Category NVDA

Nvidia Can’t Stop Stocks Wobbling

What we've seen from Nvidia the past 18 months reminds me of Cisco in the late 1990's. I wrote about this recently... not much has changed. The path of earnings and the share price have been similar. NVDA's revenues are up over 2.5x on a YoY basis, causing EPS to be up over 4x over the same period. 18% EPS growth in a single quarter is very impressive but here's my question... will we see that in 2 or 3 years from now? We didn't from CSCO - it collapsed. Time will be the judge of that.... not me. Despite the expected "beat and raise" from the AI chip maker - the rest of the market fell sharply. Without NVDA's ~9% share price gain - the S&P 500 would have been down 1.5% for the day. That tells us how narrow this market is - extremely dependent on stellar earnings from a handful of companies like NVDA. That's not a healthy setup.

Are Semi’s Set to Cool their Gen-AI Heels?

Whilst the technology sector is outperforming the benchmark index this year -- semiconductor stocks have done the bulk of the heavy lifting. And it's not difficult to explain investor FOMO. It's entirely due to the hype around "AI" and specifically something called "Generative AI". For example, in a report by Grand View Research, they valued Gen-AI at ~$13B last year. However, its anticipated CAGR is estimated to be ~36% - which puts the industry hitting $109B by 2030. That's a sharp ramp higher from basically zero two years ago. And today - there a very few chipmakers who produce the GPUs required to meet the insatiable demand. However, is the demand semis are seeing today (and revenue) sustainable long-term? That's unlikely.