Hedge Fund Elliott Management said Nvidia stock is in a 'bubble', its investors are in 'bubble land' and its rally is driven by an 'overhyped' AI technology, the Financial Times reported.
In a letter to the investors, Elliot noted that AI is “overhyped with many applications not ready for prime time," the report added.
Moneycontrol couldn't independently verify the report.
The comments come as chip stocks plunged on August 2 with Nvidia falling by up to 6 percent.
The tech-heavy index Nasdaq was down around 3 percent after a softer-than-expected jobs report spurred worries over whether the Federal Reserve will need to deliver hefty rate cuts at its next meeting to prevent the economy from spiraling into recession.
As per the report, Elliot said that many of the promised AI applications are won't be cost effective, not going to work right and will take too much energy.
The Elliot said AI has not delivered significant productivity yet that its applications had promised and that there were only “few real uses” for AI at this stage beyond “summarising notes of meetings, generating reports and helping with computer coding," the report added.
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