Shares of NVIDIA (NASDAQ:NVDA) keep on rising. After a bit of a blip in the last few months, NVIDIA stock just kept on climbing, eventually hitting an all-time high of US$974 by the end of March. Yet there has been some turbulence lately, causing perhaps some to wonder if the company can keep it up.
What’s been happening
A number of items have cropped up that have influenced NVIDIA’s stock price, whether for the worse or the better. Taiwan had a devastating earthquake this week, the worst in the last 25 years for the country. NVIDIA stock investors were also concerned as to whether the company could keep up its supply chain demands given the company’s heavy investment in the area.
However, NVIDIA stock believes that there will be no impact to chip supply after the earthquake. Meanwhile, it’s now expanding into other areas of South Asia. This includes a plan to build an artificial intelligence (AI) centre in Central Java, Indonesia this year worth US$200 million.
NVIDIA stock went on to lead the “Magnificent Seven,” the group of Big Tech firms that take up the seven highest market capitalization in the United States. The AI kingpin saw shares move upwards after the chip making update from Taiwan, coupled with the news out of Indonesia. All of this helped fuel more growth for the company to continue its streak after strong fourth-quarter earnings back in February.
Even so
It seems, however, that everyone is far too eager to see what’s going to happen next for NVIDIA stock. And that can be risky. That’s because the more people pay attention to the stock, the more willing nervous investors might be to sell it.
While this may not exactly trigger a selloff, it does mean the company is perhaps overvalued at these levels. Instead, I would consider another Canadian stock that’s just as hot as NVIDIA stock but with far less spotlight.
So, here’s why instead of NVIDIA stock, I would look to Celestica (TSX:CLS) instead.
Celestica stock
Shares of Celestica stock have seen just as much attention as NVIDIA stock, with shares up a whopping 313% in the last year. This comes perhaps not from being a chip provider but one that is part of the process.
Celestica stock provides a diverse range of manufacturing needs within the technology field. It’s across the world from Asia to Europe and North America, serving many industries. These include aerospace, defence, healthcare, industrial, telecommunications, and, of course, semiconductors.
The company is also know for its robust supply chain management capabilities, and technology solutions. They’ve managed to stay up top of innovations, especially with such high demand for semiconductor chips. Hence the interest with the rise in share price of NVIDIA stock.
Bottom line
While NVIDIA stock is certainly one to keep an eye on, it looks far too expensive for my taste. Instead, I would look to Celestica stock. It has a far more reasonable share price, a strong outlook, and more diversification for investors. So, consider this stock on the TSX today.
