A Reddit post in the popular r/NvidiaStock community has sparked a fiery discussion over whether Nvidia (NASDAQ: NVDA) is overvalued in 2025—despite the company’s explosive growth in artificial intelligence, data center dominance, and continued revenue beats.
The post, titled “Would you agree with me if I told you that NVDA is only worth $400?”, triggered a deep dive among retail investors into the bullish and bearish cases for Nvidia’s market cap, current valuation, and long-term growth.
The Bearish View: “Fundamentals Can’t Justify This”
The original poster (OP) argues that Nvidia’s price-to-earnings (P/E) ratio, which remains sky-high even after recent earnings reports, reflects more hype than sustainable financials:
“Nvidia’s margins are already maxed out, the AI bubble will cool down, and this current valuation doesn’t make sense. $400 is fair value.”
Key points made by bears in the thread include:
- Declining Marginal Growth: AI chip demand could plateau as hyperscalers reach capacity.
- Valuation Concerns: P/E ratio above 70 remains hard to justify even with explosive earnings growth.
- Market Saturation: Bears argue Nvidia may already dominate the markets it’s in, limiting future expansion.
- Macroeconomic Risks: Interest rate uncertainty and geopolitical tensions could cool tech valuations.
The Bullish Case: “Nvidia Is the New AWS”
In response, Nvidia bulls came out in force, comparing the company’s current position in AI and data center architecture to Amazon Web Services (AWS) in the 2010s.
“Nvidia is AI infrastructure. You’re not just paying for current earnings—you’re paying for the future of computing.”
Arguments made by bulls include:
- Dominance in AI Training & Inference: Nvidia’s GPUs are critical to models like ChatGPT, Gemini, and enterprise LLMs.
- Enterprise & Cloud Partnerships: Deep integration with Microsoft Azure, Google Cloud, and AWS builds a wide economic moat.
- Software Ecosystem Growth: CUDA and Nvidia’s AI SDKs are driving high-margin recurring revenue streams.
- Strong Cash Flows & Buybacks: Nvidia continues to deliver exceptional returns on capital.
Community Sentiment: A Split Market
While some Reddit users agreed that $400-$500 might represent fairer value based on traditional models, others insisted that Nvidia’s disruptive position in the global AI arms race warrants a significant premium.
Some neutral voices added that “valuation is always subjective in a growth story” and that while the stock may correct in the short term, its long-term trajectory remains upward.
Where Analysts Stand
Wall Street analysts remain mostly bullish on Nvidia, though a few have adjusted their price targets slightly downward amid growing competition from AMD and custom AI chips from Meta, Google, and Amazon.
Current NVDA stock price (as of May 6, 2025): $912.34
Consensus price target (12-month): $950–$1,050
Key Takeaways
- The discussion reveals growing division among retail investors as Nvidia’s valuation climbs.
- Bears cite margin compression, saturation, and macro risk.
- Bulls point to Nvidia’s foundational role in AI, software, and cloud compute infrastructure.
- Both sides agree that 2025 could be pivotal in determining whether Nvidia justifies its premium.
Would you buy NVDA at this price? Or wait for a correction? The market is watching—and debating—loudly.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.