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Cisco had a 550bn market cap at the height of the bubble. That's a lot but NVDA is about to overtake Saudi Aramco in market cap. How much revenue can nvidia re
by gizmo 3y ago
Cisco had a 550bn market cap at the height of the bubble. That's a lot but NVDA is about to overtake Saudi Aramco in market cap.
How much revenue can nvidia realistically have 5 years from now, and at what margins? 100bn in revenue (NVIDIA grossed 25bn last year, so 4x top line growth) at 35% gross margins = 35bn. Slap a 25x multiple on that and you have a 900bn market cap. Discounted at 8% to today that's .65 * 900bn is 600bn. Not 2000bn. Are my numbers too pessimistic? Probably.
But still, it's hard to come up with 2029 numbers that justify a 2000bn market cap today. Even with a 5% discount rate NVDA has to be worth 3000bn 5 years from now, for current investors to get a 0% return.
- nickfromseattle 3y ago> (NVIDIA grossed 25bn last year, so 4x top line growth Q4 revenue was $22B, and guiding $24B for Q1, so likely $110Bish revenue in 2024. Their net income should be in the same ballpark as Microsoft / Apple / Amazon / Google in 2024. Meanwhile, Apple / Amazon / Google are growing ~10% YoY, at Nvidia's current growth rate they could surpass Mag7 net income in 2025/2026.
- gizmo 3y agoApple's net income was 97bn last year, Amazon's net income was 10bn. I'm not sure why you would even put those in the same category. Amazon has historically been valued on their free cash flow. For nvidia to have 100bn in net income they would need at at least 200bn in revenue. Apple has 100bn in net income on 400bn in revenue, for comparison. Ultimately the question is whether nvidia's moat (chips + cuda) will be durable. My guess is competitors will arrive soon and that nvidia's margins will go down. Right now nvidia seems untouchable, but reality will set in sometime next year.
- bryanlarsen 3y agowhat I believe are safe predictions (no dates, to make them extra safe). - total market size will go up - Nvidia's market share will go down - Nvidia's profit margin will go down The trillion dollar question then is whether the uplift from #1 is bigger than the downdraft from #2 and #3.
- acchow 3y ago> How much revenue can nvidia realistically have 5 years from now, and at what margins? 100bn in revenue (NVIDIA grossed 25bn last year, so 4x top line growth) at 35% gross margins = 35bn. I think you are off by a year because NVDA’s fiscal year is 1 year ahead. NVDA’s fiscal 2024 just ended (ended Dec 2023) and was announced this week. Their latest quarter (ended Dec 2023, fiscal Q4 2024) had 22.1bn in revenue. That’s more revenue than Cisco’s full year in 2000.
- acchow 3y agoOops I was off by one month. Nvidia’s fiscal 2024 just ended (ended Jan 2024) and was reported this week. They are currently in Q1 2025.