The seemingly relentless rally for Nvidia has begun to unnerve some market watchers, but many investors are firmly behind the chipmaker, as evidenced by its 3.6% jump on Monday. . One such investor is Zahid Usmani, a portfolio manager at Europe-based Martin Curie affiliated with Franklin Templeton. Osmani told CNBC that he sees a “potential risk of froth” in the AI trade overall, but not for Nvidia. “Unlike the AI basket [stocks] Having seen multiple expansions, Nvidia has actually seen multiple contractions. The share price has risen less than the earnings upgrade,” Usmani said. Nvidia’s price-to-earnings ratio, using estimates for the next 12 months, is 32.4, according to FactSet. That’s substantially higher than the S&P 500’s P /E ratio is up, but below Nvidia’s five-year average. This may come as a surprise to some, given the fact that Nvidia’s stock is up more than 250% over the past year. NVDA 1Y Pahari shares are up more than 250% over Nvidia over the past 12 months. Beyond the forward price-to-earnings metric, Usmani also highlighted the “PEG ratio” — the price/earnings ratio of earnings growth. Divided — and return on invested capital — as valuation metrics that looked favorable to Nvidia. Nvidia’s PEG ratio is currently just a relatively tame 1.1, according to FactSet. is one of the largest holdings in the U.K., including the FTF Martin Currie U.S. Engineered Fund, based in the U.K. Osmani’s funds are highly concentrated, and one of the three core themes that the funds focus on is synthetics. There is intelligence. Another top AI holding is Microsoft, which benefits from an equity stake in OpenAI and an existing customer base of large companies. “Ultimately, corporates will not be challenged by AI. They will be challenged by another corporate that uses AI better and faster than them. Hence the need to spend more on AI. will be an important element of corporate,” Usmani said. Focusing on two big stocks raises the possibility that Martin Currie’s funds will miss out on the rise of a new company, but Osmani said that kind of bet fits his team’s investment philosophy. do not have. “We tend to focus on companies that have high returns on invested capital and attractive growth profiles. So yes, there will be companies that have attractive growth opportunities, but they’re going to have their lives. will be early in the cycle. We support companies that are ultimately better established,” Usmani said.