Nvidia’s Blowout Forecast Sparks $260B AI Rally

I just can't get my head around this. Sure, Nvidia is in a good position with AI and Data Centre. I absolutely think they're in a great position and they're going to sell a lot of chips. But they're trading at 200 times earnings? I don't see how anyone could reasonably justify that. And not only that, but while yes, the earnings are good, surely the AI hype cycle has pulled forward a decent amount of demand, it's a race to acquire enough GPUs, but Nvidia are quite obviously going to be supply constrained. I don't know, I just find it difficult to understand how this price could possibly be justified.

Re: Nvidia’s Blowout Forecast Sparks $260B AI Rally

#9

Post by twoodfin » Thu, May 25, 2023, 4:26 PM UTC

sschueller wrote: post #6

GPU makers really lucked out in the last few years. First from the crypto craze and now the AI craze.

I dunno if it’s “luck”. Nvidia in particular made a big bet more than a decade ago on GPU’s having strong aptitude for important general computation problems. Turns out they were right.

Re: Nvidia’s Blowout Forecast Sparks $260B AI Rally

#10

Post by toomuchtodo » Thu, May 25, 2023, 4:49 PM UTC

SilverBirch wrote: post #8

I just can't get my head around this. Sure, Nvidia is in a good position with AI and Data Centre. I absolutely think they're in a great position and they're going to sell a lot of chips. But they're trading at 200 times earnings? I don't see how anyone could reasonably justify that. And not only that, but while yes, the earnings are good, surely the AI hype cycle has pulled forward a decent amount of demand, it's a r…

Hype drives narratives which drives valuations. Never underestimate hope or confidence as a multiplier influence.