| Their market cap is 2.2T $. In the past year, they had a revenue of 60B $ and net income of 30B $. Absolutely amazing numbers, I agree. The year before they had a revenue of 30B $ and a net income of 4.5B $ - and it was a rather good year. What happens next of course depend of how you judge the situation - was it a peak hype demand ? Will it stabilize now ? Grow at current extraordinary rates ? Scenario 1 - margins get back to normal due to hype going down, competition improving etc - in this case the company is worth at best ~200B $ - or 1/10 of what it is now. Scenario 2 - they maintain current revenue and the exceptional margins - the company would be worth ~1T - or 1/2 of what it is now. Scenario 3 - they current growth rate (based on past 12 months) continue for ~5 years. This is the case the company is worth ~2T $. But they are in a business where most money come from a handful of customers, all of which are working on similar chips - and given the sums in play now, the incentives are *very* strong. My opinion, is that the company is already priced for perfection - basically the current price reflects the perfect scenario. I struggle to see any upside, unless we have AGI in the next 5 years and it decides it can only run on Nvidia chips. All of this is akin to Tesla in the past years. They grew from a small startup to a medium car maker - the % growth rate was huge of course - an amazing achievement in itself. But people projected that the % growth rate would continue - and the stock was priced accordingly. Reality is catching up on Tesla, even if some projections are still absolutely crazy. |