[sottol]

NVDA's market cap was already 12.5% of the entire yearly US-GDP, at a P/E of 10 or 20 once their growth slows to me that implies that their profits are expected to be 0.5-1% of the US GDP. Just nvda alone, not the LLM foundation models + application layers and so on built on top their hardware.

Even in the most optimistic case, I find it hard to imagine that nvidia alone captures much more than 1% of the US GDP as profits for the next 20 years or whatever their investor's horizon is.

[AlotOfReading]

Nvidia's P/E numbers are lower than almost all of their major competitors. You can't look at Nvidia's ratio alone and say "this seems overvalued" without also acknowledging the fact that the entire industry looks ridiculous by the same analysis.

I'd even agree with that argument, I just don't think it's the one you're making.

[sottol]

I think we agree - my response was narrowed to respond to "NVDA is going to soar". The whole segment looks overvalued and the implication (at least to me) seems to be that AI will capture 10-20% of GDP in profits (not even revenue) starting soon for 10-ish years.

I don't have the numbers, but I wonder how "internet company" (very loosely) profits compare to GDP - I could imagine the AI ecosystem reaching similar profits eventually.

Btw, imo their P/E is mostly this good because they're currently selling hardware at margins better than many software companies, I doub that this will/can last. For example, when FB/MS each are spending $50B+/a on GPUs, can they justify say $100M/a on a crack software dev team to make their stack work on other GPUs (ie replace the oft-argued CUDA moat within a year or two)?