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And Tesla is currently worth more than these combined: BMW + GM + Ford + Mercedes + Hyundai + Nissan + Fiat Chrysler + Honda You know, just a trillion dollars

And Tesla is currently worth more than these combined: BMW + GM + Ford + Mercedes + Hyundai + Nissan + Fiat Chrysler + Honda You know, just a trillion dollars in sales give or take. I'm sure Tesla will get there sometime this century. Intel has $25 billion in operating income the last four quarters (~73% increase in three years). nVidia has $3.4 billion in operating income the last four quarters. Yeah but nVidia is growing fast, right? Nope, they're growing modestly. How long will it take for nVidia to get to $25b in operating income? 15 years if everything goes perfectly? It's certainly up to the reader to judge whether these spectacular valuations are due to the stock market bubble, or if... you know... it's different this time, it's the new economy, cloud!, or whatever bullshit is being spun this time around.

fluffy87 6y ago
The stock price only reflects the supply and demand of a company’s stock. A lot of people want to have nvidias and Tesla stock, so their price is higher. The problem is all those people writing financial pornography about the stock market. That can give you the impression that there is more to the stock price than that.
- saddlerustle 6y ago
  The fundamental value of a stock is the net present value of future cashflows that stock entitles you to. Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money.
  - jkinudsjknds 6y ago
    Not especially useful advice if the long run is longer than your lifetime. npv of cashflows is not a useful metric for most popular stocks
  - jaekash 6y ago
    > Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money. Not if they sell it to someone else for a higher price.
    - pjc50 6y ago
      Someone will lose money, but you can't rely on Softbank throwing another billion dollars down a hole every time you've a tech disappointment to unload.
      - mercer 6y ago
        well to be fair that hole can be metaphorically filled by involving Greensill to help with some creative accounting!
  - Denvercoder9 6y ago
    Nowadays the fundamental value of a stock is more what you can convince others to pay for it.
    - phkahler 6y ago
      That's not fundamental, its superficial and the people playing that game are in for a correction.
  - AznHisoka 6y ago
    Unless the stock pays a dividend (and a lot of stocks have never paid one), their cashflow never end up in your wallet as a shareholder. Thus the only value you will get is the amount someone else will pay for your stock. Sure they need some cashflow (after all, nobody wants to buy a bankrupt company) but to believe the stock value is a straightforward formula based on cashflows isn’t how the market works. Otherwise Amazon would have plummeted in price long ago.
    - qeternity 6y ago
      Buybacks. The other (and more efficient) method to return capital to shareholders is via buybacks, where the company literally hands you cash in exchange for your shares.
      - AznHisoka 6y ago
        That is true though again, not every company does buybacks.
    - saddlerustle 6y ago
      A company might not do a dividends or buybacks now, but if they are successful they are likely to do so eventually, and that expectancy is worth something just the same.
raphaelj 6y ago
Well, Intel income can also go down fast, and that's probably the main reason we see the stock price going down.
- battery423 6y ago
  Really? As far as i know intel has/had plenty of reserves and is still selling good. The Demand in general is very high. Doyou have any numbers?
  - empath75 6y ago
    In the year after the iPhone was announced, blackberry stock tripled to 140 dollars a share. They had record profits and revenue. It’s currently $4. You can be a dead man walking even while your financials are fine.
    - Synaesthesia 6y ago
      The same could be said of nvidia. I don’t think their future is assured by any means.
      - empath75 6y ago
        Nothing is assured, but if you were going to bet, intel’s future seems a lot cloudier. Where do they get growth from?
    - itsoktocry 6y ago
      >In the year after the iPhone was announced... The iPhone was a one-in-a-generation product that upended an industry. Yet I see 10 products being compared to it a week. It may sound cynical to people here, but in the long-run, you'll do a lot better thinking "this is probably not the next iPhone" than having FOMO that every second tech company might be the next Apple.
      - empath75 6y ago
libertine 6y ago
That's why sometimes I wonder if the overlap of "tech" and "stock market" is bad. One deals with concrete things, other deals with speculation. These valuations are references of the stock market - it's almost a measure of popularity, than anything else. Right?
- deleted 6y ago
  [deleted]
- catalogia 6y ago
  The overlap of tech and speculation is called "science fiction."
deleted 6y ago
[deleted]
travisporter 6y ago
"Cloud!" made my day! I could totally see this in on a new-age advertising page on a new X as a service website lol
mywittyname 6y ago
Several of those manufactures that you listed are on the verge of bankruptcy (Ford, Nissan, FCA). Auto manufacturing is capital-intensive and extremely high risk and a few bad quarters is all it takes to completely wipe out shareholders. You may not realize this, but GM actually went bankrupt in 09 and shareholders lots everything. Telsa is not going to go bankrupt in the near- or medium-term. There's just too damn much money backing them.
- nickik 6y ago
  Tesla is also able to have almost positive cash flow on high margin high demand cars in the middle of a pandemic. The other automakers are leaking money like there is no tomorrow. Ford, GM, FCA have a thin wedge of the market that is still profitable for them and that market is under attack, with little indication of them being able to make a huge splash in another market. Not to mention a broader shift in car market and transportation that requires massive investment. If you don't grow, don't make much profit and are risky, meaning a couple of bad quarters almost kill you your stock is not gone be worth much.
gruturo 6y ago
Intel is quite unconvincing on a lot of key aspects (10nm, 7nm, performance after spectre family mitigations, etc) but to me the biggest danger is their inability to commit and persist on pretty much any topic which isn't their mainstream CPU line. They sold Xscale, they sold their modem division (admittedly it was terrible, but I refuse to believe it was unfixable, certainly Apple didn't). This creates hesitation in prospective customers of anything which isn't their mainstream CPU business, reducing them to a one trick pony. And that pony is now having its lunch eaten from both below (ARM) and above (Epyc). Their operating profit and their reserves mean little if prices go down - they are used to fat, lofty margins and I'm not sure they still know how to execute without them. Think about what happens to the shale oil businesses once crude prices approach their extraction costs. You implode very quickly no matter how big you are.
- johnvanommen 6y ago
  Great summary. And Intel's cost of business is incredibly high. Semiconductor fabs are some of the most expensive factories in the world. Intel is in danger of becoming General Motors, a company that sat by idly while competitors made them obsolete.

fluffy87 6y ago

The stock price only reflects the supply and demand of a company’s stock. A lot of people want to have nvidias and Tesla stock, so their price is higher. The problem is all those people writing financial pornography about the stock market. That can give you the impression that there is more to the stock price than that.

saddlerustle 6y ago
The fundamental value of a stock is the net present value of future cashflows that stock entitles you to. Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money.
- jkinudsjknds 6y ago
  Not especially useful advice if the long run is longer than your lifetime. npv of cashflows is not a useful metric for most popular stocks
- jaekash 6y ago
  > Buyers and sellers are welcome to believe otherwise, but in the long run they will lose money. Not if they sell it to someone else for a higher price.
  - pjc50 6y ago
    Someone will lose money, but you can't rely on Softbank throwing another billion dollars down a hole every time you've a tech disappointment to unload.
    - mercer 6y ago
      well to be fair that hole can be metaphorically filled by involving Greensill to help with some creative accounting!
- Denvercoder9 6y ago
  Nowadays the fundamental value of a stock is more what you can convince others to pay for it.
  - phkahler 6y ago
    That's not fundamental, its superficial and the people playing that game are in for a correction.
- AznHisoka 6y ago
  Unless the stock pays a dividend (and a lot of stocks have never paid one), their cashflow never end up in your wallet as a shareholder. Thus the only value you will get is the amount someone else will pay for your stock. Sure they need some cashflow (after all, nobody wants to buy a bankrupt company) but to believe the stock value is a straightforward formula based on cashflows isn’t how the market works. Otherwise Amazon would have plummeted in price long ago.
  - qeternity 6y ago
    Buybacks. The other (and more efficient) method to return capital to shareholders is via buybacks, where the company literally hands you cash in exchange for your shares.
    - AznHisoka 6y ago
      That is true though again, not every company does buybacks.
  - saddlerustle 6y ago
    A company might not do a dividends or buybacks now, but if they are successful they are likely to do so eventually, and that expectancy is worth something just the same.

raphaelj 6y ago

Well, Intel income can also go down fast, and that's probably the main reason we see the stock price going down.

battery423 6y ago
Really? As far as i know intel has/had plenty of reserves and is still selling good. The Demand in general is very high. Doyou have any numbers?
- empath75 6y ago
  In the year after the iPhone was announced, blackberry stock tripled to 140 dollars a share. They had record profits and revenue. It’s currently $4. You can be a dead man walking even while your financials are fine.
  - Synaesthesia 6y ago
    The same could be said of nvidia. I don’t think their future is assured by any means.
    - empath75 6y ago
      Nothing is assured, but if you were going to bet, intel’s future seems a lot cloudier. Where do they get growth from?
  - itsoktocry 6y ago
    >In the year after the iPhone was announced... The iPhone was a one-in-a-generation product that upended an industry. Yet I see 10 products being compared to it a week. It may sound cynical to people here, but in the long-run, you'll do a lot better thinking "this is probably not the next iPhone" than having FOMO that every second tech company might be the next Apple.
    - empath75 6y ago

libertine 6y ago

That's why sometimes I wonder if the overlap of "tech" and "stock market" is bad. One deals with concrete things, other deals with speculation. These valuations are references of the stock market - it's almost a measure of popularity, than anything else. Right?

deleted 6y ago
[deleted]
catalogia 6y ago
The overlap of tech and speculation is called "science fiction."

deleted 6y ago

[deleted]

travisporter 6y ago

"Cloud!" made my day! I could totally see this in on a new-age advertising page on a new X as a service website lol

mywittyname 6y ago

Several of those manufactures that you listed are on the verge of bankruptcy (Ford, Nissan, FCA). Auto manufacturing is capital-intensive and extremely high risk and a few bad quarters is all it takes to completely wipe out shareholders. You may not realize this, but GM actually went bankrupt in 09 and shareholders lots everything. Telsa is not going to go bankrupt in the near- or medium-term. There's just too damn much money backing them.

nickik 6y ago
Tesla is also able to have almost positive cash flow on high margin high demand cars in the middle of a pandemic. The other automakers are leaking money like there is no tomorrow. Ford, GM, FCA have a thin wedge of the market that is still profitable for them and that market is under attack, with little indication of them being able to make a huge splash in another market. Not to mention a broader shift in car market and transportation that requires massive investment. If you don't grow, don't make much profit and are risky, meaning a couple of bad quarters almost kill you your stock is not gone be worth much.

gruturo 6y ago

Intel is quite unconvincing on a lot of key aspects (10nm, 7nm, performance after spectre family mitigations, etc) but to me the biggest danger is their inability to commit and persist on pretty much any topic which isn't their mainstream CPU line. They sold Xscale, they sold their modem division (admittedly it was terrible, but I refuse to believe it was unfixable, certainly Apple didn't). This creates hesitation in prospective customers of anything which isn't their mainstream CPU business, reducing them to a one trick pony. And that pony is now having its lunch eaten from both below (ARM) and above (Epyc). Their operating profit and their reserves mean little if prices go down - they are used to fat, lofty margins and I'm not sure they still know how to execute without them. Think about what happens to the shale oil businesses once crude prices approach their extraction costs. You implode very quickly no matter how big you are.

johnvanommen 6y ago
Great summary. And Intel's cost of business is incredibly high. Semiconductor fabs are some of the most expensive factories in the world. Intel is in danger of becoming General Motors, a company that sat by idly while competitors made them obsolete.