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> Making real physical things just doesn't scale, Nvidia sells chips ...

chad1n 2y ago
Investors don't even know what NVIDIA is selling, I was listening to a random investor podcast and they were talking about Intel, AMD and NVIDIA, but no one knew what exactly they are selling, they only knew they are part of this AI bubble so that's why you should invest in them
- petra 2y ago
  What about seroous analysts, say like morningstar, don't the undedtand the business that they recommended relatively well?
CapeTheory 2y ago
They can't make them fast enough to satisfy hype-driven demand; they are not scaling like a tech company, but their market cap is being inflated like one.
- lucianbr 2y ago
  What is the meaning of "tech" in this context? "Software"? I mean, if Nvidia isn't a technology company...
  - CapeTheory 2y ago
    Sorry should have said "big tech", as commonly used to refer to FAANG companies who focus more on software and/or services.
dukeyukey 2y ago
Nvidia is a fabless chip designer. They design chips and software to go with the chips, but contract out the actual manufacturing.
- zzbn00 2y ago
  Yes, they buy these chips from fabs (made to their design) but it is the chips they then sell on, at about a 4x markup to what they bought them for. Good business model! Buy low, sell high. Whether good enough to justify current valuation is another question.
kuschku 2y ago
How much of Nvidia's value do you think comes from the chips? Chips are a commodity, AMD's chips have been better and cheaper than Nvidia for many years. The reason Nvidia's value has been so inflated is the software stack and the lock-in they offer. CUDA, CuDNN, that's where Nvidia's value lies. And obviously, now that all relevant ML frameworks are designed for Nvidia's software stack, Nvidia has a monopoly on the supply. That's why their value is being inflated so much. And Nvidia doesn't have produce the chips themselves, that's all contracted out as well.

Investors don't even know what NVIDIA is selling, I was listening to a random investor podcast and they were talking about Intel, AMD and NVIDIA, but no one knew what exactly they are selling, they only knew they are part of this AI bubble so that's why you should invest in them

petra 2y ago
What about seroous analysts, say like morningstar, don't the undedtand the business that they recommended relatively well?

CapeTheory 2y ago

They can't make them fast enough to satisfy hype-driven demand; they are not scaling like a tech company, but their market cap is being inflated like one.

lucianbr 2y ago
What is the meaning of "tech" in this context? "Software"? I mean, if Nvidia isn't a technology company...
- CapeTheory 2y ago
  Sorry should have said "big tech", as commonly used to refer to FAANG companies who focus more on software and/or services.

dukeyukey 2y ago

Nvidia is a fabless chip designer. They design chips and software to go with the chips, but contract out the actual manufacturing.

zzbn00 2y ago
Yes, they buy these chips from fabs (made to their design) but it is the chips they then sell on, at about a 4x markup to what they bought them for. Good business model! Buy low, sell high. Whether good enough to justify current valuation is another question.

kuschku 2y ago

How much of Nvidia's value do you think comes from the chips? Chips are a commodity, AMD's chips have been better and cheaper than Nvidia for many years. The reason Nvidia's value has been so inflated is the software stack and the lock-in they offer. CUDA, CuDNN, that's where Nvidia's value lies. And obviously, now that all relevant ML frameworks are designed for Nvidia's software stack, Nvidia has a monopoly on the supply. That's why their value is being inflated so much. And Nvidia doesn't have produce the chips themselves, that's all contracted out as well.