U.K.-based chip design company Arm debuted on the Nasdaq on Thursday, and now it’s trading at a premium to even fellow semiconductor firm Nvidia . Nvidia’s stock price has already more than tripled this year — far outpacing any other stock in the S & P 500. But Arm’s price-to-earnings ratio is now close to 170 times — towering over Nvidia ‘s, which develops graphics processing units for advanced, artificial intelligence processes. But hedge fund manager Dan Niles told CNBC’s ” Squawk Box Asia ” that he’d “much rather own” Nvidia for the AI play. He pointed out that 75% of Nvidia’s revenues are data center-driven, whereas less than 15% of Arm’s revenues are driven by AI. He added that Arm’s 10% revenue growth, which is expected to accelerate, is far below Nvidia’s forecast of 170% growth in the current quarter. “So that’s why I have an issue with buying Arm here in terms of the risk versus the reward,” said Niles, who manages the Satori Fund. Nvidia is also down around more than 7% so far in September and Niles describes that as a “very healthy consolidation.” “The nice thing is — for investors who felt like they missed it before, you can now buy it at a 31 times for PE which is down from about 50 or so before because the numbers went up so much after they reported,” he said. “So I think if you’re thinking of investing in AI, you really have to start within Nvidia because it’s not that expensive when you look at it relative to its growth rate.” He also advised investors to tap the AI theme with other names. His top AI plays, which he said are “growing revenues very nicely,” are Alphabet , Meta , Amazon and Intel . While Meta is using AI to place ads and drive recommendations, Intel is an AI play in terms of being a foundry for AI companies, he said. “Those are all names you can buy at much better valuations than you can buy Arm and I’m not arguing Arm isn’t a great company,” Niles said. “They’re an absolutely fantastic company. It’s just they’re not at a fantastic value. And that’s the critical difference.”