Wall Street has Nvidia (NVDA) under the microscope today as the chipmaker prepares to release its long-awaited second quarter results after the bell on Wednesday. As a key driver of the AI trade and broader market gains, investors have flocked to the stock to capitalize on the artificial intelligence boom.

However, The Bahnsen Group CIO David Bahnsen is not as optimisitic, warning investors to sell the stock while they can.

Bahnsen joins Morning Brief to discuss his bearish outlook on Nvidia ahead of its earnings results. He argues that the expected earnings growth was projected over a year ago and is "priced into the very high multiple at that time." While acknowledging that Nvidia has "performed remarkably well," Bahnsen questions whether new investors are "paying for a company that already has that [valuation] known?"

"70x earnings with a 100% earnings growth priced in. There's absolutely no margin for error," Bahnsen tells Yahoo Finance, stating that the company cannot maintain this kind of growth trajectory indefinitely.

He draws a parallel between Nvidia's growth and Cisco Systems's (CSCO) in 1999, noting that despite Cisco's consistent outperformance, "the problem is 25 years later, the stock is still nowhere near where it was in that bubble valuation."

Bahnsen ends with a warning: "You're buying Nvidia banking on there being another investor who's a bigger sucker than you are. It's called greater fool theory."

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

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