NVDA is not a bubble! Wake up and learn valuation modeling
Let’s take the example of AAPL the 2nd most valuable company in the World. AAPL’s net income TTM is around $97B (25%) and it sports a forward P/E of 28. Remember this is a company which had 4 quarters of revenue declines till recent quarter. NVDA has net income margin of 55%, forward P/E of 35-40, having double digit revenue and EPS growth. NVDA will likely post ~70B in net income in the next 4 quarters. NVDA has forecasted $24B in revenues next quarter (Jensen will definitely beat that). Given NVDA is growing its revenue and net income by double digits while AAPL has been declining while sporting a roughly 30 P/E is insane. NVDA will eclipse $97B of net income within 2 years at a 15% growth rate (quite conservative). NVDA is quite cheap given AAPL’s valuation and will become the most valuable company in the World. My position: 30% of Kid’s trust fund ($1.8M) in NVDA stocks and their derivatives. #stocks #investments
At the peak after the pandemic, people were saying stocks were not overvalued because the interest rate was low.
even when stocks were down a lot of people said it would get worse or take 5 years to recover.
What I meant is people frequently justify valuations based on certain conditions when said conditions are aberrations of history!
None of this matters, if a stock goes high enough, people will take profits, its all emotions.
Correct if you live before mid 1900s.
What if tomorrow google says that they have been hoarding nvidia chips so meta doesn’t get them and meta says they have been hoarding chips so google doesn’t get them, and neither needs that many?
Damn, 30% is "only" 1.8m
TLDR I bought a bunch of nvidia now please do the needful.
Check my post history. I bought it long back. Don’t need the poor chaps here to hold my bags..
What tipped you off to buy it
GPU spending will not continue at this rate. So yes, it is a bubble.
The bubble has to pop fairly soon if you are short else you will lose your pants.
I know the market can remain irrational longer than I can stay solvent. I'm content to observe on the sidelines for this one.
Disagree. Never compare two companies from different sectors. Always refer to benchmark PE for the sector and then calculate the price. I would compare nvda based on semiconductor sector multiple which on avh is 35.5. So currently looking NVDA’s forward earnings for 2024, price should be maximum $785 However using PE is not a reliable model. Best is DCF
Genius! Bottom line for all stocks is revenue growth, EPS growth and net income margin. Doesn’t matter what sector..
Thats why idiots like you come back here and cry they lost everything in stocks. Sustainability also matter. Add to your dictionary. sector matters when doing PE valuations.
A major factor is how confident investors are that profits and revenue will continue 10 years from now. Apple is probably easier to predict
Why are you using 10 year timeframe? In 18 months it will achieve net income levels of AAPL..
Because a 25 pe (assuming no growth) means that your investment will be paid back in 25 years. If people aren’t confident that the profits will reliably come, then that will decrease P/E ratio
What are NVDA’s derivatives?
Options most likely.
SMCI .. lol 😂