Though the real economy might be circling the toilet, the stock market is doing gangbusters. US stocks grew to record-busting highs this week, fueled almost entirely by investments into AI. Amidst the boom, chipmaker Nvidia became the first company ever valued at $5 trillion in the history of financial markets — a mere 78 days after hitting $4 trillion.
With nothing but good vibes on Wall Street, you’d be hard pressed to find any stock analysts willing to go bet against the giant Nvidia — until now, that is.
Of the 80 analysts covering Nvidia for Bloomberg’s enterprise terminals, 73 of them currently rate Nvidia as a “buy.” Six of them say “hold,” but only one, Seaport Global Securities senior analyst Jay Goldberg, say “sell.”
Many economists have been watching in horror as they warn that AI spending is propping up the US economy with misallocated capital. Wall Street, however, is only seeing green. As Bloomberg notes in its reporting on the analyst, Goldberg is currently swimming against a stream of epic proportions.
“This is not my first bubble,” Goldberg told the publication, referring to the dot-com investment bubble of the late 1990s.
“That feels very strongly like the pattern we’re seeing now,” he continued. “We’re going to build up all this AI stuff for what are largely psychological reasons. At some point the spending will stop, and the whole thing will tumble down and we’ll reset.”
As part of his analysis, Goldberg points out that most of the money propping up the stock market is just being passed back and forth between a few massive tech corporations, a dubious practice known as round-tripping. All it takes, he says, is one phone call from the Financial Accounting Standards Board or Securities and Exchange Commission to put an end to the dubious moves.
“There’s a lot more that can go wrong with Nvidia than can go right,” Goldberg observes.
There’s also the simple fact that AI has yet to make any real revenue compared to its massive cost.
“I agree AI has the potential to be immensely powerful,” Goldberg said in an interview on Bloomberg Television, “but I think there are gonna be growing pains. No technology this big has ever been adopted in a straight line.”
Asked if he was concerned about risks to his reputation given his contrarian take, Goldberg commented that he was “surprised how little pushback” he got from big name clients — the kind of institutional investors whose money is holding the whole AI bubble up.
“I thought I was gonna have to fight them tooth and nail, but most of them quietly agree with me,” he said.
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