원문 보기
is Nvidia stock in nosebleed territory well that's not my words that's actually what one of the earlier investors in Nvidia Stanley dren Miller said about Nvidia stock and that was when shares were trading below $400 per share as I'm recording Shares are nearly $800 per share and it's hard to argue that nvidia's nose bed valuation hasn't gotten even worse but it's the context behind dren Miller's comments and also comments over the past week from Brad gersner of ultimeter capital that I think investors need to thinking about because these investors these hedge fund investors are not buying Nvidia and trying to hold it for the next 10 20 years as a long-term investment they are looking at is there going to be buyers of Nvidia stock at a higher price in the future are estimates for the next quarter or two a little bit too low and as duck and Miller compared it to is the bubble in AI going to inflate for another 2 or 3 years that's what those investors are investing in so if that's the type of of trading that you're doing that's great but at asymmetric investing I'm looking for long-term Investments that you can buy and hold companies that valuation is going to be a Tailwind rather than buying companies that are trading for 20 times next year's sales which Nvidia is right now so I'm going to get to some of the comments and then some of the numbers behind this because I think valuation is really something we need to start thinking about with a company like Nvidia because there's a lot of factors that could push the stock sharply lower if number aren't hit my name is Travis ham thanks for watching asymmetric investing Please Subscribe here on YouTube for all my content and thanks to this video sponsor the monly fool if you go to fool.com ym they'll give you their top 10 stocks to buy right now so let's get to some of dren Miller's comments and like I said these were made a little while ago at a conference with Bloomberg he said it's true it's 380 or 390 it's in no nosebleed territory talking about nvidia's valuation now he was buying shares more closer to $100 per share so at that point the stock was up about 4X in value makes up about 14% of the fund that dren Miller runs at least at the end of the third quarter of 2023 now we have we don't have the numbers yet for the fourth quarter but that value would likely go up in the fund and at least at that time he was indicating that he thought there was a lot of Runway ahead even the dot bubble lasted to 2 and 1/2 years Nvidia is something we're going to want to own for at least 2 or 3 years not 10 months saying that if this was a secular move or a long-term move towards artificial intelligence this was going to be something that he was going to want to own for at least a little while longer now the interesting context with those comments is that he's comparing it to the dotcom bubble and specifically brought up Sun Microsystems and Cisco those were two of the hottest stocks in the dotom bubble and they were two of the stocks that fell the most during the dot crash now those comparisons are pertinent I think in this case because of the valuation increases that happened during the Doom public here's a here's a chart of Cisco system stock and you can see that the stock went absolutely crazy during 1998 99 and even into early 2000 but then what happened between mid 2000 when the stock peaked and the bottom which didn't happen for more than two years the stock was down about 90% Sun Microsystems didn't even last as a public company for another decade after this it was acquired by Oracle so these are the companies that were the hottest names in the two in the late '90s and early 2000s they were arguably the best businesses in the internet at that period of time but the internet was still sorting itself out we were in bubble territory where people are just speculating on anything internet related and this is what Dr and Miller is comparing Nvidia and artificial intelligence to today this isn't to say that there's nothing behind artificial intelligence or to say that Nvidia is a bad business their performance has been absolutely phenomenal but what should you pay for it and what should you pay for the growth that we're seeing today this is really the challenge for investors and right now Nvidia is trading for about 20 times next year's sales or Enterprise Value to sales multiple and the forward price to earnings multiple is 36 there's a lot of reasons to think those earnings are inflated because Nvidia is charging extremely high prices particularly for the h100 chips that it's making on top of that a lot of its competitors are starting to make their own artificial intelligence chips and on top of that a lot of their customers are starting to make their own artificial intelligence chips the companies disclose that almost 25% of Revenue comes from two buyers those are likely meta and Microsoft and who's developing their own artificial intelligence chips to put into their own data centers meta and Microsoft so these kinds of things were happening in the internet and people knew about it in the late '90s and early 2000s but they were making but what duck and Miller is talking about is not the fundamental future of nvidia's business what he's talking about is where is the stock price going over the next two to three years is this bubble inflating or deflating and I think that's where we get into really dangerous territory as investors I want to be thinking about what is a business going to be doing long term are earnings going to go up sustainably over time are they in a structural decline with Nvidia I simply don't know how quickly earnings are going to increase from here but dren Miller himself called this nose bed territory he just thinks that the bubble is going to continue inflating for a while and so that's where I get very worried as investor Brad gersner from altimer actually brought some interesting comments to light this week because it showed where he's viewing Invidia in the current market and how longterm he's thinking about the company's performance thanks to our friends at the monly fool for sponsoring this video visit fool.com ym for the top 10 stocks to buy right now on CNBC gersner said that their Channel checks indicate that orders are still really strong for NVIDIA in 2024 people are still buying their h100 chips and there doesn't appear to be any slowdown there that's why he is saying this is still a leader in artificial intelligence and if you want to make a betat a word that he used not an investment but a bet on the future of artificial intelligence Nvidia is the place to be but he also had some words of caution if Nvidia misses their numbers or the expectations that the market has hit then the stock could drop extremely quickly so let's talk about some of those expectations this is a look at what analysts are expecting from nvidia's revenue and then earnings per share through fiscal 2026 which ends the end which ends in January 2026 so what two years from now you can see that the average estimate from a revenue perspective is $11 billion in Revenue the thing about that is that that means that Nvidia stock is still trading for about 17 times fiscal 2026 revenue from an earnings perspective investors are expecting $22.71 per share in earnings in fiscal 2025 that would be nearly a double from $12.31 which is the estimate for fiscal 2024 and then another increase to $257 cents in 2026 so expecting Revenue to continue growing and margins to Main aain where they are today the bar is extremely high for NVIDIA to hit and the company has not only hit it but exceeded that over the past two years and that's I think what is making investors so bullish and interested in artificial intelligence but I mentioned earlier that there's going to be a lot of competition coming to this Market you don't just create a 10 billion do Market in artificial intelligence chips out of basically nowhere and not have all kinds of competitors and customers try to come after that market so I think the risk is if margins come down Revenue growth slows you're suddenly paying 15 20 times sales for a company whose business maybe isn't growing the way that it has over the past two years so these big investors that own major positions in Nvidia are not necessarily playing the long-term game with this company what do they think about Nvidia 3 four five years from now it doesn't necessarily matter because what they're worried about is are they going to hit their numbers this quarter and maybe next quarter and is this bubble going to continue inflating and that's what I took from those comments from Stanley dren Miller and for Brad gersner at altimer Capital both phenomenal investors but they are not playing the same game that we're playing as retail investors if they decide to get out of Nvidia if their Channel checks remember they are talking to people into the in the industry about how many orders are going through for envidia chips what sort of venture capital money is being invested in AI companies what are price PR for chips are they going up or down all of this information is information that they're gathering on their side and if they decide that the numbers are moving south they're not going to tell retail investors before they decide to sell we're going to find out later and end up holding the bag so that's a risk something we all need to be aware of with a company that even some of the biggest investors say is in bubble territory like I said not a comment on nvidia's as a company which I think is a phenomenal company incredibly well-run I would love to own shares but I'm not going to pay the current price for NVIDIA as a business be happy to buy Nvidia after the bubble burst what do you think about Nvidia stock today leave your comments in the comment section below don't forget to subscribe to asymmetric investing thanks for watching everybody see you next time
Comments 0