Nvidia is now a $1T company • Hacker News Board

Re: Nvidia is now a $1T company

#121

Post by cykros » Wed, May 31, 2023, 10:17 AM UTC

malpanim wrote: post #9

alberth wrote: post #5

Wow, 213x P/E ratio. To put this into context with other large tech companies: P/E MARKET CAP Salesforce 1,036x $0.2T AMD 519x $0.2T NVIDIA 213x $1.0T Amazon 293x $1.25T Microsoft 35x $2.4T Meta/FB 33x $0.7T Apple 30x $2.7T Google 27x $1.5T TSMC 16x $0.4T Samsung 10x $0.3T EDIT: "P/E" ratio is the Market Cap "Price" / Earnings the company generates. E.g. Samsung is generating $30B in earnings (not revenue, earnings),…

Why TSMC is having such a low PE. Aren't they are the one producing all these chips other than Intel?

The "E" in "PE" is earnings. It all boils down to profit margin. And lately, their input costs have been fairly high, what with COVID supply chain disruption.

Part of what's let NVIDIA perform a bit better (if we're chalking its market cap up to performance rather than hype -- the truth is likely somewhere in between) is that they actually have a bit more of their business tied to software these days, which doesn't typically suffer from raised input costs. Sell more software, and your profits rise a LOT faster, because 100 licenses worth of software has a similar input cost as 1 license.

Re: Nvidia is now a $1T company

#122

Post by sdfghswe » Wed, May 31, 2023, 12:05 PM UTC

alberth wrote: post #91

sdfghswe wrote: post #77

Earlier quoted context omitted.

I see salesforce valued at $216/share and $5.25 twelve months trailing per share. that's 41x, not 1000x.

https://finance.yahoo.com/quote/CRM?p=CRM&.tsrc=fin-srch

You're right. The numbers in the link you gave me agree with the SEC reports. I guess I was using a faulty website. Thank you.

Ok so the reason why P/E is so crazy high for saleforce is that their earnings tanked and the price hasn't followed.

Re: Nvidia is now a $1T company

#123

Post by Sohcahtoa82 » Wed, May 31, 2023, 4:10 PM UTC

lumost wrote: post #117

Sohcahtoa82 wrote: post #95

Earlier quoted context omitted.

Isn't being CapEx heavy a sign of constant expansion, though? I would think that selling (or choosing not to buy) a stock because their P/E is low because their CapEx is high is short-sighted unless you don't think their CapEx spending is going to pay off. It's like...back in 2012, I was talking to one of my wife's relatives at a Christmas party. He said he'd never buy Amazon stock because they've never been profitab…

Software R&D is a special type of capex, in principal - successful R&D execution buys recurring free cash flow in near perpetuity. Contrast this with TSMC who needs to outlay ~50 Billion every 2 years on a new Fab which will deprecate over ~6-7 years. If TSMC stopped buying fabs, then intel would beat them in ~2 years time - and TSMC would be out of business in 6-7 years. Software R&D may be less efficient then the a…

> Contrast this with TSMC who needs to outlay ~50 Billion every 2 years on a new Fab which will deprecate over ~6-7 years.

Oof, that's the bit I forgot. TSMC's CapEx isn't just expansion, it's replacement. They're constantly upgrading to manufacture new technologies.

It makes sense now, thank you.

Re: Nvidia is now a $1T company

#124

Post by Sohcahtoa82 » Wed, May 31, 2023, 4:12 PM UTC

partiallypro wrote: post #116

Sohcahtoa82 wrote: post #98

Earlier quoted context omitted.

> AI is the new "blockchain" in terms of the level of hype In terms of hype, I'd agree. The difference is that AI is useful.

That is obvious, I just mean that many companies that don't have, and won't have, any AI competencies are now mentioning AI in their earnings calls. I saw someone had done a chart of earnings calls that mention AI and it has skyrocketed. Also a new trend of stuffing GPT and LLMs into apps that don't need it is already in the pipeline, people comment it on HN all the time.

Sounds like a great opportunity for shorting a stock.

They announce doing something with AI, their stock skyrockets, the new AI features don't noticeably increase revenue while their expenses go up considerably, stock drops. Profit.