Nvidia Leads AI Stocks Skyward Despite Lofty Multiples
-
Nvidia stock has soared to a $2 trillion market cap, making it expensive at 36 times trailing revenue. But growth and profits could justify the valuation.
-
SoundHound AI stock has 45x trailing revenue multiple despite unproven business model and losses doubling revenue last year. Risky based on valuation.
-
MicroStrategy uses AI for analytics but has flat revenue and losses. Stock is up 137% thanks to bitcoin holdings, but 60x revenue multiple is steep.
-
Investors are paying high premiums for future potential growth from many AI stocks.
-
Valuations for Nvidia, SoundHound and MicroStrategy seem overly inflated based on financials, putting investors at risk of corrections.