tl;dr at bottom
Not trying to start a debate, I'm not long or short $NVDA, don't own any, and I don't plan to open a position anytime soon, I'm just your monthly buyer of $VOO and $QQQ.
However, to the bulls out there, what is the reason for such a MASSIVE premium for this stock? I understand they crushed earnings and increased foecast to a nearly 50% gain in revenue by Q1 2024, but even with that premium, they are trading at a nearly 200 P/E.
Assuming NVDA maintains that 50% premium and holds it for all 4-quarters in 2024, thats $44B in revenue which if they had 100% margins and zero cost of any kind, it would take you almost 22 years to payback the value of the stock.
Sure, someone will tell me P/Es don't matter, and they are growing like crazy, but at what point is the value of the stock (again, almost $1 TRILLION) still out of control?
– Their Gross Profit is 56% which is impressive, but not unherd of (MSFT is 68%, META is 80%)
– Their net income is 16% which is right in line with everyones favoriate not a car company TESLA at 15%
Lets throw out fundamentals since they clearly don't matter that much for this stock and look at their growth: $7.19B (lower than Q1 2022 of $8.29B).
Their Q4 22 Revenue was $6.05B vs. Q4 21 of $7.64B
So grow is slower/stagnant from the previsous years, so why does that get such a massive premium? Did they beat earnings estimates, yes, but those were concervitive. Did they raise guidance by 50% due to the AI boom, yeah, how long will that last? Same length as the gaming/crypto/at home boom? Okay, then what, revenue falls again?
TL;dr
People talk about $TSLA being over valued, I've never seen a stock like $NVDA before being this “overvalued” in my life. What is keeping it up?
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