For leadership, for foresight, for execution, Jensen Huang is up there first equal with the GOAT, Steve Jobs.
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Here is what Perplexity AI thinks of Nividia. Perplexity AI is a search engine which unlike ChatGPT gives you the references. https://www.perplexity.ai/ Cathie Wood thinks it is too expensive.
How much would Nividia need to earn to justify current share price?
Answer
To justify the current share price of Nvidia, the company's sales growth must be at least 50% compounding and the adjusted operating margin must be at least 42.5% in perpetuity 1.
However, there are differing opinions on whether Nvidia's valuation can be justified.
Some investors believe that Nvidia's current market price appears expensive compared to its intrinsic value, making it a potential sell 1.
The greatest source of uncertainty in Nvidia's valuation is the expected revenue growth, with a growth rate of 28% ± 5% accounting for 75% of the spread in the valuation 1.
To justify the current share price, sales revenue must almost be double the estimate, which would mean Nvidia's sales revenue in 10 years' time would be approximately $644 billion 1.
On the other hand, Nvidia's stock currently trades for 204 times the company's earnings per share, which is lower than Amazon's multiple of 296 3.
However, some investors are skeptical about whether Nvidia's revenue and profits justify its valuation 6.
Analysts believe that Nvidia's revenue will be $113 billion in 2030, resulting in a PE multiple of over 10x, which is considered high 6.
In summary, to justify the current share price of Nvidia, the company would need to achieve significant sales growth and maintain a high operating margin. However, there are differing opinions on whether Nvidia's valuation can be justified based on its expected revenue growth and earnings multiples.
https://seekingalpha.com/article/461...amentals-again 1
https://www.fool.com/investing/2023/...-stock-before/ 2
https://www.cnbc.com/2023/06/09/nvid...investing.html 3
https://fortune.com/2023/05/25/nvidi...t-cap-outlook/ 4
https://www.afr.com/markets/equity-m...0230609-p5df9b 5
https://www.investorsobserver.com/ne...36390363537278 6
Nice write-up, Perplexity! :-)
My issue with its logic is we're at the beginning of the beginning of A.I. and Nvidia literally cannot get their chips made fast enough for the demand. Any quarter where they cannot make revenue due to a chip shortage gets piled on top for the next quarter! It's the best business in the world right now.
https://www.macrotrends.net/1316/us-...mployment-rate
U.S. National Unemployment Rate.
The employment rate is a lagging indicator. Unemployment is usually low and doesn’t spike until the recession actually hits as the chart shows.
The HOPE Framework, and employment as a lagging indicator.
One framework that has proven to be an effective crystal ball in predicting the impact of rising interest rates is the HOPE framework, developed by renowned economist Michael Kantrowitz. HOPE, an acronym for Housing, Orders, Profits, and Employment, provides valuable insights into the sequence of events that typically unfold during economic downturns.
The HOPE framework emphasizes the interconnectedness of various sectors in the economy and their response to rising interest rates. It begins with housing, which typically peaks first, followed by new orders, then companies' profits, and finally employment. By closely monitoring these indicators, economists can gain a better understanding of the overall health of the economy and anticipate potential risks.
https://www.linkedin.com/pulse/navig...-kamlesh-dixit