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Comment by cj | Hacker News Reader

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Google: 1.80T (P/E 26.81)

Apple: 2.84T (P/E 28.60)

Microsoft: 3.07T (P/E 37.47)

Nvidia: 2.02T (P/E 67.63)

Quite astonishing.

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Nvidia's valuation is perfectly reasonable if you expect that they'll manage to grow at a similar pace for the next couple of years and will retain their obscenely high margins. Of course for that not only does the AI hype need to continue but their competitors need to fail so bad they wouldn't even be able to offer anything even with 2-5x lower margins.

OTH Especially Apple is not doing that great at all (and if above assumptions hold they are much more overvalued than Nvidia is). Their revenue this year is estimated to be lower than in 2022 while Nvidia's more than doubled and Microsoft is growing 5% or so per year.

67.63 is trailing PE. If you look at the Forward PE, it is at much more reasonable 38.76. Considering its growth in Q4, it is not that crazy. Though now the question is how long they can sustain it.

the market is forward looking - the sooner you understand that, the less money you will lose ;)

If the market was looking forward theyd see that nvidia's product offering has minimal moat and no chance to stay differentiated over a timeline long enough for this valuation to make sense.

have you been paying attention?

Nvidia's competitors are starting to release solid hardware. They just need to release all the libraries with their open source CUDA alternative and nvidia's margins go from 75% to a more reasonable 20-30%. Every big tech company is giving nvidia billions of dollars a year, the incentives to get a cuda alternative working are too high for it to not happen.

> They just need to release all the libraries with their open source CUDA alternative

Yeah but they've tried. Year after year for the last decade. They keep failing. Maybe they're more motivated now? But CUDA isn't a moat because it's unassailable, it's a moat because nobody trying to cross it knows how to operate a shovel

Intel and AMD have tried, but their software divisions are incompetent, and there was much less money in GPUs pre LLMs. Now every big tech in the world is putting resources toward this as theyre sick of the nvidia tax.

In Gold Rush, you either believe it is a fool's errand and ignore it or if you believe in it and dig as fast as possible. It never makes sense to work on improving efficiency of shovel maker.

Google is trying for some time to use its TPU, so is Amazon. It makes so much more sense to pay few billions to Nvidia and don't risk the trillions in valuations.

you say it as if noone has tried...

This is definitely true eventually and there might be investment opportunities upstream of Nvidia to capitalize on this (TSMC and ASML come to mind).

Trailing vs. Forward P/E.

https://www.youtube.com/watch?v=hR45ja3VjGE

HFV for Hypothetical Future Value: get ready for the quazillion dollar!

Can't spell "hypothetically" without "hype".

We need to coin the term "hyperthetically".

"hypo" means under or less than.

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