'Very possible' Nvidia selloff could bring the whole market down, warns Rob Arnott By

NVIDIA Corporation's (NASDAQ:) market valuation is Futures exchange and foreign exchange dealers“a textbook story of a Big Market Delusion,” according to Rob Arnott, the founder of Research Affiliates LLC.

Speaking to Bloomberg, Arnott warned that Nvidia’s lofty valuation may become a bigger problem for the whole market than some think it is.

“Overconfident markets paradoxically transform brilliant future business prospects into even more brilliant current stock price levels,” Arnott wrote in his research note to clients, according to Bloomberg.

While highlighting that NVDA shares trade at around 110 times earnings, Arnott says that “Nvidia is today’s exemplar of that genre: a great company priced beyond perfection.”

Along these lines, “it’s very possible” that Nvidia stock selloff could bring down the entire market.

Nvidia is not “too big to fail,” it’s “too big to succeed,” he added.

“The risk that we’re wrong, that Nvidia’s off to incredible things and will go up another 10-fold in the coming 10 years is possible,” he said. “I would say it’s not plausible, and therefore I’m comfortable calling it a bubble.”

Nvidia shares are up 232% year-to-date.

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!