NVDA
The new ‘too big to fail’ trade?
Pierre Ferragu of New Street Research basically told CNBC not to count Nvidia out just because it’s already enormous. His view: the market is still underappreciating how fast AI adoption is spreading, and Nvidia’s earnings power is getting treated like a sleepy utility when it’s really more like the engine room on a rocket ship.
Why he thinks $400 isn’t crazy
Ferragu argued Nvidia is trading at a single-digit multiple on 2028 earnings if you trust Jensen Huang’s growth commentary. That’s Wall Street shorthand for: “this thing looks expensive until you zoom way out, then it starts looking weirdly cheap.” He also pointed to Nvidia’s supply constraints and management’s expectation of at least 70% growth next year as proof the AI spending wave still has juice.
The Apple comparison
To make the case less sci-fi, Ferragu compared Nvidia to Apple in the early 2010s. Back then, people worried Apple had gotten too huge to keep running; then the market slowly realized scale plus pricing power can still print money. Same vibe here: Nvidia may need investors to stop staring at its size and start staring at its cash flow.
Why you should care
The stock was already up 20% year to date and trading a bit higher in premarket, so this isn’t a “dead money” story. It’s a reminder that in AI land, the market may still be playing catch-up — and if Ferragu’s right, Nvidia’s biggest edge isn’t hype, it’s that the hype is still trailing the fundamentals.
Big picture: when a stock gets this large, the real battle is less about whether it can grow and more about whether investors are willing to believe the growth story still has chapters left.