate if this represents another market bubble and question the sustainability of high valuations for the chipmaker and other tech behemoths.

While many know it as the maker of graphic processing units (GPUs) used for video gaming and rendering, Nvidia’s products are actually playing an integral part to nearly all of today’s sophisticated technology.

For instance, the company’s chips power the self-driving functionality in Tesla’s EVs, and are also a fundamental component of the cloud computing services used by nearly all major tech corporations.

These services are crucial to numerous aspects of our daily online activities, from streaming entertainment on platforms like Netflix (NASDAQ:NFLX) to utilizing various office and productivity applications.

But Nvidia’s breakneck growth over the past year has been driven by its role in the AI universe.

The tech giant witnessed unprecedented demand for its highly sophisticated chips as the likes of ChatGPT and other generative AI products began to emerge.

This is mainly due to the high computational demands of GenAI platforms, which rely on powerful GPUs for their operations. Nvidia, controlling the GPU market with