Nvidia (NVDA) reached a record $5.78 trillion intraday market value on Monday, and tech analyst Dan Ives says Wall Street’s numbers for the chipmaker are probably 25% to 30% too low.

Yet Nvidia, the artificial intelligence (AI) bellwether, leads 10 stocks that make up about 39% of the S&P 500. A stumble could reach well beyond chip investors.

How Strong Is the Bull Case for Nvidia?

Ives is a partner and senior managing director at merchant bank Yorkville Ives & Co. He told CNBC’s Closing Bell that Asian checks show chip demand at 13 to 14 times supply.

“…it’s the one chip in the world fueling the AI revolution.”

Dan Ives, CNBC

Michael Burry, the investor behind The Big Short, disagrees. He holds Nvidia put options through September 2027 and says the AI bubble could burst early.

However, Singapore’s DBS Group told Bloomberg Nvidia trades at 17 times forward earnings, versus Cisco’s 100 before the crash.

Could Nvidia Have Its Lehman Moment?

Lehman Brothers shows how one failure can freeze credit. Its $639 billion bankruptcy in September 2008 was then the largest one-day market loss.

Nvidia invests in customers that buy its chips. In August, it announced preliminary agreements with six financial firms for about $500 billion in customer financing, CNBC reported.

Therefore, a customer default could loop back to Nvidia. A boom-bust funding gap signal preceded both the dot-com and housing busts.

Meanwhile, the dot-com bust shows how far tech can fall. By October 2002, the Nasdaq Composite had slid to 1,139 from a March 2000 peak of 5,048. Enron’s 2001 bankruptcy dragged down its auditor, Arthur Andersen. Lenders funding Nvidia’s customers could face knock-on losses too.

Asia could feel it first. Chip-led exports lifted South Korea’s nominal output 26.4% year on year in the second quarter.

Ives may prove right on earnings. Still, the market’s exposure no longer hinges on Nvidia surviving. It hinges on whether the customers buying its chips keep finding someone to fund them.

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