Core Viewpoint - The article discusses the potential for an investment bubble in artificial intelligence (AI), with Nvidia as a central figure, and the risks associated with the bubble's eventual collapse [1][12]. Group 1: Phases of the Bubble - Investment bubbles have five distinct phases: displacement, boom, euphoria, peak, and collapse, with AI currently in the euphoria stage where irrational investment decisions are prevalent [2][3]. - The peak phase is characterized by rising skepticism among investors about the sustainability of high stock prices, often leading to profit-taking [5][6]. Group 2: Nvidia's Position - Nvidia is positioned at the forefront of the AI revolution, producing high-demand computer chips essential for AI applications, which may suggest resilience against a bubble collapse [7]. - Despite Nvidia's current valuation being below its five-year average price-to-earnings ratio, the company is unlikely to escape the fallout when the AI bubble bursts, as investors tend to sell off all AI-related stocks during a collapse [8][11]. Group 3: Market Impact - Nvidia, Apple, and Microsoft collectively account for 21% of the S&P 500, indicating that a downturn in AI stocks could significantly impact the broader market, potentially leading to a bear market [12]. - The emotional dynamics of greed and fear in the market can lead to substantial losses for even strong companies, as seen in historical examples like Cisco Systems post-dot-com bubble [9][11]. Group 4: Investment Strategy - Investors holding Nvidia shares with significant profits may consider selling a portion of their holdings to lock in gains while still allowing for potential future upside [13].