My video on the artificial intelligence company, Nvidia. I hope you enjoy the video! If you enjoy this content, you can support the channel by subscribing and liking this video! Thank you.
The reason people pile into financial manias near tops is that they think the trend will never end. Last month, an Nvidia spokesman announced that the mania for stocks of companies that make chips to run AI is "just at the beginning." Look at the chart. Wouldn't that statement have been brilliant had it been made in 2015? But no, we heard it after Nvidia had risen nearly 600,000% to a value of $3.4 trillion, which is more than the value of Apple, more than Microsoft, more than the entire stock market of France, more than the entire stock market of the U.K., and more than 12% of the U.S. GDP for 2023, and after the head of the company became such a celebrity that he is called "the Taylor Swift of tech." But hey, it's just getting started.
Linear Extrapolation is a good term to use! Nvidia's forward P/E ratio is currently lower than it was in early 2022. However, it's crucial to remember that these earnings are projected, not guaranteed. If Nvidia continues to surpass analysts' expectations for both revenue and profit, it's reasonable to expect the stock's remarkable growth to persist (barring any major macroeconomic setbacks). In the video, I argue that competition is on the horizon, primarily from big tech companies, who as a matter of fact, are also Nvidia's biggest customers (by far). Additionally, startups like Groq and traditional rivals such as Intel and AMD are entering the fray. I believe this competition will impact both Nvidia's sales volume (currently constrained by supply) and pricing power. For context, some H100 chips have sold for as much as $40,000 on eBay! While the video isn't investment advice, I believe Nvidia will continue to perform well due to the scale of the AI revolution, and frankly because they're also an excellent company. However, because I think that competitors will gradually erode Nvidia's moat and dominance in both hardware and software, I expect the company's market share in AI accelerators and profit margins to decline over time. I agree with you though that the numbers are becoming absolutely insane, and some people are being overly exuberant.
I wouldn't say that they have a bad product, maybe it's fairer to say that they have a more generalised product? Whereas Google's TPU is much more specialised (as an example).
Nvidia: A Classic Case of Linear Extrapolation
The reason people pile into financial manias near tops is that they think the trend will never end. Last month, an Nvidia spokesman announced that the mania for stocks of companies that make chips to run AI is "just at the beginning." Look at the chart. Wouldn't that statement have been brilliant had it been made in 2015? But no, we heard it after Nvidia had risen nearly 600,000% to a value of $3.4 trillion, which is more than the value of Apple, more than Microsoft, more than the entire stock market of France, more than the entire stock market of the U.K., and more than 12% of the U.S. GDP for 2023, and after the head of the company became such a celebrity that he is called "the Taylor Swift of tech." But hey, it's just getting started.
Linear Extrapolation is a good term to use!
Nvidia's forward P/E ratio is currently lower than it was in early 2022. However, it's crucial to remember that these earnings are projected, not guaranteed. If Nvidia continues to surpass analysts' expectations for both revenue and profit, it's reasonable to expect the stock's remarkable growth to persist (barring any major macroeconomic setbacks).
In the video, I argue that competition is on the horizon, primarily from big tech companies, who as a matter of fact, are also Nvidia's biggest customers (by far). Additionally, startups like Groq and traditional rivals such as Intel and AMD are entering the fray. I believe this competition will impact both Nvidia's sales volume (currently constrained by supply) and pricing power. For context, some H100 chips have sold for as much as $40,000 on eBay!
While the video isn't investment advice, I believe Nvidia will continue to perform well due to the scale of the AI revolution, and frankly because they're also an excellent company. However, because I think that competitors will gradually erode Nvidia's moat and dominance in both hardware and software, I expect the company's market share in AI accelerators and profit margins to decline over time.
I agree with you though that the numbers are becoming absolutely insane, and some people are being overly exuberant.
They have so bad product. Any ASIC can beat these garbage chips by efficiency hundreds of times. So-so bad and power hungry crappy design
I wouldn't say that they have a bad product, maybe it's fairer to say that they have a more generalised product? Whereas Google's TPU is much more specialised (as an example).