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Comment by adventured | Hacker News Reader

And Tesla is currently worth more than these combined: BMW + GM + Ford + Mercedes + Hyundai + Nissan + Fiat Chrysler + Honda

You know, just a trillion dollars in sales give or take. I'm sure Tesla will get there sometime this century.

Intel has $25 billion in operating income the last four quarters (~73% increase in three years). nVidia has $3.4 billion in operating income the last four quarters. Yeah but nVidia is growing fast, right? Nope, they're growing modestly. How long will it take for nVidia to get to $25b in operating income? 15 years if everything goes perfectly?

It's certainly up to the reader to judge whether these spectacular valuations are due to the stock market bubble, or if... you know... it's different this time, it's the new economy, cloud!, or whatever bullshit is being spun this time around.

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Intel is quite unconvincing on a lot of key aspects (10nm, 7nm, performance after spectre family mitigations, etc) but to me the biggest danger is their inability to commit and persist on pretty much any topic which isn't their mainstream CPU line.

They sold Xscale, they sold their modem division (admittedly it was terrible, but I refuse to believe it was unfixable, certainly Apple didn't).

This creates hesitation in prospective customers of anything which isn't their mainstream CPU business, reducing them to a one trick pony. And that pony is now having its lunch eaten from both below (ARM) and above (Epyc).

Their operating profit and their reserves mean little if prices go down - they are used to fat, lofty margins and I'm not sure they still know how to execute without them.

Think about what happens to the shale oil businesses once crude prices approach their extraction costs. You implode very quickly no matter how big you are.

Great summary.

And Intel's cost of business is incredibly high. Semiconductor fabs are some of the most expensive factories in the world.

Intel is in danger of becoming General Motors, a company that sat by idly while competitors made them obsolete.

The stock price only reflects the supply and demand of a company’s stock. A lot of people want to have nvidias and Tesla stock, so their price is higher.

The problem is all those people writing financial pornography about the stock market. That can give you the impression that there is more to the stock price than that.

The fundamental value of a stock is the net present value of future cashflows that stock entitles you to. Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money.

> Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money.

Not if they sell it to someone else for a higher price.

Someone will lose money, but you can't rely on Softbank throwing another billion dollars down a hole every time you've a tech disappointment to unload.

well to be fair that hole can be metaphorically filled by involving Greensill to help with some creative accounting!

Nowadays the fundamental value of a stock is more what you can convince others to pay for it.

That's not fundamental, its superficial and the people playing that game are in for a correction.

Unless the stock pays a dividend (and a lot of stocks have never paid one), their cashflow never end up in your wallet as a shareholder. Thus the only value you will get is the amount someone else will pay for your stock.

Sure they need some cashflow (after all, nobody wants to buy a bankrupt company) but to believe the stock value is a straightforward formula based on cashflows isn’t how the market works. Otherwise Amazon would have plummeted in price long ago.

Buybacks. The other (and more efficient) method to return capital to shareholders is via buybacks, where the company literally hands you cash in exchange for your shares.

That is true though again, not every company does buybacks.

A company might not do a dividends or buybacks now, but if they are successful they are likely to do so eventually, and that expectancy is worth something just the same.

Several of those manufactures that you listed are on the verge of bankruptcy (Ford, Nissan, FCA). Auto manufacturing is capital-intensive and extremely high risk and a few bad quarters is all it takes to completely wipe out shareholders. You may not realize this, but GM actually went bankrupt in 09 and shareholders lots everything.

Telsa is not going to go bankrupt in the near- or medium-term. There's just too damn much money backing them.

Tesla is also able to have almost positive cash flow on high margin high demand cars in the middle of a pandemic. The other automakers are leaking money like there is no tomorrow.

Ford, GM, FCA have a thin wedge of the market that is still profitable for them and that market is under attack, with little indication of them being able to make a huge splash in another market. Not to mention a broader shift in car market and transportation that requires massive investment.

If you don't grow, don't make much profit and are risky, meaning a couple of bad quarters almost kill you your stock is not gone be worth much.

Well, Intel income can also go down fast, and that's probably the main reason we see the stock price going down.

Really?

As far as i know intel has/had plenty of reserves and is still selling good.

The Demand in general is very high.

Doyou have any numbers?

In the year after the iPhone was announced, blackberry stock tripled to 140 dollars a share. They had record profits and revenue.

It’s currently $4.

You can be a dead man walking even while your financials are fine.

The same could be said of nvidia. I don’t think their future is assured by any means.

Nothing is assured, but if you were going to bet, intel’s future seems a lot cloudier. Where do they get growth from?

>In the year after the iPhone was announced...

The iPhone was a one-in-a-generation product that upended an industry. Yet I see 10 products being compared to it a week.

It may sound cynical to people here, but in the long-run, you'll do a lot better thinking "this is probably not the next iPhone" than having FOMO that every second tech company might be the next Apple.

I’m just using it as an example of an incumbent being disrupted. It takes a few years to show up in the bottom line.

Two fronts with big challenges: Losing Appple as a customer AMD already stealing market share on desktop, mobile, and server, with lots of improvements on the way in the short term. (smaller transistors, better memory controllers) While intel has really nothing in the pipeline.

That's why sometimes I wonder if the overlap of "tech" and "stock market" is bad.

One deals with concrete things, other deals with speculation.

These valuations are references of the stock market - it's almost a measure of popularity, than anything else. Right?

The overlap of tech and speculation is called "science fiction."

"Cloud!" made my day! I could totally see this in on a new-age advertising page on a new X as a service website lol

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