TSLA - 7 Charts That Show How Extreme Nvidia's Valuation Has Become
2024-06-21 09:41:12 ET
Summary
- Nvidia Corporation's market capitalization reached $3.45T on Thursday, making it the most expensive stock in the world thanks to eye-watering valuation multiples.
- Nvidia's market cap now exceeds the FTSE 100, the CAC 40, and the Hang Seng, despite its sales being less than 4% of these indices.
- The stock's market cap is almost 5x the entire Nasdaq 100 free cash flows.
- At some point in the near future, investors are likely to realize that large companies grow much more slowly than small ones over the long term and start to apply significantly lower valuation multiples to Nvidia.
At one point on Thursday, June 20, Nvidia Corporation ( NVDA ) reached a market capitalization of USD $3.45 Trillion, making it the most expensive stock in the world. While the stock has since given back $200B, at $3.25T it still trades at an astonishing 77x multiple on $42B of trailing earnings. The following charts just how crazy this valuation is in a historical context and relative to the rest of the market. The key point is not just that the stock trades at extreme multiples, but that such high multiples are extremely rare for large, established businesses....
7 Charts That Show How Extreme Nvidia's Valuation Has Become