ARE NVIDIA’S SHARES OVERVALUED FOLLOWING THE SURGE OF ARTIFICIAL INTELLIGENCE?

• Main Author: Hilmi Farhan, Ahmad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85784
• Institution: Institut Teknologi Bandung

The research examines whether NVIDIA's shares are overvalued in the wake of rapid advancements in artificial intelligence (AI), with a particular focus on the role of graphical processing units (GPUs). The study uses a quantitative methodology to analyze NVIDIA's financial performance, market trends, and the impact of technological innovations on its stock valuation. Key financial indicators including revenue streams, profit margins and market share were also examined utilizing the DCF and multiples comparison method, alongside an event study methodology. Findings indicate that NVIDIA’s significant market share and pioneering role in AI and gaming have led to a sharp increase in its stock price, potentially inflating its market valuation beyond fundamental financial metrics. This overvaluation speculation is supported by an in-depth financial analysis comparing NVIDIA to its peers, revealing that its market price may reflect heightened investor expectations tied to the AI boom and its central position in the gaming industry. The research concludes that while NVIDIA demonstrates robust financial health and industry leadership, the disproportionate rise in its stock price suggests a market sentiment heavily influenced by future growth prospects in AI, warranting cautious investor assessment against traditional financial indicators.