2024-04-07 12:00:00 ET
Recently, I've spotted several article headlines warning Nvidia (NASDAQ: NVDA) investors to be cautious because its stock's recent big run-up shares key similarities with Cisco Systems (NASDAQ: CSCO) stock's huge run-up in the 1990s before it crashed in 2000 when the dot-com bubble burst. In just one year, Cisco stock plummeted 77% after hitting its all-time high on March 27, 2000.
Let's dig into the qualitative reasons why the comparison of Nvidia now to Cisco in the late 1990s isn't a good one. A second article on this topic will focus on the quantitative reasons, including differences in profit margin trends and stock valuations.
The above subheading is a reference to Nvidia's business -- and yes, it's an exaggeration because artificial intelligence (AI) supercomputers can have thousands of graphics processing units (GPUs).
For further details see:
Nvidia Stock Is Like Cisco Stock Before the Dot-Com Crash? There Are Big Holes in This Theory