DBS: Nvidia's valuation remains low, AI stocks are far from a bubble.

BlockBeats news, October 5 — DBS Group Chief Investment Officer Hou Wey Fook said that Nvidia's price-to-earnings ratio and its projected 70% earnings growth next year indicate that AI-driven tech stocks are still far from a bubble.

Aggregated data shows that Nvidia's current forward 12-month price-to-earnings ratio is 17 times. Hou compared this with Cisco Systems' valuation of about 100 times before the dot-com bubble burst.

In a television interview, he said: "If the representative company in the AI field is defined as Nvidia, and its current price-to-earnings ratio is only in the teens, how can you say this is a bubble?" He added that semiconductor and AI investment still has "tailwinds." However, Hou recommended a "barbell strategy" to "control the overall volatility of the portfolio," namely allocating to tech stocks on the growth side while pairing them with investment-grade fixed-income assets to provide stable income, and using hedge funds and gold as intermediate risk diversification tools.