[digitcatphd]

The biggest issue with Nvidia is their revenue is not recurring but the market is treating their stock as it were, which is correlated with all semi stocks, with a one-time massive CAPEX investment lasting 1-2 years.

Simple as this - as to why its just not possible for this to continue.

[xadhominemx]

NVDA stock does not trade at a huge multiple. Only 25x EPS despite very rapid top line growth and a dominant position at the eve of possibly the most important technology transition in the history of humankind. The market is (and has been) pricing in a slowdown.

[JumpinJack_Cash]

> > the eve of possibly the most important technology transition in the history of humankind.

Funnily enough when you spend some months thinking into this intensively the result is that a monetary investment into the company that will bring about the singularity / AGI is the most irrational thing one can do.

If the enterprise is successful and the singularity/AGI is benign you won't need money anymore, if the experiment fail the possibility of things going rogue is very high, or even the panic from a possible series of rogue events.

So for the first time the rational thing would be to either spend those money to learn poker/chess/videogames or whatever game we will play with each other to feel cool while the AI takes care of everything else, or maybe outright spend money on coke and strippers given the chance of doomsday.

[xadhominemx]

They are doing it for the love of the game, IMO

[digitcatphd]

What do you think is going to happen to their earnings when CAPEX slows?

[xadhominemx]

Their earnings will certainly decline or at least decelerate if capex slows. I’m just saying, if the market wasn’t pricing in a slowdown, NVDA would be trading at 40-60x next year EPS, not 25x.

[Printerisreal]

most important technology transition in the history of humankind but Nvidia itself is not leading the software part? Are they selling shovels or why would they give that part of being the head develop the AGI and GOD?

[baobun]

> most important technology transition in the history of humankind

Get real.

Farming? Plow? Steam engine? Combustion engine? Electricity? Air conditioning? Computers? Internet?

[xnx]

Creating a true digital brain would be humankind's greatest (last?) invention.

[justsid]

By what metric? In my opinion actually solving all of the problems we currently have and man we have a lot of them past the obvious ones like climate change, that would be our greatest achievement.

[xnx]

The optimistic thinking is that with thousands/millions of tireless 24/7 brains at work on these problems we could address more problems in biology, chemistry, physics, materials science, etc. faster. It's a bold, but not unreasonable belief.

[xadhominemx]

They just committed to invest $100b (!) in OpenAI and said $100b is only the start.

[SiempreViernes]

Since you aren't talking about the green transition, whatever technology transition you have in mind is obviously second most important at best.

[xadhominemx]

If we get ASI it will figure out how to do the green transition for us!

[popol12]

This is peak techno-solutionism

[xadhominemx]

If we are not headed to ASI, the spending will slow down and the problem will solve itself.

[swexbe]

What are you talking about? It's trading at 55x EPS and 41x forward EPS.

[xadhominemx]

Consensus EPS for FY27 (~CY26) is $6.40. Buy side is higher!

[foobarqux]

That's 30x for earnings that will be known Jan 2027 (1 year and 3 months away). It's 40x earnings for Jan 2026 (3 months away).

For reference Enron was 40x earnings for current year forward estimates early in the year of the crash.

[bwfan123]

Same could be said of the covid-darlings - zoom, pelaton etc. They got bid up assuming the present to continue into the future. That is the nature of the markets. Same story with fake meat companies. Across time you will find this pattern - 3d printing etc, all ushering some new faddish technology. Also, explains the investments into openai as a hedge against capex slowdown, so there is a captive customer.

[Workaccount2]

I'm pretty sure Nvidia sells out all their cards instantly once they are announced.

Their margin is ridiculous and they are still unable to meet demand.

[JCM9]

This. It’s basic economics. The second there’s a blip the market will be flooded with cheap used GPUs and there will be zero reason to buy new ones. At that point it will be impossible for NVidia to sustain their revenue numbers.

[cyanydeez]

TSLA is the same. Tge market is basically a new rich persons bank, abstracted by loans and lines of credit.

Obviously its a bubble but thats meaningless for anyone but the richest to manage.

The rest of us are just ants.