Nvidia's Valuation Stretches Beyond Cathie Wood's Reach

Cathie Wood, manager of the ARK Innovation ETF, has labeled Nvidia as "priced ahead of the curve" due to its outsized jump and trading at 25 times estimated sales for the current financial year, compared to six times for its peers on the Philadelphia Semiconductor Index. Some analysts say the outlook for chips is still dismal amid tepid demand for consumer electronics and more traditional servers. Nvidia's latest bullish guidance has driven up Wall Street's earnings estimates, so that its price-to-earnings ratio for the current year has come down from near 70 times to around 55 even as the stock has soared.