When the press talks about bubbles, they aren’t bubbles. When the press says “oh this is fine, it’s the new normal”, that is when you need to panic.
Western Bloke
The problem is that NVDA is priced to keep doubling and the forward guidance is around 30%. This was going to happen, sooner or later.
M
“When the press talks about bubbles, they aren’t bubbles. ”
When they talk about fear of a bubble it’s already in the process of popping. The press is a trailing indicator at best.
Matt
The bubble is on its way, but it’s going to get a lot crazier first. Nvidia today is very much the analogue of Cisco in the dotcom bubble: they’re making the hardware that everybody is buying to get into the craze. NVDA is trading at about 40x forward earnings, pretty much the average of where it’s been over the last 3-5 years. CSCO peaked at a forward P/E of 200 in 1999. That’s a big difference.
NVDA is at $122 in pre-market at time of writing, down from a close of $125 and a peak of about $130 earlier in the week. During the JCB*-induced flash crash earlier in the month it was at $91. We’re having a little correction after a big run up; if the earnings report had been bad then it might be a different story, but 6-7% off the month’s high does not a bubble-burst make.
When NVDA’s customers are companies that make no money (as opposed to Microsoft, Google, et al which currently make up the bulk of their revenue) and their P/E gets into triple figures, that’s the point where you need to start timing your exit.
You ain’t seen nothing yet.
*Japanese Central Bank, not your favourite manufacturer of excavators
Steve
The IT industry keeps chasing after unicorns.
But meanwhile, Google search is now complete garbage. Unless you’re searching for Facebook or Instagram, results are polluted with AI-generated slurry.
When the press talks about bubbles, they aren’t bubbles. When the press says “oh this is fine, it’s the new normal”, that is when you need to panic.
The problem is that NVDA is priced to keep doubling and the forward guidance is around 30%. This was going to happen, sooner or later.
“When the press talks about bubbles, they aren’t bubbles. ”
When they talk about fear of a bubble it’s already in the process of popping. The press is a trailing indicator at best.
The bubble is on its way, but it’s going to get a lot crazier first. Nvidia today is very much the analogue of Cisco in the dotcom bubble: they’re making the hardware that everybody is buying to get into the craze. NVDA is trading at about 40x forward earnings, pretty much the average of where it’s been over the last 3-5 years. CSCO peaked at a forward P/E of 200 in 1999. That’s a big difference.
NVDA is at $122 in pre-market at time of writing, down from a close of $125 and a peak of about $130 earlier in the week. During the JCB*-induced flash crash earlier in the month it was at $91. We’re having a little correction after a big run up; if the earnings report had been bad then it might be a different story, but 6-7% off the month’s high does not a bubble-burst make.
When NVDA’s customers are companies that make no money (as opposed to Microsoft, Google, et al which currently make up the bulk of their revenue) and their P/E gets into triple figures, that’s the point where you need to start timing your exit.
You ain’t seen nothing yet.
*Japanese Central Bank, not your favourite manufacturer of excavators
The IT industry keeps chasing after unicorns.
But meanwhile, Google search is now complete garbage. Unless you’re searching for Facebook or Instagram, results are polluted with AI-generated slurry.
So don’t use it, Steve.
Peter – I use Yandex now.