Investors get frantic about chasing investment profits and this sort of disconnection between share price and core company value happens as a result. But yes, agreed, humans as a collective are idiots and as individuals are even worse.
Agreed. But it's an opportunity for Nvidia, if their management is willing to take it. They should either buy Intel or, if regulators won't allow it, get as close to buying them as they can get away with. It is *much* harder to fab chips using cutting edge processes than it is to design chips and there's going to be a shortage of foundry capacity for a long time. Intel is vastly undervalued right now (although I get why investors are cautious), and an all stock deal from Nvidia to either buy Intel outright or to acquire some major 'first in line' status for foundry capacity for a long time could make a lot of sense. Nvidia could give Intel $100 billion worth of Nvidia stock, it would be a boon for Intel, and no skin off Nvidia's nose.
Go to Wikipedia and look at the list of companies by yearly revenues and currently Nvidia is not even in the top 50 there and Walmart is the top there and Amazon is number 3 with Apple at number 9 for yearly revenues! and that Table can be sorted by Profits with Apple at number 2 and $99.883 Billion in profits on that list behind Saudi Aramco at $159.069 billion in profits. Microsoft is number 30 on the revenues list While Alphabet is number 18.
And so it's Market Cap vursus Revenues and Profits as to what makes any company more valuable than just market Cap alone. I guess the market Expects that Nvidia's revenues will just keep increasing in the longer term to justify that Market Cap but who Knows for sure.
We'll see how long this AI bubble lasts, but nvidia survived the dot-com bubble because they have an actual product. And just like last time, nvidia still moves a real product that can be used for more than AI.
I don't think anybody's questioning their survival, only the valuation. I'm sure they'll survive. But people who put their life savings into buying Nvidia at these prices might not.
The thing that is going to drive Nvidia's profits and valuation down is companies like Apple, Microsoft, Google, and Amazon all designing their own AI chips, which they put in their data centers in massive numbers, and then rent out to others through their various business models. Nvidia is going to get squeezed big time by those guys. It's absolutely inevitable -- no way out.
Again, Nvidia won't go out of business, but they will face a lot of competition that will drive profits and stock price back down to earth.
Let's also not forget that nvidia is far more diverse now, that it ever has been, with key purchase of Mellanox and the assorted software developers they've scooped up. They are in a great place to push through the AI bubble and survive. Only time will tell us how well.
I don't know where this ends because the fact is, from an investor perspective, they have no competition in the short term. The only thing that could really tank them now is a disaster in Taiwan.
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Terry_Craig - Tuesday, June 18, 2024 - link
Human stupidity has no limits.ballsystemlord - Tuesday, June 18, 2024 - link
Now if only we could convince humans to use their brains.(Instead of, for example, relying on an AI.)
Railander - Wednesday, June 26, 2024 - link
why don't you start with your own?PeachNCream - Wednesday, June 19, 2024 - link
Investors get frantic about chasing investment profits and this sort of disconnection between share price and core company value happens as a result. But yes, agreed, humans as a collective are idiots and as individuals are even worse.GeoffreyA - Wednesday, June 19, 2024 - link
We need Service Pack 1 to be rolled out to the species.boozed - Wednesday, June 19, 2024 - link
Definitely not a bubble. No sir.ZoZo - Tuesday, June 18, 2024 - link
Apple and Microsoft are switched in the table. Microsoft is second at $3.317T.Ryan Smith - Tuesday, June 18, 2024 - link
Thanks!hallstein - Tuesday, June 18, 2024 - link
Absolute insanity.Blastdoor - Wednesday, June 19, 2024 - link
Agreed. But it's an opportunity for Nvidia, if their management is willing to take it. They should either buy Intel or, if regulators won't allow it, get as close to buying them as they can get away with. It is *much* harder to fab chips using cutting edge processes than it is to design chips and there's going to be a shortage of foundry capacity for a long time. Intel is vastly undervalued right now (although I get why investors are cautious), and an all stock deal from Nvidia to either buy Intel outright or to acquire some major 'first in line' status for foundry capacity for a long time could make a lot of sense. Nvidia could give Intel $100 billion worth of Nvidia stock, it would be a boon for Intel, and no skin off Nvidia's nose.FWhitTrampoline - Tuesday, June 18, 2024 - link
Go to Wikipedia and look at the list of companies by yearly revenues and currently Nvidia is not even in the top 50 there and Walmart is the top there and Amazon is number 3 with Apple at number 9 for yearly revenues! and that Table can be sorted by Profits with Apple at number 2 and $99.883 Billion in profits on that list behind Saudi Aramco at $159.069 billion in profits. Microsoft is number 30 on the revenues list While Alphabet is number 18.And so it's Market Cap vursus Revenues and Profits as to what makes any company more valuable than just market Cap alone. I guess the market Expects that Nvidia's revenues will just keep increasing in the longer term to justify that Market Cap but who Knows for sure.
Threska - Tuesday, June 18, 2024 - link
Depends upon how long the AI bubble lasts.meacupla - Wednesday, June 19, 2024 - link
We'll see how long this AI bubble lasts, but nvidia survived the dot-com bubble because they have an actual product.And just like last time, nvidia still moves a real product that can be used for more than AI.
Blastdoor - Wednesday, June 19, 2024 - link
I don't think anybody's questioning their survival, only the valuation. I'm sure they'll survive. But people who put their life savings into buying Nvidia at these prices might not.The thing that is going to drive Nvidia's profits and valuation down is companies like Apple, Microsoft, Google, and Amazon all designing their own AI chips, which they put in their data centers in massive numbers, and then rent out to others through their various business models. Nvidia is going to get squeezed big time by those guys. It's absolutely inevitable -- no way out.
Again, Nvidia won't go out of business, but they will face a lot of competition that will drive profits and stock price back down to earth.
HaninAT - Wednesday, June 19, 2024 - link
Let's also not forget that nvidia is far more diverse now, that it ever has been, with key purchase of Mellanox and the assorted software developers they've scooped up. They are in a great place to push through the AI bubble and survive. Only time will tell us how well.Samus - Wednesday, June 19, 2024 - link
I don't know where this ends because the fact is, from an investor perspective, they have no competition in the short term. The only thing that could really tank them now is a disaster in Taiwan.Shlong - Tuesday, June 25, 2024 - link
I regret not investing in Nvidia but I did invest in Carvana when it was trading at $4 and kept it till now ($128).