What goes up must come down — or, in NVIDIA’sNVDA

case, receive a rating downgrade. After a brief stint as the world’s most valuable company, the AI chip kingpin has tumbled 5% from its June peak. Amidst the correction, New Street analysts have downgraded the stock, and more experts are starting to sing a similar tune.

• In a rare downgrade, New Street analysts believeNVDA
  is “getting fully valued,” — which is probable given thatNVDA
  is the S&P 500’s most expensive stock in terms of price to forecasted revenue.
• After soaring over 3000% in five years,NVDA
  has bloated above 6% of the S&P 500 portfolio — a collapse could drag the broader market with it.

From monopoly to multiplayer: Likened to a “gold-plated Ferrari,” NVIDIA chips aren’t cheap — some of its flagship Blackwell GPUs reach $40K. However, more tech companies like Google, Microsoft, and Meta are investing in custom-built chips to minimize their reliance on the widely available but pricey GPUs. Looking ahead,NVDA

’s long-term picture is uncertain — even insiders are cashing out following a 200% year-over-year growth. One thing’s for sure: as the AI race accelerates, NVIDIA’s gold-plated Ferrari may lose pace to custom-built Toyotas.