Nvidia stock is the hottest investment in the world. Should I take action?

It's tempting to think that the best investment in the world is the best I can buy. However, that is often not true. Take it Nvidia (NASDAQ:NVDA) stock, for example; while it has grown 122.5% in the last 12 months, I wonder if its valuation is stable right now.

Past performance is no guarantee of future results. At a high growth rate, investing in a company can be very risky. So, I want to make sure I don't drink too much at the party.

Value versus leveraged investing

Some of the greatest investors of all time are value investors, including Warren Buffett. Oracle of Omaha may not be attractive to Nvidia at current valuations, in my opinion. After all, it has a price-to-earnings (P/E) ratio of nearly 51 and earnings growth that analysts expect from 39% in 2025 to 17.8% in 2026.

Some investors are active. Instead of 'buy low and sell high', which is the strategy of value investors, momentum investors 'buy high and sell high'. This only works if the company is not at the peak of its growth phase, which I think Nvidia could be.

Many tech company enthusiasts say the high demand for AI chips will continue. However, commentators say otherwise. While the AI ​​infrastructure will continue to grow, the adoption rate is currently slowing. Questions arise about the return on investment of such large costs in AI data centers.

Is it worth holding?

I don't currently own Nvidia shares, but I wish I had bought them five years ago. If I had, I would be sitting on a 2,315% price increase today.

While its future returns may show some volatility related to slow growth and overvaluation, I don't think this is the time to sell if I'm holding any shares. It's probably not the right time for me to buy. I think it is wise for me to wait until a few years have passed so that the valuation can stabilize a bit before I become a shareholder.

By comparing it with Meta again AmazonI estimate that Nvidia should have a P/E ratio of 30 if it trades at a fair value in 2026. At that rate, I think I might get a long-term bargain.

Based on my research, the company is well positioned to implement robotics trends in the future as well. If Nvidia cooperates with Tesla in Optimus and other humanoid robots developed by big tech companies, we can see another tall ox, in my opinionto.

I'm looking overseas

There is a reasonable concern at the moment by senior investors that the US market is becoming too large in general. Therefore, I am looking for hot growth investments in India, China, and other emerging economies. I also look at stocks that may be undervalued.

Another company that caught my attention recently JD.com from China. It sells below its net sales, with a sales ratio of less than 0.7. Management has indicated it may buy back up to $5bn of shares over the next 36 months. Those elements combined are the reason I am bullish.

So, Nvidia isn't worth my money right now, but JD.com might be. It's all a matter of balance.