OK, so I’m guilty as charged. Even though Nvidia (NASDAQ:NVDA) shares were trading at a high valuation, a month ago I went ahead and issued a bullish call on NVDA stock anyway.

I suppose you could say that I broke my own rules. When a stock price gets ahead of itself, I usually avoid a bullish position even if I happen to like the company.

And I do like Nvidia. it’s hard not to like the next-generation graphics processing unit (GPU) maker. After all, the company continues to release positive fiscal data, quarter after quarter.

Still, I have concerns. One particular big-bank analyst recently released an ultra-positive assessment of Nvidia. The points are valid, but the expectations may be overstated.

A Closer Look at NVDA Stock

Over the long term, NVDA stock has been like a broken elevator that only goes up.

Sure, there were price corrections along the way. Those were brief, though. Even the onset of the Covid-19 pandemic was little more than a speed bump for Nvidia’s investors.

The rally of the past few months has been particularly troubling for the short sellers. From March 8 to June 18, NVDA stock climbed from around $460 to nearly $750.

And with that, the stock’s trailing 12-month price-earnings ratio was 88.1. For value-focused investors, that might be too hot to handle.

Incidentally, Nvidia does offer a dividend, but it’s nothing to write home about. Currently, the forward annual dividend yield is a paltry 0.09%.

So, what does this mean for investors now? What we have here is a stock that barely pays a dividend, so the shareholders will have to count on price appreciation even after a breathtaking rally.

That’s my primary concern. But then, somebody on Wall Street doesn’t necessarily see it that way.

Raising the Target

According to my painstaking research (I looked up his name on LinkedIn), Vivek Arya earned a Ph.D. and happens to be a Bank of America managing director and senior analyst.

His influence is considerable, to the point that several financial websites reported on Arya’s opinion concerning Nvidia recently.

It could even be postulated (without proof) that the issuance of Arya’s price target on NVDA stock actually helped the share price to move up a couple of percentage points.

So, Arya’s bullish call may have been a self-fulfilling prophecy, at least in the very short term.

Now, I can understand why Wall Street analysts have to raise their price targets when a stock goes up a lot. Otherwise, their targets would be lower than the actual share price.

Still, I’m having trouble accepting Arya’s $900 price target for NVDA stock. At some point (especially when the P/E ratio is heading towards triple digits) we just have to say that enough is enough. Right?

High Expectations

I’ll concede, my objection is cogently refuted by Arya’s argument that Nvidia “is no longer a pure-play GPU vendor of old.”

Indeed, Arya details Nvidia’s expansion – or better yet, its evolution – through tie-ins with value-added businesses:

With its acquisition of Mellanox and growing collaboration (and potential acquisition) with Arm, NVDA is expanding its data center silicon presence into new device types like [data processing units] and [central processing units].

Point well taken. I willingly went along with Arya’s bull case – until he predicted that Nvidia’s adjusted per-share earnings would roughly double from this year’s projected amount, to $32.92 in 2025.

That’s where I tap out, or at least tap the brakes.

Nvidia has already grown on a dramatic scale. Knowing this, I’m going to invoke the old saying, “Trees don’t grow straight to the heavens.”

Maybe I’m just wary of sky-high expectations. Or maybe, I’m realistic enough to see that even if a company keeps growing, the pace of growth typically can’t stay very high for very long.

The Bottom Line

I have great respect for Arya, even if we don’t see eye-to-eye on NVDA stock.

For the investors’ sake, I hope that I’m wrong about this.

If so, then I’ll watch in astonishment from the sidelines as Nvidia, somehow, grows without slowing down.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.