3 ms·

Industry estimate is that Nvidia market share declines 75% in 2027-2028. If the AI hype is real, then Nvidia revenue is $300 billion in 5 years. Assuming P/E

by nabla9 3y ago

Industry estimate is that Nvidia market share declines 75% in 2027-2028. If the AI hype is real, then Nvidia revenue is $300 billion in 5 years. Assuming P/E 25 would mean $7.5 trillion valuation. That sounds insane. If hype is 1/3 true, Nvidia grows 17% per year and is valued $2.5 trillion in five years. ps. Intel vs. AMD is not completely symmetric competition because AMD is fabless and Intel is not. While AMD gets better margins, Intel can produce volumes to match demand. AMD competes directly with Apple, Nvidia, ARM,.. for TSMC fab capacity (I know Intel also buys manufacturing from TSMC).

bonton89 3y ago
Until Intel actually releases a discrete GPU on an Intel process instead of the same TSMC everyone else is using their fab advantage remains a theoretical one in this space. It is to bad they didn't have even a power sucking discrete GPU available built on one of their older processes during the previous GPU shortage since they'd at least have a strong install base right now by simple virtue of being able to put out a large supply.
- nabla9 3y ago
  Intel vs. AMD was abut CPU's not GPUS. Intel still has > 70% market share in server CPUs where it once had almost 99% market share.
adam_arthur 3y ago
P/E is a ratio on earnings, not sales. 25 * $300B (revenue) = $7.5T, yes. But that's using a P/S multiple, not P/E. Your math makes sense if you assume Nvidia will have 25x P/S... which historically is very high, and unlikely to be the "correct" multiple after all of that growth has already occurred. Unless you expect them to continue growing at same CAGR in perpetuity. Also, very unlikely they will maintain that kind of market share if they reach those valuations. A relatively simple software solution to improve integration with AMD/Intel/TPU offerings that is worth trillions is a bit of a no brainer. It wasn't a financial prerogative until recently, so yes, all the competitor software here sucks, today. Compute is fungible, despite what many say here. The cost differential between implementing good software support for AMD and paying Nvidia ~98% gross margin makes it kind of obvious. A bull case could still see NVDA at a few trillion 5-10 years out... very unlikely it would go much beyond that. I fail to see any remotely rationally made, objective, case for it. At least not one that warrants investing in Nvidia today, at the current valuation, versus other opportunities It can still be a multi-bagger in the short-term due to what looks like dotcom 2.0 enthusiasm.

by nabla9 3y ago

bonton89 3y ago

Until Intel actually releases a discrete GPU on an Intel process instead of the same TSMC everyone else is using their fab advantage remains a theoretical one in this space. It is to bad they didn't have even a power sucking discrete GPU available built on one of their older processes during the previous GPU shortage since they'd at least have a strong install base right now by simple virtue of being able to put out a large supply.

nabla9 3y ago
Intel vs. AMD was abut CPU's not GPUS. Intel still has > 70% market share in server CPUs where it once had almost 99% market share.

adam_arthur 3y ago

P/E is a ratio on earnings, not sales. 25 * $300B (revenue) = $7.5T, yes. But that's using a P/S multiple, not P/E. Your math makes sense if you assume Nvidia will have 25x P/S... which historically is very high, and unlikely to be the "correct" multiple after all of that growth has already occurred. Unless you expect them to continue growing at same CAGR in perpetuity. Also, very unlikely they will maintain that kind of market share if they reach those valuations. A relatively simple software solution to improve integration with AMD/Intel/TPU offerings that is worth trillions is a bit of a no brainer. It wasn't a financial prerogative until recently, so yes, all the competitor software here sucks, today. Compute is fungible, despite what many say here. The cost differential between implementing good software support for AMD and paying Nvidia ~98% gross margin makes it kind of obvious. A bull case could still see NVDA at a few trillion 5-10 years out... very unlikely it would go much beyond that. I fail to see any remotely rationally made, objective, case for it. At least not one that warrants investing in Nvidia today, at the current valuation, versus other opportunities It can still be a multi-bagger in the short-term due to what looks like dotcom 2.0 enthusiasm.