Just about everyone knows this already... Nvidia (NVDA) is soaring. The chipmaker's stock has gained nearly 180% this year alone.

Nvidia Versus Rationality By Vic Lederman, editorial director, Chaikin Analytics Just about everyone knows this already... Nvidia (NVDA) is soaring. The chipmaker's stock has gained nearly 180% this year alone. That's an incredible gain for such a large company. And it has made Nvidia the second largest publicly listed company in America. The top five of that list, for the record, are Apple (AAPL), Nvidia, Microsoft (MSFT), Google parent Alphabet (GOOGL), and Amazon (AMZN). But just a few years ago, Nvidia was nowhere near those titans of technology. At the start of 2020, the company was worth just around $145 billion. That's a far cry from the roughly $3.4 trillion market cap it commands today. To many folks, that seems downright absurd. And they shun the company simply because its stock has soared so much. But even the "smartest guys in the room" can't help themselves when it comes to Nvidia... For example, Bank of America (BAC) just raised its target price on the company. Analysts there now think the stock can reach roughly $190 per share. That's a nearly 40% increase from today's price of around $138 per share. So today, let's see what the Power Gauge has to say about Nvidia. And I'll share my own thoughts on the subject, too... Recommended Links: Porter Warned Us – Did You Listen? The U.S. government spent a quarter of a trillion dollars it didn't have in July... then almost a half a trillion it didn't have in August. Meanwhile, core CPI inflation is now heading higher for the first time in a year and a half. As Porter Stansberry says, "This madness will not end well." See how he thinks you should protect your wealth today, right here. Bitcoin Legend Warns: 'A Bitcoin Surge Is Coming' Will you be left behind? The most trusted expert in cryptocurrency says, "The window is closing FAST," which is why he has agreed to share his No. 1 crypto trading strategy with you – absolutely FREE. This is the same strategy that has helped a small group of Stansberry Research subscribers see gains like 273%... 288%... 292%... 596%... and a whopping 1,175%. Learn more about it, right here. Longtime readers will know that before I joined Chaikin Analytics, I was fortunate enough to work alongside Steve Sjuggerud at Chaikin Analytics' corporate affiliate, Stansberry Research, before his successful retirement. Steve is a legend in the financial-newsletter industry. His macroeconomic insights easily put him in the top ranks of analysts around the world. And he was a master communicator. Steve guided his readers back into stocks after the 2008 bust. And he accurately explained that low interest rates would lead to an asset bubble unlike anything the world had previously seen. At the time, Steve dubbed it the "Bernanke Asset Bubble." That later would evolve into the concept of the "Melt Up." Put simply, Steve nailed it. And he delivered years of powerful analysis to his readers as a result. But legends in finance take time to learn and grow. After all, no one in life comes out with all the knowledge and experience they need on day one. In Steve's case, the dot-com bubble was a particularly sore spot for him. In hindsight, it was so obvious what was going on. But Steve, being the practical guy that he is, couldn't get on board with what seemed like "irrational exuberance." As you might recall, in 1996, then Federal Reserve Chairman Alan Greenspan coined that term. As Greenspan had said in a speech...   How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions... and how do we factor that assessment into monetary policy? But Steve wanted no part of it. All he saw was the "irrational" part of the trend. Explaining it to me, he said things like "it felt like everyone around me was getting rich except for me." And that he was "stuck on the sidelines." I can't help but think of that today... It's obvious that we're in the midst of an AI craze. And Nvidia is its poster-child stock. Today, the company earns a "very bullish" rating in the Power Gauge. And rightly so. The momentum behind the stock is as serious as it gets. But that doesn't mean it's fully rational, either. The Power Gauge sees that too... Today, Nvidia trades at a price-to-sales ratio of roughly 35 times. And it sports a price-to-earnings ratio of more than 40. That means the stock is expensive by traditional measures. So the "bearish" rating the company holds in the Financials factor category makes a lot of sense. But there's no avoiding the momentum behind today's market. So... what are investors supposed to do? Well, you could do what Steve did during the dot-com boom. You could end up stuck on the sidelines wanting nothing to do with the "irrational" side of this market. Or you can participate in the "exuberance"... and make an effort to step aside when the market falters. That said, at this point I think there are better and more interesting ways to play the AI trend than Nvidia. And at Chaikin Analytics, we've covered several of these companies in our paid publications. But the simplest answer is this... Today, we're in a bull market. And I intend to participate in it as long as possible. Of course, that doesn't mean blindly piling into any stock. As I've said many times here at the Chaikin PowerFeed, you still need to beware of the weaker stocks hiding within the strong overall market. But I don't want to end up stuck on the sidelines just because parts of this market are irrational. When conditions change, I'll use the Power Gauge to help me reevaluate. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 +0.04% 11 16 3 S&P 500 +0.38% 163 278 52 Nasdaq +0.66% 20 69 11 Small Caps -0.21% 604 988 327 Bonds +0.11% — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Utilities +3.41% Real Estate +3.02% Financial +2.39% Materials +1.81% Discretionary +1.49% Communication +0.88% Staples +0.73% Industrials +0.61% Information Technology +0.04% Health Care -0.49% Energy -2.66% *  *  *  * Industry Focus Pharmaceuticals Services 10 28 7 Over the past 6 months, the Pharmaceuticals subsector (XPH) has outperformed the S&P 500 by +3.92%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #15 of 21 subsectors. Top Stocks PFE Pfizer Inc. AMRX Amneal Pharmaceutica HRMY Harmony Biosciences *  *  *  * Top Movers Gainers NFLX +11.09% LW +10.17% ISRG +10.01% DXCM +4.07% PODD +3.26% Losers BG -6.33% CVS -5.23% CI -4.85% SLB -4.71% ADM -3.8% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close ARE, WRB NUE No earnings reporting today. Earnings Surprises RF Regions Financial Corporation Q3 $0.57 Beat by $0.04 AXP American Express Company Q3 $3.49 Beat by $0.20 FITB Fifth Third Bancorp Q3 $0.85 Beat by $0.03 PG The Procter & Gamble Company Q1 $1.93 Beat by $0.03 SLB Schlumberger Limited Q3 $0.89 Beat by $0.01 *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at STEVENMAGALLANES520.NIMS@BLOGGER.COM. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. 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