1. The AI boom goes bust. Nvidia sales and/or margins crater. The stock craters with it.
2. The AI boom is the real deal. Companies aren’t stupid and won’t keep paying Nvidia these prices forever. Pretty soon hardware and software architectures are standardized enough that anyone who can get onboard with TSMC, Samsung, or Intel can churn out hardware optimized for the right few functions and sell for a faction of the price. Nvidia can still be an innovator but they won’t be able to sell “bread and butter” products at these prices. Sales and/or margins crater, as does the stock.
400% earnings growth and
242% revenue growth.
The reality was 461% earnings growth (629% GAAP)
262% revenue growth.
78.9% gross margin.Nvidia did it again.
What I fear is that Nvidia sees no value in its basic graphics cards any more or wants a lot more for them because they could sell that wafer space to businesses for more $. Its been getting crazy expensive for decent GPUs for a while for gaming and I can't see the next generation doing anything but being much higher due to the AI boom.
I foresee Nvidia stock playing out like a softer version of iomega that will still have consumer demand, but not as much temporary demand from the megacorps.
https://finance.yahoo.com/news/day-market-history-iomegas-in...
If you adjust for inflation I imagine they'd have some competition from the robber barons, but it's hard to imagine.
However I do notice that big players (GOOG, Meta, etc), seem more concerned with power cost right now than they do per-unit video cards.
Frankly, it's shocking how bad they are at it.
400% earnings growth and
242% revenue growth.
The reality was 461% earnings growth (629% GAAP)
262% revenue growth.
Nvidia did it again.
If you believe AGI/ASI is imminent, the demand curve for compute will far exceed supply for the foreseeable future.
(Disclaimer: I am heavily biased, as a longtime investor in Nvidia + semiconductors, since 2014+).
I saw pallets of h100s shipping that were worth 100s of millions each pallet (each card is $40k and you can fit a lot on a pallet) as someone working for a company buying these and knowing that many other companies were doing the same (we have 12+ months of back orders with nvidia alone).
I invested last year at ~$250 when redditors we're posting that "Nvidia is the best shorting opportunity" without any of the knowledge of the market.
It looks like it's now going above $1000 and still going up.
Invest in things you know intimately folks. Also do the opposite of Reddit.