Nvidia (NASDAQ: NVDA) stock is constantly yo-yoing. Shares in the chipmaker have been on a rollercoaster journey this year.

Despite being up an incredible 157.5% year to date, that doesn’t paint the full picture. During that time, its share price has experienced some wild peaks and troughs. For example, looking across the last month, the stock is down 3.3%. However, it has climbed 6% in the last week.

But with it gaining momentum, could now be a good chance for me to consider adding the artificial intelligence (AI) player to my portfolio? Let’s explore.

Incredible rise

Nvidia’s rise over the past couple of years has been nothing short of amazing. From being a largely unknown business just a few years back, the chipmaker is now one of the most talked about stocks out there. In all fairness, a 2,791.4% rise in five years will tend to have that effect.

Naturally, its rise to fame has garnered plenty of attention. And while that may have proved to be beneficial for long-term shareholders, it does come with risk. The first is that there’s ongoing talk of a bubble in the AI industry.

People are buying into the AI hype. And with the growth predicted for the space, it’s easy to see why. However, some believe investors are snapping up the stock solely out of FOMO (fear of missing out). While that can drive its share price higher when times are good, it also creates the opportunity for its share price to come tumbling down if growth slows down.

Too expensive?

I’m not sure I want to take on that risk. I’m not comfortable with my holdings experiencing major share price swings as often as Nvidia does. But to try and get to the bottom of whether it’s really a stock for me to add to my holdings today, I want to take a look at its valuation.

Nvidia trades on a price-to-earnings (P/E) ratio of 58.3. The S&P 500 average is 23. So, while tech stocks tend to trade at a premium, that still looks very expensive in my eyes. Its forward P/E is 43.5. So, while that makes for a slightly better reading, I still think that’s a tad too overpriced.

Similarly, the stock looks overpriced when assessing its price-to-sales (P/S) ratio. It currently stands at a whopping 30.4. For context, the average P/S of the remaining ‘Magnificent Seven’ is 8.5.

Going on that, Nvidia looks like a stock to steer clear of, even after its share price has been gaining momentum in recent days.

More to come?

But then again, what’s to say if the business keeps up its incredible performance that it can’t just keep soaring?

For multiple consecutive quarters the firm has exceeded analysts’ expectations. Despite its lofty valuation, if it keeps this trend up, there’s nothing to suggest the stock will continue to climb.

Its latest set of results came in August. For the period, revenue grew 122% compared to the year prior.  

Not for me

With that said, Nvidia is a stock I’m staying away from for now. The threat of an AI bubble deters me. What’s more, the stock looks incredibly expensive.