Nvidia Corp. is currently the most expensive stock in the S&P 500 Index, trading at approximately 23 times the company’s projected sales over the next 12 months. However, the AI boom has made it challenging for analysts and even Nvidia’s own executives to accurately predict the company’s revenues. This uncertainty makes it difficult for investors to assess whether the shares are overvalued. For over a year, the surging demand for Nvidia's chips has consistently outpaced Wall Street’s quarterly financial estimates.

Since Nvidia's revenue began to skyrocket in April 2023, it has exceeded its forecast by an average of 13%, more than double the average of the past decade. In August, Nvidia’s sales surpassed projections by 23%, the largest margin in a decade. Analysts, like Morningstar’s Brian Colello, have struggled to model Nvidia’s sales due to unpredictable supply constraints amidst booming demand, leading them to frequently revise their price targets upwards. Despite these challenges, some investors remain bullish on Nvidia, driven by the stock's momentum. Nvidia’s shares have surged 156% this year, briefly making it the world’s most valuable company at $3.34 trillion. However, this rally also poses a risk, as the gap between analyst estimates and actual results creates volatility.