Uh ohhhhh The Law of Large Numbers has everything to do with nvda https://finance.yahoo.com/news/nvid...ck-a-month-ago-strategist-says-191451119.html Nvidia's valuation is getting hard to justify, and it's time to sell, one investment manager says. Nvidia failed to meet sky-high expectations when it reported its fiscal second quarter earnings on Wednesday. Nvidia reported profits and revenue that topped forecasts but not by as much as investors hoped, delivering its smallest earnings beat in the last six quarters.
What I saw as a farmer... Years ago I wasn't making it in farming...Prices were low. But, I saw the businesses around me thriving!! The processor, the tractor company, the chemical company, the seed/tree/plant companies were making money off the farmer to great extent. Fast forward to 2024...Companies now have these NVDA chips and they are going..."what do we do with these things"?? "How do we implement our great plans"!! In walks IBM and Fujitsu (FJTSY)..."We'll help you. We have the people and the knowledge you turn your dreams into reality"... So the two companies hit yearly highs, while the chip makers realize they "just" have the hardware... The value is in the chips right?? The value is in the hardware right??
Today was historical, nvda lost the most market capitalization of any company ever on record ... The decline erased $278.9 billion from Nvidia's market value. It's the largest one-day market cap loss for any U.S. company on record, exceeding Meta Platform's $232 billion decline on Feb. 3, 2022. was down 6.2%. Broadcom will release its quarterly earnings later this week.
Like I said Meta is likely one of four (see below). (MORNINGBREW) AI Trouble in chip paradise VCG/Getty Images A bad day for Nvidia got even worse on Tuesday when Bloomberg reported that the Department of Justice subpoenaed the chipmaker as part of its investigation into whether the world’s hottest company unfairly wields its industry dominance. Yesterday, Nvidia denied it was technically subpoenaed. Bloomberg followed up to say that Nvidia was merely splitting hairs about the type of request it received from the DOJ but that it was in fact asked to answer questions about its empire. One-two punch: Bloomberg’s initial Tuesday afternoon dispatch came when Nvidia was already down. Worrisome economic data sparked a mass sell-off of AI stocks that wiped $279 billion (9.5%) from Nvidia’s market cap—the largest single-day decline in stock history—and dragged on the entire tech sector. Nvidia hasn’t bounced back. The chipmaker dipped a little more yesterday, possibly reflecting investors’ budding concerns over whether AI-hyped companies are worth their dizzying values. Nvidia’s latest earnings indicated slowing (but still doubling) growth last quarter, while traders worry that companies could start paring back AI investments. Looking ahead…Nvidia is being asked to turn over info that may help the DOJ determine if the chip giant’s acquisition of the software company RunAI is kosher and if Nvidia gives preferential treatment to clients that buy more of its products. The company has money in countless other AI-adjacent companies and vice versa (Microsoft and Meta spend more than 40% of their hardware budgets on Nvidia), so the antitrust probe could dent the whole sector…and ignite a political firestorm.—ML
META is definitely one of the 4!! Tesla is a second Google 3rd. 4th msft Once these 4 stop slending billions nvda will lose half of its market value.
Lengthy read for anyone interested in the long-term view. https://aswathdamodaran.blogspot.co...811&utm_content=323457811&utm_source=hs_email A fund investor sent me the link and these comments: "Aswath Damadoran teaches corporate finance and valuation at NYU and is quite brilliant in my estimation, definitely smarter than me. In Damadoran's optimistic forecast for Nvidia, he assumes revenue will grow from $96.3B to $422.7B in ten years, which equates to a compound annual growth rate of 16%. Then he assumes some regression in EBIT margin down to 60%, while the company maintains a return on invested capital of 130% over the 10 years. These are metrics that any company would love to achieve. Even with this phenomenal performance, Damadoran's fair value estimate for Nvidia would only be $87, which is quite a large discount from today's price of $106. This doesn't mean that he is right, or that Nvidia can't rally to $200. It just means that the current valuation assumes incredibly optimistic assumptions that have historically been very hard to achieve. This is the same dynamic which we saw when Tech busted in 2000. Microsoft and Cisco still had amazing businesses, and the businesses produced great profit growth. However, the valuations at that time were so excessive, that Microsoft investors had to wait 13 years to get back to even, while Cisco investors still haven't gotten there. Because stocks like Nvidia now have such a huge weighting in the indices, these factors could cause the indices to have drastically worse performance than the previous 10-15 years, when we were recovering from the lows of the Great Recession."
Not a long termer myself by any means but I've watched many of Aswath Damadoran's YouTube videos. IMO very informative. Think I have an TSLA excel spreadsheet he uploaded somewhere on my rig.