Nvidia may be the hottest tech crown jewel for Wall Street at the moment, but at least one investor’s not buying into it. David Miller, co-founder and chief investment officer of Catalyst Funds, thinks the artificial intelligence space is “overheating,” with Nvidia as a prime example. “If you look at AI stocks or Nvidia in particular … Nvidia’s a phenomenal company, massive revenue growth, massive earnings growth, but there’s a question — how wonderful are they? The question isn’t, are they wonderful, but are they worth $2.2 trillion?” he said to CNBC in a recent interview. Miller said Nvidia is inherently different from companies such as Microsoft and Apple, which he thinks are worth their $2 billion valuations. But Nvidia is a hardware business, which haven’t demonstrated their ability to dominate, unlike software ecosystems firms. Nvidia’s fiscal fourth-quarter revenue was also unprecedented for the company, adding to Miller’s worries. The company raked in $22 billion in revenue for the period , adding it sees fiscal first-quarter sales of $24 billion. Miller said there’s a certain limit or ceiling to how large Nvidia can become, especially given its already exponential growth so far. “I have little doubt that AI is going to be a massive technology breakthrough that will reshape our world,” Miller said. “Does that mean that that company will be able to maintain software margins for a hardware company, which has never been done before in history and continue that exponential revenue growth in the piece of a $2 trillion valuation? That I’m a little bit doubtful.” Nvidia shares more than tripled in 2023 as investors flocked into the AI darling. This year, the stock is up another 82%. What he likes Instead, Miller likes Hims & Hers Health , which he said can justify its revenue and margin growth due to the stock’s large runway. The company can benefit as it aims to streamline the prescription fulfillment process in the medical industry, he noted. “It’s easier to get to a much bigger valuation where you’re starting from something small,” Miller noted. The company can “really take a lot of market share, but in a very profitable way that’s recurring in nature, whereas something that’s hardware, you have to always stay on top.” Hims shares are up nearly 70% year to date. Miller also likes Alpha Metallurgical Resources in the coal space, citing supply-side pressures as a major catalyst. Environmental factors Metallurgical coal, he said, is necessary to produce steel and is different from thermal coal, which has the potential to be replaced by other sources of energy such as natural gas, nuclear and renewable power. Metallurgical coal companies are trading very cheaply alongside their thermal coal peers since investors are “throwing the baby out with the bathwater,” Miller said. Environmental regulations limit the amount of coal mines in the U.S., which could boost shares of Alpha Metallurgical Resources. “You have a great risk-to-reward opportunity when you’re paying for pretty discounted valuations for an area where there’s going to be more supply needed,” he added. “There’s going to be more metallurgical coal used over the next three to five years, but there’s no new supply coming online.” Miller’s fund, the Catalyst Systematic Alpha I, has consistently demonstrated a history of outperforming the market. The fund has returned 10.2% year to date versus its category average of 4.6% and ranked in the first or second percentile in four out of the past five years, according to Morningstar . The fund also charges 1.81% in fees.