After a wave of consecutive gains, the "AI leader" NVIDIA has once again approached a historical high, causing investors and analysts to cheer.
On Wednesday Eastern Time, the stock saw a slight correction of 0.18%, closing at $132.65, still only one step away from the previous peak of $135.58 set in June.
However, even so, some analysts believe that the market still underestimates Nvidia.
Ian Simm, CEO and founder of UK asset management company Impax Asset Management, stated that considering the boom in artificial intelligence (AI) will drive demand for its chips, Impax still believes that Nvidia's valuation is undervalued.
Simm said that like other tech giants, Nvidia needs to consume a lot of energy to drive its growth, and from a climate perspective, holding Nvidia also makes sense. He said that as energy demand continues to grow, more efficient models developed by Nvidia and other companies will be more environmentally friendly.
Nvidia announced at an event earlier this month that its Blackwell chips will be launched to customers starting this year, requiring 3 gigawatts of power to develop OpenAI's GPT-4 software. The chip manufacturer stated that ten years ago, this process would require 5500 gigawatts of electricity.
NVIDIA's ability to save energy makes it more valuable, "Simm added.
Impax, headquartered in London, was founded in 1998 and has become a giant among asset management companies focused on transitioning towards a more sustainable economy. At present, this asset management company with an asset size of $50 billion holds NVIDIA in its portfolio of five strategies and funds. According to Simm, this includes its well-known product, the Global Opportunities portfolio.
It is reported that the investment portfolio only holds 40 stocks, including some companies with diversified business models, operating in high growth markets, and being unpopular for some reason.
He said that Nvidia was included because Impax believed that Nvidia was undervalued "in the long-term trend of continuous development of artificial intelligence".
Simm also stated that in fact, the entire industry now appears to be undervalued. He said that as the possibility of a soft landing for the US economy increases, this situation may change, which will help restore confidence. The cost of capital is decreasing and consumer confidence is stabilizing, so stocks' look more attractive '.
According to Impax data, as Nvidia's stock price fell in June, Impax's stake in Nvidia increased from 1.4 million shares at the end of the first quarter to 4.9 million shares at the end of September, more than doubling.
We just underestimated the market potential of their product, "Simm said in an interview." Impax has been looking for ways to enter the Nvidia market, but Nvidia is too expensive. Until there was a sell-off
Simm also stated that Impax is learning from the experience of the past few years and focusing more on large tech companies as it seeks undervalued opportunities to generate greater returns.
To be frank, our main strategy has not performed well in the past few years because we have been growing at reasonable prices and staying away from the momentum and hype of large tech stock investments, "he said.
In the past few years, the soaring interest rates, energy crisis, and the rise of the "tech giants" have turned green investment into a failed gamble. Since the beginning of this year, the stock price of Impax has fallen by nearly 30%, while the S&P Global Clean Energy Index has also fallen by over 10%. At the same time, the S&P 500 index rose by over 20% during the same period.