As a journalist, I can report that Nvidia’s recent rally has forced many money managers to play catch-up. The technology company’s stock has surged by more than 50% this year, outpacing the broader market and catching many investors off guard.
According to a recent report by Bloomberg, Nvidia’s rally has been fueled by strong demand for its graphics processing units (GPUs), which are used in a wide range of applications, from gaming to artificial intelligence. The company has also benefited from the growing popularity of cryptocurrencies, which require powerful GPUs for mining.
As a result, many money managers who were underweight Nvidia at the start of the year are now scrambling to add the stock to their portfolios. Some are even buying call options, which give them the right to purchase Nvidia shares at a predetermined price, in order to profit from further gains.
However, some analysts are warning that Nvidia’s rally may be overdone. The company’s valuation has soared to more than 60 times earnings, which is well above its historical average. In addition, there are concerns that demand for GPUs may slow down as the cryptocurrency market cools off.
Despite these concerns, Nvidia’s strong performance this year has made it one of the hottest stocks on Wall Street. As money managers continue to play catch-up, it remains to be seen whether the company can sustain its momentum in the months ahead.
