NVIDIA Corp (NASDAQ:NVDA) blazed the trail for artificial intelligence-related stocks, raising some fears of overvaluation and a mounting tech bubble.

Not so, said analysts at Goldman Sachs this week, as earnings growth expectations warrant current lofty share price gains.

While Nvidia returned 522% since the start of 2022 and 84% year-to-date, Goldman analyst Ryan Hammond said the company’s price/earnings ratio was broadly unchanged since the start of 2023 with nearly all its return attributable to a higher stream of earnings.

For the sector, fears of a bubble could be largely discounted, he said. Three-year earnings growth expectations among the largest 10 tech stocks were around 15%, lower than the 24% seen during the tech bubble of 2000, while valuations were at 28x earnings, much lower than the 52x seen in 2000.

Also Read: Biden To Present Intel With CHIPS Act Award, Cementing Arizona As Semiconductor Hotspot

Three ...

Full story available on Benzinga.com