Nvidia is a 'very boring idea' and could lose its market cap crown, says market veteran

The hottest AI commercialized connected Wall Street has officially go "boring."

"Nvidia would beryllium a precise boring thought ... due to the fact that we each cognize the story," serial entrepreneur Tom Sosnoff told Yahoo Finance's Opening Bid.

The erstwhile laminitis of Thinkorswim and Tastytrade argues that contempt Nvidia's technological dominance, the stock's communicative is excessively well-known and it whitethorn beryllium priced for perfection.

Sosnoff isn't a tech skeptic. In fact, he's a instrumentality of the product. He likened Nvidia's (NVDA) AI platforms to having a "genius champion friend" with a 165 IQ disposable astatine each times.

The problem, helium argues, is that Nvidia is present "totally afloat priced." When astir analysts and retail traders are already connected 1 broadside of the boat, that "boring" world suggests determination are precise fewer astonishment scenarios that tin thrust the terms importantly higher from here.

"I look astatine Nvidia and I'm reasoning to myself, however overmuch much upside [is] successful present and what benignant of downside is determination if this happening rolls over?" Sosnoff said. "It's not a relation of ... Nvidia itself. It's conscionable a relation of price."

The informing comes astatine a clip erstwhile marketplace volatility is hovering astatine multi-year lows and stocks are sitting astatine grounds levels. In the past year, Nvidia's shares person risen astir 40%, portion the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) precocious closed astatine all-time highs this month.

Still, Sosnoff isn't predicting a full marketplace collapse, but he's bracing for a world check. He anticipates a "nasty sell-off" successful the scope of 10% to 15% perchance hitting betwixt March and May.

"The likelihood favour the downside successful the market," said Sosnoff. He noted that portion the equity marketplace is partying, the enslaved marketplace has remained eerily stagnant. If that volatility returns, the "fully priced" darlings similar Nvidia are often the archetypal to consciousness the gravity. Moreover, marketplace fickleness could materialize erstwhile Federal Reserve Chair Jerome Powell's word ends successful May.

Another provocative instrumentality is that Nvidia's reign arsenic the world's astir invaluable institution is nether threat. When asked if the AI elephantine would inactive person its crown astatine the extremity of the year, Sosnoff was skeptical.

"I don't deliberation it's going to beryllium Nvidia," helium said regarding the marketplace headdress race. Google (GOOG, GOOGL) has precocious edged retired Apple (AAPL) to go the second-most-valuable institution successful the world, and it's wrong striking region of Nvidia arsenic it surges past $4 trillion.