Did Nvidia just help create an AI fueled stock bubble?

It was only three years ago that Nvidia, the world's leading graphics processing unit (GPU) manufacturer, announced its foray into the world of artificial intelligence (AI) with the launch of its Tesla GPU accelerators. Since then, the company has gone from strength to strength, as demand for its high-performance processors has soared along with the growth of AI applications.

But is this growth based on solid fundamentals, or is it a classic case of hype-driven speculation and market manipulation?

The Numbers Tell a Story

Let's start with some stats. In 2015, Nvidia's stock price was trading at around $25 per share. Fast forward to early 2018, and the stock was trading at over $250 per share - a tenfold increase in just three years.

Meanwhile, the market capitalization of the entire GPU market has exploded, with some estimates predicting it to reach $157 billion by 2022.

These numbers are impressive, but on their own, they don't tell us much about the underlying value of the companies involved. To really understand what's going on, we need to dig deeper into some of the key drivers of this growth.

What's Driving the AI Stock Boom?

There are a number of factors that have contributed to the recent surge in AI-related stocks, including:

• The exponential growth of data
• The increasing sophistication of AI algorithms
• The availability of cheap, high-performance computing power
• The rise of cloud computing and scalable infrastructure
• The development of new applications and business models that leverage AI

All of these factors have combined to create a perfect storm that has fueled the growth of companies like Nvidia. But there's another factor that's less often talked about - the role of hype and speculation in driving up stock prices.

Is the AI Stock Boom a Bubble?

When we see companies like Nvidia experiencing massive growth in stock price over a short period of time, it's natural to be skeptical. After all, we've seen this movie before - remember the dot-com bubble of the late 1990s?

The fact is that there's certainly an element of hype and speculation fueling the current AI stock boom. Companies that are pursuing AI applications are being valued at multiples of their revenue, often with little consideration for their profitability or long-term growth prospects.

But that doesn't mean that this is a bubble that's doomed to burst. There are certainly some companies that are driving genuine innovation and creating significant value in the process. The key is to separate the wheat from the chaff.

Conclusion: What to Watch for in the AI Stock Market