NVDA - Nvidia: History Of CPUs Says GPUs Are Not Worth $3 Trillion
2024-06-25 11:00:29 ET
Summary
- NVIDIA Corporation's stock price continues to rise, reaching a market cap of $3.1 trillion by June 21, 2024.
- A cautionary tale from Intel's stagnant stock price post-2000 despite market dominance in microprocessors.
- Intel's revenue and profitability were compressed by credible alternatives, even though it had a market share of 60-80% over the past two decades.
- A story similar to Intel's could play out for Nvidia as AI chips' revenue growth, profitability, and valuation multiples falter after the initial buzz and excitement wears off.
NVIDIA Corporation ( NVDA ) stock price continues to power ahead recently, with a market cap on June 21, 2024, of $3.1 trillion. I previously covered NVDA on April 22, 2024 , and argued it was different from the other Magnificent Seven companies as it sold to corporates rather than individual customers and has much less customer captivity, which would diminish its long-term prospects. Since then, NVDA stock has gained 53% as its Q1 earnings release exceeded estimates in late May 2024. However, my outlook for NVDA remains unchanged, and today I discuss NVDA using the historical case of CPUs (which was not too long ago)....
Nvidia: History Of CPUs Says GPUs Are Not Worth $3 Trillion