The senior portfolio manager, best known for his short bet against subprime mortgages ahead of the global financial crisis (and portrayed in The Big Short by Steve Carell), owns “a lot” of the chipmaker’s shares and considers it a long-term play that’s going to be relevant for years to come, he said Tuesday in an an interview on Bloomberg Television.

The stock gained as much as 4.1% on Tuesday, after a three-day slide that pushed shares down more than 10% for the first time since April, past the threshold that represents a correction.

“If you look at the chart on Nvidia, you can barely see the correction,” Eisman said. “I don’t think it means anything.”

The AI poster-child has soared this year amid a furious appetite for its chips that dominate the market for artificial intelligence computing. Its latest climb saw shares surge 43% from its May 22 earnings report and stock-split announcement to the June 18 peak, when it toppled Microsoft to become the world’s most valuable company—a title it has since lost.

Nvidia is still up 139% this year through Monday’s close. As some skeptics worry that the company has grown too quickly, Eisman says price is the last thing to fret over.

“One of the things I learned running a hedge fund is that shorting a stock solely because of valuation is a death wish,” he said, adding that people purchase a stock even when it’s perceived to be expensive because they’re buying into a story. “As long as the story is intact—like Nvidia is obviously intact—the story is going to continue. I don’t think all that much about the valuation of Nvidia.”

‘The company that wins in this space’

The message that Nvidia will continue to benefit from booming AI demand was echoed by Nuveen Asset Management LLC’s chief investment officer.

“Nvidia is the company that wins in this space, basically no matter what,” Saira Malik said in an interview. “Everyone who wants to shift into AI basically has to use Nvidia’s products. Their growth rate has been so strong that their price-to-earnings really isn’t expensive.”

Malik is a portfolio manager for several key investment strategies for Nuveen, a $1.3 trillion global asset manager. The $125 billion College Retirement Equities Fund-Stock Account, which she oversees, has outperformed 86% of peers over the past year, according to data compiled by Bloomberg.

Microsoft, Nvidia, Apple, and Amazon.com were the fund’s biggest holdings as of the end of May. 

“People will say the stock price itself has just done so well, how can you own it?” Malik said. When compared to peers, “it’s not an expensive stock.”

While Nvidia trades at a premium of about 50% to the Nasdaq 100 Index, its 12-month forward price-to-earnings ratio has pulled back from a 2023 high of 63 times down to about 40. It’s now valued close to peers such as Advanced Micro Devices.

Malik said the AI-fueled rally in Nvidia and Microsoft—which has propelled U.S. stock benchmarks to a series of record highs—is unlike the dot-com bubble.

“These companies are much more dominant because they are not brand new,” she said. “They’ve been around for years investing in this trend. So I do think it’s different this time.”