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Comment by nl | Hacker News Reader

Nvidia's revenue growth rate was 94% and income growth rate was 109% for the Oct 2024 quarter. This compares to Apple's 6% and -35%.

Nvidia is growing profits faster than income.

Nvidia's net profit margin is 55% (vs Apple 15%) and they have an operating income of $21B vs Apple's $29.5

These are some pretty impressive financial results - those growth rates are the reason people are bullish on it.

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Yes revenue has grown xx% in the last quarter and year, but the stock is valued as if it will keep growing at that rate for years to come and no one will challenge them. That is the definition of a bubble.

How sound is the investment thesis when a bunch of online discussions about a technical paper on a new model can cause a 20% overnight selloff? Does Apple drop 20% when Samsung announces a new phone?

> the stock is valued as if it will keep growing at that rate for years to come and no one will challenge them.

If it were valued that way, the P/E would be over 100.

Feel free to say Nvidia is overvalued, but you have to get the financials right.

People do not understand. If you want to make money in the stock market, find growing companies. Pricing of the growing companies is different from others. Since it is not clear when the growth will end, there is a high probability that there will be extreme things in pricing. Since they are market leadership and can lead the price. Don't compare growing companies with others. That's a big fallacy. Their price always overshooted. I don't have any investments in Nvidia, but reality is that. This is why economists always talk about growth.

One might argue that very high margins could be a bad sign. If you assume that Apple is efficient at being Apple, then there is not a whole lot of room for someone else to undercut them at similar cost of goods sold. But there is a lot of room to undercut Nvidia with similar COGS — Nvidia is doing well because it’s difficult to compete for various reasons, not that it’s expensive to compete.

That's the thing. Nvidia's future growth has been potentially kneecapped by R1's leaps in efficiency.

I don't see it, instead of 100 GPUs running the AIs we have today, we'll have 100 GPUs running the AI of the future. NVIDIA wins either way. It won't be 50 GPUs running the AI of today.

All other things being equal, less demand means lower profits. Even if demand still outstrips supply, it's still less demand expected than a month ago.

If the demand is for reaching AGI then we'll still need all the GPUs NVIDIA can sell, we'll just get there faster thanks to DeepSeek.

Bearish argument: "How can we adapt you to run on 8,000,000 NVidia GPUs instead of 80,000,000?"

That probably won't be the first question we ask AGI if/when we ever get there, but it will be near the top of the list.

Nvidia is already doing that.

What needed 1000k of Voltas, needed 100k of Amperes, needed 10k of Hopper, will need 1k of Blakwell.

Nvidia has increased compute by a factor of 1 million in the past decade and it's no where near enough.

Blackwell will increase training efficiency in large clusters a lot compared to Hopper and yet it's already sold out because even that won't be enough.

to be fair, there's no way these rates will be sustained for a decade.

What does "to be fair" mean in this context? There's nothing fair or even an alternative point of view. Even the most bullish NVidia investor would agree with this statement.

No one expects this growth to be sustained for a decade. Companies aren't prices based on hypothetical growth rates in 10 years time.

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