Nvidia (NASDAQ: NVDA) stock is seeing a massive artificial intelligence (AI)-fueled surge in 2023, rising 212% so far thanks to the critical role the company's graphics cards and processors play in training AI models and running inferencing applications.

In fact, Nvidia's role in the proliferation of this technology is so profound that Morgan Stanley recently singled out the company as a proxy for AI stocks. That's not surprising, as it wouldn't have been possible to train popular large language AI models such as ChatGPT from (NASDAQ: MSFT)-backed OpenAI without thousands of data center GPUs (graphics processing units) from Nvidia.

However, the AI-driven surge in Nvidia stock has made it so expensive that investors who haven't bought it yet may be scratching their heads and wondering if it is a good investment anymore. And they cannot be blamed, as Nvidia's price-to-earnings ratio stands at a whopping 229, whereas its five-year-average earnings multiple is 73. The sales multiple of 42 further indicates how richly valued the stock is.

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Source Fool.com