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The current P/E ratio puts Nvidia at 10x that of AMD and Intel. Nvidia is currently charging extortionate prices to all of the big FANG companies. At that poin
by screye 3y ago
The current P/E ratio puts Nvidia at 10x that of AMD and Intel. Nvidia is currently charging extortionate prices to all of the big FANG companies.
At that point, I think it is more likely that the FANGs pour money into a competitor than continuing to pay arm and a leg for eternity.
The thing about enterprise-hardware is that no one has brand loyalty. Nvidia also has a single point of failure. Nvidia is what Google would be if it was "just a search company".
Nvidia will continue existing as one of the behemoths of the tech industry. But, if Nvidia continues to 'only' sell GPUS, then will its stock continue growing with growth expectations sitting at about 3x of every other FANG company ? Unlikely.
- jjoonathan 3y agoNvidia the company will do great, the current batch of NVDA buyers probably won't.
- lumost 3y agoEven with unlimited budget and talent, overcoming 25 years of success is ... difficult. Nvidia employs it's own top-tier folks and now has massive margins to invest. If your goal is to sell an AI product to end-customers, choosing to pick up the R&D cost of building great AI chips as well as training gigantic models and the product R&D to make a product customers love ... is a tall order.
- andrewstuart 3y ago“Years of success” is not a moat. “Years of success” means zero in the technology world. Something better with zero years success can win instantly.
- lumost 3y agoI'd beg to differ, migrations are extraordinarily expensive in Tech. If you have a sky scraper, you don't tear it down and rebuild it when materials become 10% stronger. Big tech firms generally maintain market position for decades. Cisco still remains the networking winner, and IBM still dominates mainframes, Oracle is going strong. AI compute isn't something that snuck up on NVidia, they've built the market.
- renonce 3y ago> migrations are extraordinarily expensive in Tech Is that really the case with Deep Learning? You write a new model architecture in a single file and use a new acceleration card by changing device name from 'cuda' to 'mygpu' in your preferred DL framework (such as PyTorch). You obtain the dataset for training without NVIDIA. You train with NVIDIA to get the model parameters and do inference on whatever platform you want. Once an NVIDIA competitor builds a training framework that works out of the box, how would migrations be expensive?
- lumost 3y ago“Builds a training framework which works out of the box”. This is the hard part. Nvidia has built thousands of optimizations into cudnn/cuda. They contribute to all of the major frameworks and perform substantial research internally. It’s very difficult to replicate an ecosystem of hundreds to thousands of individual contributors working across 10+ years. In theory you could use google/AMD offerings for DL, but for unmysterious reasons no one does.
- Fnoord 3y agoYep just look at SGI and Sun and all that.
- jrockway 3y agoHow effective has this been in the past, though? Everyone kind of did their hedging about switching to ARM because Intel wanted too much money, but Intel still seems to be the default on every cloud provider. AMD kind of came back out of nowhere and kept x86_64 viable, which seems to be more helpful to Intel than hurtful. Basically, the only proven strategy is to wait for AMD to blow up the competition on their own accord. Even then, "hey no need to rewrite your code, you could always buy a compatible chip from AMD" doesn't seem that bad for Intel. But, maybe Nvidia has better IP protections here, and AMD can't introduce a drop-in replacement, so app developers have to "either or" Nvidia/AMD.
- Miraste 3y agoAt the risk of eating my words later: AMD will never be competitive with Nvidia. They don't have the money, the talent, or the strategy. They haven't had a competitive architecture at the top end (i.e. enterprise level) since the ATI days. The only way they could take over AI at this point is if Jensen leaves and the new CEO does an Intel and fails for fifteen years straight.
- htrp 3y ago> The only way they could take over AI at this point is if Jensen leaves and the new CEO does an Intel and fails for fifteen years straight. If Jensen becomes the CEO of AMD.... maybe they'll be competitive in 10 years.
- vGPU 3y agoThat’s exactly what people said about AMD before. Then bulldozer and threadripper showed up.
- Miraste 3y agoRight, and Zen (I'm assuming you mean Zen) was great--but it succeeded only because Intel did nothing for years and put themselves in a position to fail. If Intel had tried to improve their products instead of firing their senior engineers and spending the R&D money on stock buybacks, it wouldn't have worked. We can see this in action: RDNA has delivered Zen-level improvements (actually, more) to AMD's GPUs for several years and generations now. It's been a great turnaround technically, but it hasn't helped, because Nvidia isn't resting on their laurels and posted bigger improvements, every generation. That's what makes the situation difficult. There's nothing AMD can do to catch up unless Nvidia starts making mistakes.
- runako 3y agoThis is conflating what happens in the stock market with what happens in the market for its products. Those two are related, but not as much as one might think. A solid parallel is Intel, which continues to dominate CPU sales even as its stock has not performed well. You may not want to own INTC, but you will directly or indirectly use an Intel product every day. Intel's supremacy continues, even after the transition to hyperscaler clouds.