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As Nvidia’s market value closes in on the unprecedented $5 trillion mark, a leading financial CEO is sounding a note of caution. Nigel Green, CEO of deVere Group, acknowledges the transformative power of AI but warns that current market valuations are built more on expectation than proven, sustainable profitability, creating a potential imbalance.
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The Belief vs. Profitability Gap
Nvidia’s staggering growth—with revenues more than doubling to over $44 billion in a recent quarter—is undeniable. However, Green highlights a critical disconnect. “The technology is real, the transformation is real, but the profitability still has to prove itself,” he states. He describes the current market dynamic as a loop where “chipmakers [are] selling to hyperscalers, software firms selling to one another,” creating the appearance of growth without the broad-based profits to justify the sky-high valuations.
A Circular Ecosystem and Concentration Risk
A key concern is the circular nature of the AI value chain and the extreme concentration of market capital in a handful of firms. Green warns that when the same small cluster of companies are the biggest buyers and sellers of AI capacity, “investment [is] feeding on momentum.” This concentration, while driving markets higher, also introduces fragility. A sustainable AI economy, he argues, will require profitability to spread across the entire ecosystem, not just be concentrated in infrastructure builders like Nvidia.
The Inevitable “Profit Check” and Long-Term Opportunity
Green is clear that this is not the end of the AI boom, but rather the start of a more demanding chapter. He draws parallels to the internet and mobile computing revolutions, which also saw capital flood in ahead of profits. “All revolutions reach a point where the narrative has to meet the numbers. We’re approaching that point.”
He insists this impending “profit check” is healthy and will separate companies delivering real value from those trading on hype. For investors, the strategy is not to retreat from AI but to become more selective. “The winners will be those using AI to create measurable productivity: in energy, logistics, healthcare, and finance, for example, not just those building the infrastructure.”
A Call for Selective Engagement
Nigel Green concludes that Nvidia’s meteoric rise exposes the current gap between belief and proof in the AI story. While the technology itself is “unstoppable,” he cautions that valuations are unsustainable without the profits to back them. His advice to investors is to “stay engaged, stay selective, and focus on where AI’s promise turns into performance.”
