Anyone who is a lot more versed in company valuation methodology see this as being near peak value, or does Nvidia have a lot more room to run?
Nvidia has had a watershed moment of revenue growth, because they're the only significant player in the space of top-of-the-line GPUs for training LLMs.
Their current valuation bakes in the assumption that not only is this unprecedented level of pricing power durable, but that top line revenue will also grow significantly over the next few years.
Reminder that Nvidia is selling chips, mostly to datacenters, whose purchasing habits are primarily driven by "customer" demand (where customers are, in this case, tech companies wanting to train neural nets).
So a bet that they go up from here is a bet that datacenters will want at least as many chips in the next N continuous quarters, and will be willing to pay the current premium that Nvidia is charging, today. The corollary is you're betting that "customer demand" for ever-improving GPUs is climbing an incredibly upwards, secular (read: permanent, non-cyclical) trajectory, such that it outpaces the assumptions of these already-lofty expectations.
I think betray my own opinion, but the price is what it is. :)
To make a flawed analogy, but if people want oil (AI), NVDA sells drills (means of AI production). Demand for each is obviously correlated, but the profile of demand for the two products is really different.
But that's still a high valuation - that is even if that new market grows to the sky, it's not clear that it can justify that new valuation.
Is Nvidia failing anytime soon? No. Is it the best investment you can find? That's harder to tell which is why the complaint of "very high valuation already". It's not in doubt that it's a great business. It's less easy to decide whether it's a great investment to get in right now.
But everything is relative a PE around 40-60 is NOT historically crazy high for the verge of a giant new market. And yet it is very high for a trillion dollar market cap. This is exciting: a trillion dollar market cap at the verge of a giant new market!
If you want the responsible advice, it's overpriced. If you want my personal advice, well I bought more yesterday afternoon.
Its not overpriced anymore. In fact if there's anything left in the tank or this is at all sustained it's cheap.
I already saw a few posts here on HN from companies that threw down insane amounts of $$ on H100s and are now looking to rent out their excess capacity. I'm guessing we'll be seeing a lot more posts like that soon.
Now it's just crazy.
Crypto and blockchain never had an actual proved out use case. There was an interesting idea but no one ever could figure out a way it was useful. The costs associated were much higher than the risks of not using it.
People who think this is a meme aren’t paying attention, and they’re certainly not in the rooms of power where AI planning is happening at megacorps. I’ve been in them, and it’s serious and material and we are just now beginning to scratch the surface.
How we prove it's one is probably another matter.
8% is close to nothing in stocks. Biotech stocks go up and down more than that without earnings announcements.
> Anyone who is a lot more versed in company valuation methodology see this as being near peak value, or does Nvidia have a lot more room to run?
As long as fine-tuning, training or even using these models are inefficient and no other efficient alternatives to that without these GPUs, then Nvidia will remain unchallenged unless that changes.
EDIT: It is true like it or not AI bros. There are too many to list. For example, just yesterday:
Fulcrum Therapeutics, Inc. (FULC) 38% up.
China SXT Pharmaceuticals (CM:SXTC) down 25%.
Regencell Bioscience Holdings (RGC) 28% up.
NanoViricides (NNVC) up 20%.
Armata Pharmaceuticals (ARMP) down 23%.
Nvidia is just one of many lottery tickets and 8% in one day is hardly volatile in stocks.
Also I would add, volatility measures continued volatility over periods of time, not single days. Most pharma stocks are essentially static for months or years until they announce one good result and the stock jumps 30% in a day. This doesnt mean they are volatile stocks, compare Gileads IV to Tesla for example.
Exactly, using the IV for supporting their highly risky 0DTE option trading strategies and gambling on earnings rather than investing long term?
> Most pharma stocks are essentially static for months or years until they announce one good result and the stock jumps 30% in a day.
That is the point on long term 'investing'.
A much lower risk and patient strategy to invest and buy such low priced stocks at the bottom for the long term and take profit after the price jump rather than gambling on ridiculous short term option trades or the retail favourite of 0DTE trading strategies which that is just plain gambling.
> Not if you understand what stocks are and how betting on biotech stocks is not a wise investment.
So you're giving investment advice for putting money in NVDA stock at the top or all time highs, right now on earnings as a 'wise investment' to make 8% (after hours) when others are clearly taking their money out of the market.
Unless you already invested in NVDA stock last year, that move is gone and you're just telling retail late comers to throw money at NVDA at the top for others to take their profits.
After warning not to buy stocks like NVIDIA at the top when other investors with larger capital are taking their money off the table?
An 8% move in reaction to earnings is close to nothing to what I've seen as 'volatile' compared to the stocks shown in my original comment, which were up / down > 20% in ONE day without earnings. 8% is close to nothing for retail investors like almost everyone here and likely yourself.
Also I'm not the one giving advice over looking at the IV or telling retail investors to jump into Nvidia stock at the top as a 'wise investment' or to use 0DTE option gambling strategies, a popular favourite with lots of retail traders.
Now it is 10% down after the smart money started taking their profits off the top as I warned days ago whilst many retail investors who bought in at the top are now left stuck in the market.
Please.
Stocks are lottery tickets and Biotech stocks are stocks.
> You're just gambling on binary results.
The risks are no better than most of the AI bros buying Nvidia and overpriced stocks at the very top or all time highs or extremely risky 0DTE strategy trades on earnings announcements.
Do AI bros who jumped in late really have to be married to their stocks that are already overpriced to make 8% on earnings when the very early folks start selling to take their profits?