Nassim Taleb, who is a renowned risk analyst and author of The Black Swan, believes that Nvidia’s (NVDA) recent 17% stock plunge is “just the beginning” of future losses. Speaking to Bloomberg at Miami Hedge Fund Week, Taleb warned that Nvidia’s valuation may be due for a significant correction. Taleb thinks Nvidia’s stock could experience losses that are two or three times larger than Monday’s drop, which wiped out $589 billion of its valuation.
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He views this as an “adjustment to reality” as investors begin to question what has been a flawless performance from Nvidia so far. Indeed, Taleb compared this moment to discovering a small chip in a glass, which is usually the beginning of a more significant issue. Taleb’s comments come during a time when investors are concerned that top U.S. tech stocks, particularly those involved in artificial intelligence, may be overvalued.
In addition, investors are now worried that U.S. AI models may be too expensive following the launch of DeepSeek’s affordable AI model. Interestingly, Taleb compared DeepSeek’s development to the early days of the internet. In fact, he warned that investors may be backing the wrong horse, much like how investors were backing AltaVista in 1998-1999 before Google (GOOGL) “came out of nowhere” and became the dominant company.
Is NVDA a Good Stock to Buy?
Turning to Wall Street, analysts remain bullish on NVDA stock, with a Strong Buy consensus rating based on 37 Buys and three Holds assigned in the past three months. After a 103% rally in its share price over the past year, the average NVDA price target of $178.32 per share implies an upside potential of 41% from current levels.
