If something has a price of 4 -Trn, it may not seem like an obvious opportunity. But after Nvidia (NASDAQ: NVDA) The price of shares has reached the highest level over the past week, the Chip company has become the first in history that has achieved such a high market capitalization.

However, despite the meteoric growth (the price of NVIDIA shares increased 1 466% In just five years), can it be a potential opportunity for my portfolio?

The best can be above all

Perhaps surprising, I think the answer may be like this. Even at the current price, NVIDIA may still be a long -term opportunity.

This is because it has a robust position in the AI race, which can be both long and very lucrative.

We have already seen the enormous benefit that Nvidia distracted the sale of their reserved systems to a immense existing customer base, because customers are trying to escalate their AI capabilities. In the last quarter, NVIDIA revenues increased by 69% compared to the same period last year, reaching USD 44 billion. Net income increased by 26% in the year to USD 19 billion.

These numbers are engaging for several reasons.

First of all, they clearly show a huge growth. Secondly, they are significant – NVIDIA is not only a miniature startup, but a huge business that already generates solemn money.

In addition, with net income of 43% of revenues, NVIDIA profit margins are delicious.

If NVIDIA can utilize this success, for example by deepening existing customer relationships, while the demand for AI is growing, it can be even more profitable. This can reduce the price of NVIDIA shares even from the current level.

Here’s my concern

However, although I see the reasons why he could get up, I get nervous about the current valuation.

In relation to the price profit, I do not offer a safety margin that I would like as an investor.

The escalate in earnings in Nvidia has been phenomenal in the last few years. However, there is a risk that could harm future growth prospects, from intensive competition to immense tariff including some of the key markets of Nvidia.

Not only that, but it remains to guess how balanced the demand for steep AI will be after the initial round of immense expenses.

A lot of long -term uncertainty

Seeing positively, the demand for AI may escalate, which means that even the revenues we have seen in Nvidia in recent years are only the tip of the iceberg.

However, taking into account the alternative scenario, it may happen that the increased capacity combined with lower sales prices at some point falls from the AI market.

Even if the demand is high – and it turns out – prices can drop to a level at which profit margins are much thinner than today. This may seem too far -reaching now, but it is a dynamics that we saw over time in many rapidly developing markets, from home computers to mobile phones.

All things believe that I like NVIDIA as a company and I think that if the demand for chip is still developing, the price of the action may occur. But the current price is not comfortable with me from a risk management perspective. I will not invest for now.