DBS Group Chief Investment Officer Hou Weifu said that NVIDIA's price-to-earnings ratio and its forecast of 70% earnings growth next year indicate that the AI-driven technology stock rally is far from entering bubble territory.

Data shows that NVIDIA's current share price is equivalent to 17 times its expected earnings over the next 12 months.

Hou Weifu compared this with Cisco's valuation multiple of as high as 100 times before the dot-com bubble burst.

"If NVIDIA, as the representative company of AI, has a price-to-earnings ratio of only in the teens, how can this be called a bubble?" Hou Weifu said in an interview.

He also said that semiconductor and AI investment is still supported by favorable factors.

However, in order to control the overall volatility of the portfolio, Hou Weifu still advocates adopting a "barbell" strategy.

At one end, allocate to growth assets such as technology stocks to capture the growth opportunities brought by AI; at the other end, allocate to investment-grade fixed-income assets to provide stable returns.

At the same time, hedge funds and gold can be allocated as risk diversification tools.