This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) is getting a familiar warning as TS Lombard compares its AI fueled rise with Cisco’s run during the dot com boom.
Analyst Dario Perkins said Nvidia may be the new Cisco, not because the AI story is fake, but because expectations may be getting extremely hard to meet. Cisco was a huge winner during the internet buildout, yet its earnings took far longer to catch up with the valuation investors had already priced in.
The AI spending wave is enormous. TS Lombard estimates global AI capital expenditures could hit roughly $800 billion in 2026, with Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (GOOGL), Meta (NASDAQ:META) and Oracle (NYSE:ORCL) expected to spend more than $700 billion on data centers and related infrastructure.
The firm is not calling for an immediate AI stock reversal. It still sees cloud revenue, compute demand and data center investment accelerating. But for investors, the warning is clear: Nvidia can remain a great company and still disappoint if growth cannot keep up with the market’s very high expectations.
