Tuesday, May 30th 2023
NVIDIA's Value Now Exceeds $1 Trillion
NVIDIA has recently joined an elite bunch of publicly listed USA companies with valuations of $1 trillion (or more) - Team Green's share price moved beyond $412 today (May 30), having climbed by more than 30% over the past week. The company's stock value has been reported to have tripled in the span of eight months - this performance surprised a certain subset of financial analysts - having predicted (earlier this year) an overall industry downturn in demand for enterprise hardware. Back in April HSBC raised their recommendation on Nvidia stock to "Buy," the cited reason being an increased uptake of AI processing platforms.
NVIDIA's overall revenue growth was flat in 2022 with profits halved - this led to slightly reduced wages for parts of the executive team (most notably CEO Jensen Huang), but the multinational technology company's fortunes are set to turn around significantly over the course of this current financial year (2023-2024). Intel and AMD are slowly catching up with the market leader in the field of AI processing, with the development of rival technology. It will be interesting to see whether demand for NVIDIA AI GPUs will continue to grow, when alternative products hit the market.
Sources:
Reuters, VideoCardz, Ebay (Image Source), BBC News
NVIDIA's overall revenue growth was flat in 2022 with profits halved - this led to slightly reduced wages for parts of the executive team (most notably CEO Jensen Huang), but the multinational technology company's fortunes are set to turn around significantly over the course of this current financial year (2023-2024). Intel and AMD are slowly catching up with the market leader in the field of AI processing, with the development of rival technology. It will be interesting to see whether demand for NVIDIA AI GPUs will continue to grow, when alternative products hit the market.
58 Comments on NVIDIA's Value Now Exceeds $1 Trillion
I get that PE ratio is just a metric. But its one of the better metrics I've heard of. We're only buying these companies because they make money (ie: buying shares means buying votes + a slice of the dividends of these companies). Or... because we expect them to make money "some time in the future". NVidia made plenty of money during a year when everyone else is losing money (or making less money). But the stock price skyrocketed far in excess from what is reasonable.
AMD is also a meme-stock, IMO. It may have a solid business model, but PE of 600+ (albeit from an unfortunate decline this year) is silly. Even last year, when revenues were good, AMD never had a good PE ratio. I think people will be disappointed that the promised 5x to 10x growth doesn't occur with these companies.
I mean, one of these meme stocks will grow 500% for reals. But not all of them will. In fact, most will stay roughly the same size, and maybe just as many will go go bankrupt (see BBBY for a recent meme stock example of bankruptcy).
Anyway, I've been wondering if the company's value can be described as Huang's Law based on Jensen's arguably apparent ambition.
Because these are legitimate businesses at the end of the day, albeit not all that "consumer friendly" as they probably could be!
Meanwhile, companies are tethered to the real world and eventually go either bankrupt, or issue a dividend (when they finally run out of ideas of how to make more money). When companies start handing out free money 5, 10, 20 years from now, people are going to be happy to be holding onto their tickets for a slice of that free money.
If you're trading stocks and have forgotten about how dividends work (literally a promised slice of the profits), or how bankruptcy works (ie: the bondholders liquidate the company, equity holders go to $0), you're in for a surprise when these things happen. The stock price varies wildly because in practice, people forget that these things are real-world entities with real-world consequences however. But eventually reality always settles in.
If its a growth company, having a vote for the board to decide upon the corporate strategy and corporate politics is hugely valuable. Maybe not to the passive investor, but to the active investors who attend meetings and such. Even if the company isn't issuing a dividend yet, the vote has value to steer the company in a direction. Later, in bigger companies where there's so many votes that its nearly impossible to be an activist investor... those bigger companies tend to issue dividends and offer a guaranteed slice of profits.
What he should have said was: "the lower the MSRP, the more we sell, and you save"
For all the people who hate Nvidia....and their success...
TOUGH COOKIES.
£120 Ryzen 5600
£200 RX 6600
Cheapy cheapers!!
Problem is some or most game "performance enthusiasts" don't want console level performance... we've been spending way more to overcome skimped graphics and have travelled far and wide to adopt higher resolution panels to get the best visually stunning quality available. I still count my blessings not having upgraded to 4K from 1440p.... probably the best decision i've made! At 1440p on ULTRA settings in a couple of games i play (or will play in the long run), the 6600 won't cut it (not even close). But it is a good budget card for the right setting (subjective)
I've reached a stage in my life when building a PC, any kind of PC, brings me more happiness than having the fastest parts in the world. "More hardware is better than fast hardware" is my motto now. :ohwell:
Cpu remain decently priced due to better competition. Nvidia still doesn't view AMD as anything other than a minor nuisance regardless of whether that is justified and amd is just happy being a slightly better value in the gpu market. RDNA2 being cheap isn't because amd wants it to be cheap it's mostly that nobody would buy it in 2023 otherwise.