DBS Chief Investment Officer Hou Wey Fook stated on October 5, 2026, that AI-related stocks are not in a bubble. The assessment is based on Nvidia's forward price-to-earnings ratio of approximately 17x and a projected revenue growth of 70% for fiscal 2028.
Nvidia reported $96.2 billion in revenue for the fiscal second quarter ending in July 2026, marking a 106% increase year-over-year. The data-center segment accounted for nearly $89 billion of this total, driven by high demand for AI hardware.
DBS contrasts current valuations with the dot-com era, noting that historical peak valuations reached approximately 100x earnings. The firm highlights that current growth is supported by visible earnings rather than pure speculation.
Despite the positive outlook, DBS advises a barbell investment strategy. This approach balances holdings in AI and tech growth stocks with defensive assets to mitigate potential market volatility.
Future growth remains dependent on manufacturing capacity, as Nvidia currently operates in a supply-constrained environment where demand exceeds production capabilities.
