I believe AI isn't just a passing trend; it's going to revolutionize the world. The technology we've developed so far has specific functions, but AI can learn and innovate beyond our current understanding. To manage their large and complex models, AI companies need powerful computational chips, like those from Nvidia. Nvidia has invested heavily in their AI chips, and it's starting to pay off, which is why their stock price has soared to $788 💹 However, there's a challenge with balancing revenue against market capitalization, which has hit $2 trillion 😧. This valuation hinges on how quickly the market adopts AI. If adoption is swift, it's good for stock prices. But if it's slow, we could see a bubble burst. Many companies will likely bet on AI in the coming months to capitalize on this technology. On the other hand, The growth of AI is delicate; if not managed well, it could negatively affect market sentiment, especially if jobs are lost, impacting AI's growth trajectory. Secondly, OpenAI is leading a revolution with this technology, aiming to hold a powerful position. However, they seem reluctant to share this power with companies like Nvidia, despite relying on them for chip manufacturing. Thats why many companies have started inhouse development of these chips, potentially affecting Nvidia's growth. Thirdly, Nvidia also depends on TSMC for manufacturing these chips, which could be a problem if tensions between China and the USA escalate, affecting the supply chain. Despite these challenges, Nvidia is in a strong position because of their early bet on AI and the ecosystem they've built, like CUDA, making it difficult for competitors to catch up
It is the shortage not the AI that boosts the stock prices
If AI finds cure for cancer then I will believe it otherwise it’s just some hype ( long or short term, nobody even ai can’t calculate when will it burst. Remember it’s driven by emotion and ai is blind to it therefore)
Yeah AI needs to solve problems beyond human power otherwise evevry other use case seems trivial.
But Tesla stock did stop going up, and infact it came down.. look none of us know, so just STFU..
So was the internet, computer security etc. look what happened at those stocks.
I would be more worried about bubble bursts of other FAANGs. For example, Google has 300B revenue, and 90% comes from ads. That's fragile and can be easily disrupted by other FAANGs or startups.
Tc? YOE? Location?
I don't believe the current rate of growth is sustainable, in the short-medium term at least. Demand will wane and competition will continue to increase. I think NVIDIA has a bright future as a company, but today's valuation is based too much on hype and inflated metrics.
I agree.
But I heard exactly the same thing when stock price is $300, and now it’s $700+. Maybe you can say that again when stock price is $1400, just like Tesla stock a few years ago.