The stock of NVIDIA can buy the 230 smallest S&P 500 companies. Which are still quite big companies. I recently learned this fact and I think it is pretty wild.
In year 2000, Nokia had a market cap of around $100 billion and Nvidia had a market cap of around $2 to 4 billion. Nvidia just made graphics cards, at a time when games were still being written for MS-DOS. Nobody was to imagine the real money to be made from repurposing these graphics cards for crypto and now this AI 'application'.
NVIDIA doesn’t separate their networking revenue, but at time of acquisition mellanox had less than a billion dollars on sales. Less a half a percent of NVIDIA’s current data center sales. That has undoubtedly grown, but I would be surprised if the networking share of their data center business was more than a rounding error. Keep in mind they sell GPUs for $50k, 2-8GPUs per box, and even a state of the art Infiniban…
You are missing his point.
I think I replied to the wrong comment, thank you.
I was reading an article earlier today that said passive investing is more than 50% of the market--and since most ETFs allocate by market cap, it causes a reinforcing feedback loop for market cap leaders.
Passive investing is not an issue, but the default bias towards large cap equities like SP500, Nasdaq100. Passive investing through total market ETFs (like VTI) maintains the status quo. For example, if they are only two companies, say with 1T and 4T market cap. If one invests 5M into a total market ETF, 1M is allocated to company A and 4M to company B. But since company B is 4x bigger than company A, the upward pric…
The money you buy stock with l goes to the former/selling shareholder, which is most often not the company. It is possible the company is holding its own stock and selling for cash, or emitting new shares for cash, but that is much much rarer.
> most insane tech bubble we have ever seen. the current "bubble" hasn't surpassed the dot-com boom yet.
The total aggregate loss of value from top to bottom of the dotcom crash was about $5 trillion. That’s the current market cap of NVIDIA alone, to say nothing of other AI companies. So yeah, it has.
that number back in 2000 is about $9.7 trillion adjusted for inflation. You can't merely just compare the numbers at that time with a number today. It's meaningless.
You have to compare forward earnings to share-price ratios.
Nvidia seems to be operating more like a sovereign wealth fund than a traditional business. They have a very-in-demand product, that is not likely to last forever, and is getting their fingers in as many pies as possible with the money and influence while they have it.
As it seems now, they are into producing silicon that does massive parallel calculations, and variants on it thereof. To me, that seems to be a requirement for the computing industry for a long time. And, they seemed to have amassed enough capital to comfortably pivot to the next great thing that requires similar calculations. I think this is their super power. The next logical step would be to get into CPUs, to beco…
The problem is not demand going away. No margin in a late stage company goes unassailed for long. Intel has nothing to lose. AMD has everything to gain. Untold other players are finding oxygen in various places. Nvidia is smart to use their spotlight as long as it lasts, but in their pitch, they're saying, "this will put you ahead," not "this will last forever."
Perhaps not forever but GPUs for AI is likely to be a very solid and profitable business for a long time. CPUs made plenty of money for their makers in that era.
AI, while undeniably powerful and transformative, is in the midst of the biggest, most insane tech bubble we have ever seen. And nearly all of that money is ending up, directly or indirectly, in GPU data centers. And NVIDIA is the largest cost (profit maker) there. When that investment firehouse gets turned off, the AI providers will stop building new data centers. Likely for some years. That revenue stream for NVIDI…
Maybe the most insane tech bubble you've seen. We'll have to wait and see how the superbowl goes.
Microsoft (Elop and Ballmer) ruined Nokia's cell phone line that led to massive layoffs. Let's see if this investment leads to the final elimination of an EU tech company. Why does Finland permit this?
NOKIA IS NOT PHONE COMPANY. Never have been. They produce ayt of telecom stuff.
Nokia was never ruined.
As it seems now, they are into producing silicon that does massive parallel calculations, and variants on it thereof. To me, that seems to be a requirement for the computing industry for a long time. And, they seemed to have amassed enough capital to comfortably pivot to the next great thing that requires similar calculations. I think this is their super power. The next logical step would be to get into CPUs, to beco…
The problem is not demand going away. No margin in a late stage company goes unassailed for long. Intel has nothing to lose. AMD has everything to gain. Untold other players are finding oxygen in various places. Nvidia is smart to use their spotlight as long as it lasts, but in their pitch, they're saying, "this will put you ahead," not "this will last forever."
The stock of NVIDIA can buy the 230 smallest S&P 500 companies. Which are still quite big companies. I recently learned this fact and I think it is pretty wild.
In year 2000, Nokia had a market cap of around $100 billion and Nvidia had a market cap of around $2 to 4 billion. Nvidia just made graphics cards, at a time when games were still being written for MS-DOS. Nobody was to imagine the real money to be made from repurposing these graphics cards for crypto and now this AI 'application'.
Tbf only 6 years after that Jensen was already betting on GPGPU