[eightysixfour]

> foreseeable future

I think this is the arguable part. The more AI compute becomes valuable, the more reason there is to divest from their software moat. Their hardware is good, but not unassailable. I think their modest (by tech hype standards) P/E is recognition of this.

[ein0p]

While I agree with you in theory, the practice of this has been somewhat less optimistic. So far AMD hardware _doesn't even work_. That's why Geohot had to write his own stack. Moreover, it also doesn't sell - there's maybe one or two obscure cloud providers for it. No major cloud provider has it, or is going to have it anytime soon, until software and driver problems are figured out. Why? Simple - they have no interest whatsoever in disappointing their customers and/or spending all of their support engineering time on supporting obscure GPUs that they'll have to charge less for in order for them to see uptake at all. Even Intel (!) has a more robust offering with Gaudi 2/3, and they're having a heck of a time getting large deployments anywhere outside Intel Developer Cloud.

[baal80spam]

But they are making strides in robotics already. Jensen is super smart, business-savvy AND hard-working. These are some of many reasons I own NVDA.

[itsoktocry]

>Jensen is super smart, business-savvy AND hard-working

Those traits are table stakes for running a Fortune 50 company. Before 2019 when the AI boom came out of nowhere, what was going on? Nvidia was an okay company, but not a real over-performer.

[Jlagreen]

What are you talking about?

Nvidia has been a high margin and great performing business for the last decade. Nvidia had better gross margins than apple by selling gaming GPUs only 10 years ago and that's in a market where you can easily exchange the card in a PCIe slot.

From 2015 till 2022, Nvidia had several years with 50-60% revenue growth. People only look at the recent 2 years and think that Nvidia was "OK" before but I'm invested since 2016 because Nvidia started the growth turbo back in 2014/2015.

Jensen decided decades ago that Nvidia is premium and he positions the company in that position. What many don't get, Apple has only 25% unit share but 75% profit share. So Apple basically concentrates the profit of the Smartphone business. Nvidia will do the same. They had better gross margins a decade ago than AMD has today. AMD might gain unit share but will never gain Nvidia's margins because AMD is a market follower and will never be able to set pricing unlike Nvidia with premium solutions.

Jensen also made CUDA possible. Intel on the other hand killed such projects and also their first GPU project. Intel also didn't invest in OpenAI and so on. Jensen is by far the best CEO and fortunately he doesn't get crazy like Musk does.

[eightysixfour]

Honestly, I'm having a hard time with my sarcasm detector here. Plenty of others working on robots. Plenty of smart, business savvy, hard working CEOs that didn't win the next round of the infinite game.

I like nvidia, I think they're doing good work, but I don't think their current trajectory is some sort of well-moated flywheel the way some others think it is. Selling shovels during a gold rush can make you rich, it doesn't mean you'll still be selling shovels in 100 years.

[littlestymaar]

> Selling shovels during a gold rush can make you rich, it doesn't mean you'll still be selling shovels in 100 years.

This is the best way to put it, it's exactly this.

[rapsey]

They modest P/E ratio is a consequence of growing their earnings so much.

[georgeecollins]

And also there is some recognition that its going to get really hard to grow them as much proportionately. AMD could increase its earnings a lot pretty quickly, but its hard for NVIDIA to grow like that for the same reasons it is hard for Apple to grow. You are already getting so many of the $ available to spend in that area.

[eightysixfour]

And yet, when other companies have grown their earnings like mad, their price has outgrown it, driving their P/E up further, because the market expects higher future earnings. nvidia is reaping the rewards of the things built up to now, but isn't necessarily expected to continue to hockey stick.

Their P/E is approximately the same as the rest of the S&P 500 technology sector's average.