Nvidia Hits a New All-Time High. Is the AI Stock a Buy?
2026-10-07 01:15
•Jeremy Bowman •The Motley Fool
••••• ••••••••••• Axe Cap view
Nvidia's AI Run: Worth the Rand Risk?
Nvidia’s new highs in AI chip leadership offer lessons for South African investors watching USD/ZAR and tech exposure.
Nvidia’s leap to a fresh record highlights how AI excitement can drive tech stocks. With a P/E of 30, it's cheaper than rivals AMD and Intel, which trade on much loftier expectations. That makes Nvidia look like a well-priced leader in a market often marked by hype. However, the reality is that Nvidia’s huge growth forecasts hinge on the AI boom continuing without major disruption—the likes of Amazon and Google building their own chips threaten that narrative, and any slowdown could quickly dim the glow. What does this mean for South African portfolios? Nvidia’s shares aren’t listed on the JSE, so keeping an eye on USD/ZAR makes sense: a weak rand could magnify returns but also increase risk. For banks like Standard Bank and FirstRand, which have tech exposures and offshore earnings, AI could be a positive knock-on effect if global tech stays buoyant. Yet, local investors should pace their bets — patience is key while the AI sector sorts itself out. this is just our opinion and not financial advice
Watch USD/ZAR for clarity before adding offshore tech exposure. Favor selective JSE banks with solid balance sheets like Standard Bank or FirstRand over direct bets on volatile global AI stocks. Trim high-flying local tech plays if your risk appetite is low.
- USD/ZAR
- Standard Bank
- FirstRand
- AI growth disappoints due to competition from Amazon and Google
- Rand weakness increases downside in USD-exposed investments
6/10
Nvidia reached a new all-time high of $243.37 per share, driven by positive macro conditions and strong AI sector momentum. Trading at a P/E ratio of 30, the stock appears undervalued compared to peers like AMD (166 P/E) and Intel (103 P/E), with Wall Street expecting 67% revenue growth to $687 billion in fiscal 2028. While the law of large numbers may eventually constrain growth and competition from AMD, Intel, and custom chips from Amazon and Google pose risks, analysts view Nvidia as well-positioned to capitalize on AI growth and recommend it as a strong buy.
Our take is based on reporting first published by The Motley Fool.