A major disagreement has erupted between Wall Street and global financial watchdogs over Nvidia’s historic $5.05 trillion valuation. While investors are celebrating a “boom,” institutions like the IMF and Bank of England are issuing formal warnings of a “bust.”
The investor case is clear: Nvidia’s value grew $1 trillion in three months, it has a $500 billion order book, and it has locked in a $100 billion deal with OpenAI. These are not a “maybe”; these are hard numbers reflecting a massive demand for AI infrastructure.
This bullish sentiment is echoed by Nvidia’s partners, which include Uber, Nokia, and the US government, and vocal supporters like President Trump. For them, Nvidia is the new center of the technological universe.
However, the watchdogs see a dangerous bubble. The IMF and BofE warnings are not casual; they are formal alerts about systemic risk. They fear the market is in a speculative frenzy, detached from economic fundamentals.
Their fears are rooted in the “circular” nature of deals like the $100 billion OpenAI pact and, more importantly, the lack of real-world profits. Analysts are concerned that “nearly all AI pilot programs in businesses fail.” This suggests Wall Street is trading on hype, while financial watchdogs are bracing for the inevitable correction.