One way for investors to get into trouble is by ignoring price. A great company can be a great investment at one price and a terrible investment at another price.

Arm Holdings (NASDAQ: ARM) and Nvidia (NASDAQ: NVDA), two chip stocks with serious competitive advantages, have won over investors. Arm went public last week and immediately soared, while Nvidia is riding the artificial intelligence (AI) wave to incredible profits. But both stocks are incredibly expensive, and neither appears to fully deserve its overheated valuation.

By all accounts, Arm Holdings had a successful initial public offering (IPO). The chip company, which licenses CPUs based on its Arm architecture as well as the architecture itself, saw its stock soar right out of the gate. Arm is now valued at around $65 billion after debuting at a $54.5 billion valuation.

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Source Fool.com