May 27, 2023 - Economy
Chart: Nvidia stock's astonishing rise
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This is a chart you almost never see — and it helps explain why active fund managers like Cathie Wood were very unlikely to be overweight Nvidia going into the current rally.
Between the lines: The general rule of successful tech stocks is that they start out with high PE ratios as investors hope for future growth, and those ratios then fall as earnings rise.
The bottom line: The AI hype machine has propelled Nvidia's valuation to levels that even many Series A startups would envy.
