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2021-11-16

I dont know where these clowns come from. With the next tech revolutionary about to begin with metaverse and other stuffs, graphics card platform is gonna boom very soon. Also their upcoming design for EV automakers definitely going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately this company is going for 1T market cap. Dont bother about these clowns.

Nvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade

2021-11-09

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With the next tech revolutionary&nbsp; about to begin with metaverse&nbsp; and other stuffs, graphics card platform&nbsp; is gonna boom very soon. Also their upcoming design for EV automakers definitely&nbsp; going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately&nbsp; this company is going for 1T market cap. Dont bother about these clowns.","listText":"I dont know where these clowns come from. With the next tech revolutionary&nbsp; about to begin with metaverse&nbsp; and other stuffs, graphics card platform&nbsp; is gonna boom very soon. Also their upcoming design for EV automakers definitely&nbsp; going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately&nbsp; this company is going for 1T market cap. Dont bother about these clowns.","text":"I dont know where these clowns come from. With the next tech revolutionary about to begin with metaverse and other stuffs, graphics card platform is gonna boom very soon. Also their upcoming design for EV automakers definitely going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately this company is going for 1T market cap. Dont bother about these clowns.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":9,"commentSize":2,"repostSize":0,"link":"https://laohu8.com/post/871158765","repostId":"1160740007","repostType":2,"repost":{"id":"1160740007","pubTimestamp":1637034481,"share":"https://www.laohu8.com/m/news/1160740007?lang=&edition=full","pubTime":"2021-11-16 11:48","market":"us","language":"en","title":"Nvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade","url":"https://stock-news.laohu8.com/highlight/detail?id=1160740007","media":"seekingalpha","summary":"Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competit","content":"<p>Summary</p>\n<ul>\n <li>There is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.</li>\n <li>In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years.</li>\n <li>At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</li>\n</ul>\n<p><b>Introduction</b></p>\n<p>Nvidia's (NVDA) share price has followed a parabolic trend over the last few weeks, even in a logarithmic chart. In addition to the prolonged growth that accompanied the general optimistic stock market sentiment and the hype around tech stocks, we now see a short-term growth spurt. However, with the recent growth that has carried the company to a market cap of $760 billion, the stock has finally become a speculative bubble, joining all the other meme stocks. Thus, with Nvidia, I think we see how little an excellent business model has to do with an excellent investment. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</p>\n<p>Nothing but expectations</p>\n<p>Recently, hype sentiment has carried the share upwards. For this hype sentiment, theMetaverse/Omniverse, AI, and the Arm deal were the main reasons for exuberant optimism among Nvidia bulls.</p>\n<p>The company created a lot of excitement around its appearance at the GTC conference and the introduction of the omniverse platform. With this platform, Nvidia wants to create virtual worldsin particular:</p>\n<blockquote>\n Omniverse - a platform that serves as the connective tissue for physically accurate 3D virtual worlds - is gaining new features such as AR, VR and multi-GPU rendering, as well as integrations for infrastructure and industrial digital-twin applications with software from Bentley Systems and Esri.\n</blockquote>\n<blockquote>\n Omniverse enables engineers and designers to build physically accurate digital twins of buildings and products, or create massive, true-to-reality simulation environments for training robots or autonomous vehicles before they're deployed in the physical world.\n</blockquote>\n<p>The goal behind Omniverse is to create an ecosystem that is used by many industries worldwide. What is particularly exciting is that companies can create virtual twins of reality. The areas of application are manifold. For example, companies can test their products in this virtual world. It doesn't matter whether it's telecommunications companies that want to try the range of their transmission towers or data connection tools or car manufacturers that want to test the characteristics of cars in a real-life virtual environment. Instead of driving on a test track, the tests can take place in a virtual world. Awesome!</p>\n<p>What bugs me about this, however, are the many buzzwords. All these flowering words about quantum computers, AI, cyber security, etc., run through the entire (but otherwise fascinating and worth seeing) presentation. Of course, investors always need to clean up such presentations of all the advertising and touting to grasp the realistic opportunities. In the end, I think we are getting into the future that Nvidia is drawing for us. It may look different here and there, but the opportunities and monetization possibilities around virtual reality or virtual twins will be enormous and catapult us into the post-Internet age.</p>\n<p>But that brings us to the point. You don't have to have owned Microsoft (MSFT) shares in 2000 to see the parallels. With Microsoft, as with many Internet stocks, there was great euphoria about the future of the Internet and the associated (disruptive)business opportunities:</p>\n<blockquote>\n Before the dot.com or tech bubble burst, investors were convinced of the possibilities of the Internet, digitalization, and technical progress. Microsoft, it seemed, was the gatekeeper to this world with its Windows operating system and the Internet Explorer. The investors saw themselves at the beginning of a vast cycle. And Microsoft was able to keep its promises. By 1999, the company had increased its annual revenue by 30%. Besides, Microsoft was profitable even then and was able to increase its profits more than five-fold from 1995 to 2000.\n</blockquote>\n<blockquote>\n <img src=\"https://static.tigerbbs.com/60a717d69de6b7f73e2ac4764f6e2d5f\" tg-width=\"640\" tg-height=\"150\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">\n</blockquote>\n<blockquote>\n <i>Microsoft revenue &amp; EPS from 1995-2001; taken from MSFT investor relation/graph by author</i>\n</blockquote>\n<blockquote>\n But then, the bubble started to burst, and Judge Thomas Penfield Jacksondecidedthat Microsoft had violated the Sherman Antitrust Act due to abusive behavior, which only accelerated the bursting of the tech bubble. You know the rest of the story.\n</blockquote>\n<p>As with Microsoft in the dot.com bubble, the problem I see with Nvidia is that investors are euphorically betting on something that does not yet exist. So much of this future is currently priced into the share price without it even being clear what will end up in shareholders' pockets in the form of profits, cash flows, or dividends. Think of all the dot.com bubbles that burst even though companies like Cisco (CSCO) or Microsoft could deliver on their growth promises. Here we see the classic difference between companies and investments. An investment in a terrific company can still be a bad investment if the price is too high. If investors now buy Nvidia because of the Omniverse, it is nothing but a big gamble.</p>\n<p>And then, of course, there is Nvidia's classic business around the GPU and the Tegra processors. Here Nvidia is very successful. But this business is anything but a moat. Yes, Nvidia was able to increase sales and profits with it massively. The company has benefited primarily from the fact that the architecture of GPUs is superior to that of pure CPUs, such as those offered by Intel (INTC), for many applications such as high-performance computing, gaming, and servers.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f665c228fc6b50397b6fe547b6c1dbb3\" tg-width=\"640\" tg-height=\"322\" width=\"100%\" height=\"auto\"><span>Source:Investor presentation</span></p>\n<p>Now Nvidia is looking to gain a foothold in the CPU market with the $40 billion Arm acquisition, using Arm's business model to secure the company's licenses. The Arm architecture is a key technology, especially for the entire smartphone industry. Arm is the architecture behind the SoCs used in virtually all smartphones and most tablet computers.</p>\n<p>But it is not at all clear whether the deal will go through and at what price. Competition authorities such as the&nbsp;British CMA see considerable competition concerns&nbsp;and will presumably tie approval to significant concessions. Even if Nvidia does get clearance, the competition watchdogs will closely look at licensing practices. Unfortunately for Nvidia, and even though Arm does not make chips, the current chip shortage is prompting competition authorities to scrutinize the merger even more closely as the entire chip industry comes under scrutiny.</p>\n<p>In short, the Arm deal may ultimately bring more advantages than disadvantages for Nvidia, but it is uncertain to what extent advance praise is justified here. Investors should not forget that the competition is not sleeping. Qualcomm, in particular, is very active right now and has made a significant strategic move with the NUVIA acquisition. I have already written about NUVIAhereandhere, which Qualcomm acquired for $1.4 billion:</p>\n<blockquote>\n And then there's the startup NUVIA, which former Apple employees founded. CEO Amon wants to attack Apple's M1 processors with the acquired start-up and enter the laptop market next year. Qualcomm had previously tried integrating a smartphone SoC into a notebook with only minor modifications and okayish results.\n</blockquote>\n<blockquote>\n But now Qualcomm wants to release a Nuvia SoC based on ARM architecturenext year. This step would reduce Qualcomm's dependency on ARM and Nvidia enormously. Conversely, Qualcomm does not have much to lose since it can still license ARM technology from Nvidia in an emergency. The competition authorities will probably look particularly closely at the takeover of ARM by Nvidia to ensure that Nvidia does not put Qualcomm or other potential licensees at a disadvantage with too high license fees.\n</blockquote>\n<blockquote>\n The first comparisons of NUVIA's Phoenix chip to other chip suppliers already show a significant outperformance:\n</blockquote>\n<blockquote>\n <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/24cf0a0daa9c8b638e461a9bdaf0d1a9\" tg-width=\"640\" tg-height=\"407\" width=\"100%\" height=\"auto\"><span>Source:Nuvia Webpage</span></p>\n</blockquote>\n<p>Most recently, Qualcomm has been very optimistic about the prospects around the NUVIA deal:</p>\n<blockquote>\n We are pleased with the strong market validation of Arm-based personal computing in the industry transition to a new SoC architecture. We're more confident than ever in the connected computing opportunity, our upcoming solutions powered by our NUVIA CPUs, and our collaboration with Microsoft. We're also seeing increased traction in consumer electronics.\n</blockquote>\n<p>So it is not that Nvidia will single-handedly dominate the Arm market. The competitive pressure is no less in the other business areas either. Above all, the eternal GPU competitor AMD (AMD) will continue to put pressure on the company. In autonomous driving, Intel is a heavyweight competitor alongside Tesla (TSLA), following its acquisition of the Israeli companyMobileye for over $15 billion in 2017.</p>\n<p>Managing expectations</p>\n<p>With a P/E ratio of over 100, Nvidia would have to quadruple its profits to reach a valuation of 25, which is reasonable for a growth company. And admittedly, Nvidia has already achieved such growth.</p>\n<p>Nevertheless, investors who invest in Nvidia now are speculating that Nvidia will increase its profits in the same way for the coming years. Of course, the company has already managed such developments in the past. In 2005, Nvidia was able to push its earnings per share from $0.05 to $0.33 within three years, which corresponds to a six-fold increase. But already in 2009 and 2010, Nvidia made losses. Only in 2017, it was it able to lift EPS above the 2008 level. Investors have to face it: profit increases are not a one-way street, especially not in the tech sector. And even analysts do not expect Nvidia to increase profits fast enough to reach reasonable valuation levels based on the current share price over the following years. In 2020, adjusted EPS was $2.50. Below you see expected earnings for the subsequent years, and you can also see that even the most optimistic analyst out of 19 surveyed does not expect Nvidia to achieve EPS higher than $7.25 in 2024.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0d1916e5f56a5eee93d4c1c93e254afc\" tg-width=\"640\" tg-height=\"384\" width=\"100%\" height=\"auto\"><span>Source: www.dividendStocks.Cash</span></p>\n<p>So we are far from saying that Nvidia will reach reasonable multiples in the next 4, 5, or 6 years based on today's share price. Even if we set the fair P/E multiple at 40. Considering the expected earnings, this results in an overvaluation of almost 30% even until 2024.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7635beca779966b95afc457e2942d3f3\" tg-width=\"640\" tg-height=\"340\" width=\"100%\" height=\"auto\"><span>Source: www.dividendStocks.Cash</span></p>\n<p>Even when looking at a DCF analysis, we see the apparent overvaluation and massive downside potential. Below you can see the expectations for the sales development until 2024.</p>\n<p><img src=\"https://static.tigerbbs.com/334c1692ae1a107d16b6c981312c34fb\" tg-width=\"635\" tg-height=\"417\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"></p>\n<p>For the DCF analysis, I even assume a much more optimistic scenario where the company will increase sales significantly higher. I also assume an improvement in margins.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0ff075390e6e0c070e102d3010f93296\" tg-width=\"640\" tg-height=\"391\" width=\"100%\" height=\"auto\"><span>Source:alphaspread.com/estimates by author</span></p>\n<p>Based on these figures and assuming a discount rate of 9%, we see that Nvidia is overvalued by 50 percent, which is essentially in line with the fundamental valuation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/71fe4a0463babd595f753a0776e80efd\" tg-width=\"376\" tg-height=\"383\" width=\"100%\" height=\"auto\"><span>Source: alphaspread.com/estimates by author</span></p>\n<p>Investors should not forget that we could also see a change in interest rates next year. A discount rate of 9 percent could therefore be far too low. To remind you, the cost of equity was already 10 percent for Nvidia at the end of 2019. So what happens if we continue to take an optimistic growth scenario but increase the discount rate to 12 percent?</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1e8d3231ad0480f4042265afdcf2911d\" tg-width=\"640\" tg-height=\"226\" width=\"100%\" height=\"auto\"><span>Source:Discount rate history for Nvidia</span></p>\n<p>You can see the result here: The Nvidia share would then be overvalued by almost 75 percent.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4b3b3bab8c4014934702ed6382e76202\" tg-width=\"379\" tg-height=\"384\" width=\"100%\" height=\"auto\"><span>Source: alphaspread.com/estimates by author</span></p>\n<p>Conclusion</p>\n<p>There is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector. In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-11-16 11:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.\nIn my view, Nvidia does not offer a good risk/reward ratio as an investment ...</p>\n\n<a href=\"https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NVDA":"英伟达"},"source_url":"https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1160740007","content_text":"Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.\nIn my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years.\nAt its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.\n\nIntroduction\nNvidia's (NVDA) share price has followed a parabolic trend over the last few weeks, even in a logarithmic chart. In addition to the prolonged growth that accompanied the general optimistic stock market sentiment and the hype around tech stocks, we now see a short-term growth spurt. However, with the recent growth that has carried the company to a market cap of $760 billion, the stock has finally become a speculative bubble, joining all the other meme stocks. Thus, with Nvidia, I think we see how little an excellent business model has to do with an excellent investment. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.\nNothing but expectations\nRecently, hype sentiment has carried the share upwards. For this hype sentiment, theMetaverse/Omniverse, AI, and the Arm deal were the main reasons for exuberant optimism among Nvidia bulls.\nThe company created a lot of excitement around its appearance at the GTC conference and the introduction of the omniverse platform. With this platform, Nvidia wants to create virtual worldsin particular:\n\n Omniverse - a platform that serves as the connective tissue for physically accurate 3D virtual worlds - is gaining new features such as AR, VR and multi-GPU rendering, as well as integrations for infrastructure and industrial digital-twin applications with software from Bentley Systems and Esri.\n\n\n Omniverse enables engineers and designers to build physically accurate digital twins of buildings and products, or create massive, true-to-reality simulation environments for training robots or autonomous vehicles before they're deployed in the physical world.\n\nThe goal behind Omniverse is to create an ecosystem that is used by many industries worldwide. What is particularly exciting is that companies can create virtual twins of reality. The areas of application are manifold. For example, companies can test their products in this virtual world. It doesn't matter whether it's telecommunications companies that want to try the range of their transmission towers or data connection tools or car manufacturers that want to test the characteristics of cars in a real-life virtual environment. Instead of driving on a test track, the tests can take place in a virtual world. Awesome!\nWhat bugs me about this, however, are the many buzzwords. All these flowering words about quantum computers, AI, cyber security, etc., run through the entire (but otherwise fascinating and worth seeing) presentation. Of course, investors always need to clean up such presentations of all the advertising and touting to grasp the realistic opportunities. In the end, I think we are getting into the future that Nvidia is drawing for us. It may look different here and there, but the opportunities and monetization possibilities around virtual reality or virtual twins will be enormous and catapult us into the post-Internet age.\nBut that brings us to the point. You don't have to have owned Microsoft (MSFT) shares in 2000 to see the parallels. With Microsoft, as with many Internet stocks, there was great euphoria about the future of the Internet and the associated (disruptive)business opportunities:\n\n Before the dot.com or tech bubble burst, investors were convinced of the possibilities of the Internet, digitalization, and technical progress. Microsoft, it seemed, was the gatekeeper to this world with its Windows operating system and the Internet Explorer. The investors saw themselves at the beginning of a vast cycle. And Microsoft was able to keep its promises. By 1999, the company had increased its annual revenue by 30%. Besides, Microsoft was profitable even then and was able to increase its profits more than five-fold from 1995 to 2000.\n\n\n\n\n\nMicrosoft revenue & EPS from 1995-2001; taken from MSFT investor relation/graph by author\n\n\n But then, the bubble started to burst, and Judge Thomas Penfield Jacksondecidedthat Microsoft had violated the Sherman Antitrust Act due to abusive behavior, which only accelerated the bursting of the tech bubble. You know the rest of the story.\n\nAs with Microsoft in the dot.com bubble, the problem I see with Nvidia is that investors are euphorically betting on something that does not yet exist. So much of this future is currently priced into the share price without it even being clear what will end up in shareholders' pockets in the form of profits, cash flows, or dividends. Think of all the dot.com bubbles that burst even though companies like Cisco (CSCO) or Microsoft could deliver on their growth promises. Here we see the classic difference between companies and investments. An investment in a terrific company can still be a bad investment if the price is too high. If investors now buy Nvidia because of the Omniverse, it is nothing but a big gamble.\nAnd then, of course, there is Nvidia's classic business around the GPU and the Tegra processors. Here Nvidia is very successful. But this business is anything but a moat. Yes, Nvidia was able to increase sales and profits with it massively. The company has benefited primarily from the fact that the architecture of GPUs is superior to that of pure CPUs, such as those offered by Intel (INTC), for many applications such as high-performance computing, gaming, and servers.\nSource:Investor presentation\nNow Nvidia is looking to gain a foothold in the CPU market with the $40 billion Arm acquisition, using Arm's business model to secure the company's licenses. The Arm architecture is a key technology, especially for the entire smartphone industry. Arm is the architecture behind the SoCs used in virtually all smartphones and most tablet computers.\nBut it is not at all clear whether the deal will go through and at what price. Competition authorities such as the British CMA see considerable competition concerns and will presumably tie approval to significant concessions. Even if Nvidia does get clearance, the competition watchdogs will closely look at licensing practices. Unfortunately for Nvidia, and even though Arm does not make chips, the current chip shortage is prompting competition authorities to scrutinize the merger even more closely as the entire chip industry comes under scrutiny.\nIn short, the Arm deal may ultimately bring more advantages than disadvantages for Nvidia, but it is uncertain to what extent advance praise is justified here. Investors should not forget that the competition is not sleeping. Qualcomm, in particular, is very active right now and has made a significant strategic move with the NUVIA acquisition. I have already written about NUVIAhereandhere, which Qualcomm acquired for $1.4 billion:\n\n And then there's the startup NUVIA, which former Apple employees founded. CEO Amon wants to attack Apple's M1 processors with the acquired start-up and enter the laptop market next year. Qualcomm had previously tried integrating a smartphone SoC into a notebook with only minor modifications and okayish results.\n\n\n But now Qualcomm wants to release a Nuvia SoC based on ARM architecturenext year. This step would reduce Qualcomm's dependency on ARM and Nvidia enormously. Conversely, Qualcomm does not have much to lose since it can still license ARM technology from Nvidia in an emergency. The competition authorities will probably look particularly closely at the takeover of ARM by Nvidia to ensure that Nvidia does not put Qualcomm or other potential licensees at a disadvantage with too high license fees.\n\n\n The first comparisons of NUVIA's Phoenix chip to other chip suppliers already show a significant outperformance:\n\n\nSource:Nuvia Webpage\n\nMost recently, Qualcomm has been very optimistic about the prospects around the NUVIA deal:\n\n We are pleased with the strong market validation of Arm-based personal computing in the industry transition to a new SoC architecture. We're more confident than ever in the connected computing opportunity, our upcoming solutions powered by our NUVIA CPUs, and our collaboration with Microsoft. We're also seeing increased traction in consumer electronics.\n\nSo it is not that Nvidia will single-handedly dominate the Arm market. The competitive pressure is no less in the other business areas either. Above all, the eternal GPU competitor AMD (AMD) will continue to put pressure on the company. In autonomous driving, Intel is a heavyweight competitor alongside Tesla (TSLA), following its acquisition of the Israeli companyMobileye for over $15 billion in 2017.\nManaging expectations\nWith a P/E ratio of over 100, Nvidia would have to quadruple its profits to reach a valuation of 25, which is reasonable for a growth company. And admittedly, Nvidia has already achieved such growth.\nNevertheless, investors who invest in Nvidia now are speculating that Nvidia will increase its profits in the same way for the coming years. Of course, the company has already managed such developments in the past. In 2005, Nvidia was able to push its earnings per share from $0.05 to $0.33 within three years, which corresponds to a six-fold increase. But already in 2009 and 2010, Nvidia made losses. Only in 2017, it was it able to lift EPS above the 2008 level. Investors have to face it: profit increases are not a one-way street, especially not in the tech sector. And even analysts do not expect Nvidia to increase profits fast enough to reach reasonable valuation levels based on the current share price over the following years. In 2020, adjusted EPS was $2.50. Below you see expected earnings for the subsequent years, and you can also see that even the most optimistic analyst out of 19 surveyed does not expect Nvidia to achieve EPS higher than $7.25 in 2024.\nSource: www.dividendStocks.Cash\nSo we are far from saying that Nvidia will reach reasonable multiples in the next 4, 5, or 6 years based on today's share price. Even if we set the fair P/E multiple at 40. Considering the expected earnings, this results in an overvaluation of almost 30% even until 2024.\nSource: www.dividendStocks.Cash\nEven when looking at a DCF analysis, we see the apparent overvaluation and massive downside potential. Below you can see the expectations for the sales development until 2024.\n\nFor the DCF analysis, I even assume a much more optimistic scenario where the company will increase sales significantly higher. I also assume an improvement in margins.\nSource:alphaspread.com/estimates by author\nBased on these figures and assuming a discount rate of 9%, we see that Nvidia is overvalued by 50 percent, which is essentially in line with the fundamental valuation.\nSource: alphaspread.com/estimates by author\nInvestors should not forget that we could also see a change in interest rates next year. A discount rate of 9 percent could therefore be far too low. To remind you, the cost of equity was already 10 percent for Nvidia at the end of 2019. So what happens if we continue to take an optimistic growth scenario but increase the discount rate to 12 percent?\nSource:Discount rate history for Nvidia\nYou can see the result here: The Nvidia share would then be overvalued by almost 75 percent.\nSource: alphaspread.com/estimates by author\nConclusion\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector. In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.","news_type":1},"isVote":1,"tweetType":1,"viewCount":311,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"CN","totalScore":0},{"id":844432730,"gmtCreate":1636450272520,"gmtModify":1636450359583,"author":{"id":"4091238277199530","authorId":"4091238277199530","name":"kizze","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"Why all asking like in comments","listText":"Why all asking like in comments","text":"Why all asking like in comments","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/844432730","repostId":"1163780473","repostType":2,"isVote":1,"tweetType":1,"viewCount":327,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"CN","totalScore":0}],"hots":[{"id":871158765,"gmtCreate":1637040632742,"gmtModify":1637040688159,"author":{"id":"4091238277199530","authorId":"4091238277199530","name":"kizze","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"I dont know where these clowns come from. With the next tech revolutionary&nbsp; about to begin with metaverse&nbsp; and other stuffs, graphics card platform&nbsp; is gonna boom very soon. Also their upcoming design for EV automakers definitely&nbsp; going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately&nbsp; this company is going for 1T market cap. Dont bother about these clowns.","listText":"I dont know where these clowns come from. With the next tech revolutionary&nbsp; about to begin with metaverse&nbsp; and other stuffs, graphics card platform&nbsp; is gonna boom very soon. Also their upcoming design for EV automakers definitely&nbsp; going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately&nbsp; this company is going for 1T market cap. Dont bother about these clowns.","text":"I dont know where these clowns come from. With the next tech revolutionary about to begin with metaverse and other stuffs, graphics card platform is gonna boom very soon. Also their upcoming design for EV automakers definitely going to leave NVDA to another level. The only concern now to worry about is the chip shortage around the world. Which they will soon over come. Ultimately this company is going for 1T market cap. Dont bother about these clowns.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":9,"commentSize":2,"repostSize":0,"link":"https://laohu8.com/post/871158765","repostId":"1160740007","repostType":2,"repost":{"id":"1160740007","pubTimestamp":1637034481,"share":"https://www.laohu8.com/m/news/1160740007?lang=&edition=full","pubTime":"2021-11-16 11:48","market":"us","language":"en","title":"Nvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade","url":"https://stock-news.laohu8.com/highlight/detail?id=1160740007","media":"seekingalpha","summary":"Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competit","content":"<p>Summary</p>\n<ul>\n <li>There is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.</li>\n <li>In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years.</li>\n <li>At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</li>\n</ul>\n<p><b>Introduction</b></p>\n<p>Nvidia's (NVDA) share price has followed a parabolic trend over the last few weeks, even in a logarithmic chart. In addition to the prolonged growth that accompanied the general optimistic stock market sentiment and the hype around tech stocks, we now see a short-term growth spurt. However, with the recent growth that has carried the company to a market cap of $760 billion, the stock has finally become a speculative bubble, joining all the other meme stocks. Thus, with Nvidia, I think we see how little an excellent business model has to do with an excellent investment. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</p>\n<p>Nothing but expectations</p>\n<p>Recently, hype sentiment has carried the share upwards. For this hype sentiment, theMetaverse/Omniverse, AI, and the Arm deal were the main reasons for exuberant optimism among Nvidia bulls.</p>\n<p>The company created a lot of excitement around its appearance at the GTC conference and the introduction of the omniverse platform. With this platform, Nvidia wants to create virtual worldsin particular:</p>\n<blockquote>\n Omniverse - a platform that serves as the connective tissue for physically accurate 3D virtual worlds - is gaining new features such as AR, VR and multi-GPU rendering, as well as integrations for infrastructure and industrial digital-twin applications with software from Bentley Systems and Esri.\n</blockquote>\n<blockquote>\n Omniverse enables engineers and designers to build physically accurate digital twins of buildings and products, or create massive, true-to-reality simulation environments for training robots or autonomous vehicles before they're deployed in the physical world.\n</blockquote>\n<p>The goal behind Omniverse is to create an ecosystem that is used by many industries worldwide. What is particularly exciting is that companies can create virtual twins of reality. The areas of application are manifold. For example, companies can test their products in this virtual world. It doesn't matter whether it's telecommunications companies that want to try the range of their transmission towers or data connection tools or car manufacturers that want to test the characteristics of cars in a real-life virtual environment. Instead of driving on a test track, the tests can take place in a virtual world. Awesome!</p>\n<p>What bugs me about this, however, are the many buzzwords. All these flowering words about quantum computers, AI, cyber security, etc., run through the entire (but otherwise fascinating and worth seeing) presentation. Of course, investors always need to clean up such presentations of all the advertising and touting to grasp the realistic opportunities. In the end, I think we are getting into the future that Nvidia is drawing for us. It may look different here and there, but the opportunities and monetization possibilities around virtual reality or virtual twins will be enormous and catapult us into the post-Internet age.</p>\n<p>But that brings us to the point. You don't have to have owned Microsoft (MSFT) shares in 2000 to see the parallels. With Microsoft, as with many Internet stocks, there was great euphoria about the future of the Internet and the associated (disruptive)business opportunities:</p>\n<blockquote>\n Before the dot.com or tech bubble burst, investors were convinced of the possibilities of the Internet, digitalization, and technical progress. Microsoft, it seemed, was the gatekeeper to this world with its Windows operating system and the Internet Explorer. The investors saw themselves at the beginning of a vast cycle. And Microsoft was able to keep its promises. By 1999, the company had increased its annual revenue by 30%. Besides, Microsoft was profitable even then and was able to increase its profits more than five-fold from 1995 to 2000.\n</blockquote>\n<blockquote>\n <img src=\"https://static.tigerbbs.com/60a717d69de6b7f73e2ac4764f6e2d5f\" tg-width=\"640\" tg-height=\"150\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">\n</blockquote>\n<blockquote>\n <i>Microsoft revenue &amp; EPS from 1995-2001; taken from MSFT investor relation/graph by author</i>\n</blockquote>\n<blockquote>\n But then, the bubble started to burst, and Judge Thomas Penfield Jacksondecidedthat Microsoft had violated the Sherman Antitrust Act due to abusive behavior, which only accelerated the bursting of the tech bubble. You know the rest of the story.\n</blockquote>\n<p>As with Microsoft in the dot.com bubble, the problem I see with Nvidia is that investors are euphorically betting on something that does not yet exist. So much of this future is currently priced into the share price without it even being clear what will end up in shareholders' pockets in the form of profits, cash flows, or dividends. Think of all the dot.com bubbles that burst even though companies like Cisco (CSCO) or Microsoft could deliver on their growth promises. Here we see the classic difference between companies and investments. An investment in a terrific company can still be a bad investment if the price is too high. If investors now buy Nvidia because of the Omniverse, it is nothing but a big gamble.</p>\n<p>And then, of course, there is Nvidia's classic business around the GPU and the Tegra processors. Here Nvidia is very successful. But this business is anything but a moat. Yes, Nvidia was able to increase sales and profits with it massively. The company has benefited primarily from the fact that the architecture of GPUs is superior to that of pure CPUs, such as those offered by Intel (INTC), for many applications such as high-performance computing, gaming, and servers.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f665c228fc6b50397b6fe547b6c1dbb3\" tg-width=\"640\" tg-height=\"322\" width=\"100%\" height=\"auto\"><span>Source:Investor presentation</span></p>\n<p>Now Nvidia is looking to gain a foothold in the CPU market with the $40 billion Arm acquisition, using Arm's business model to secure the company's licenses. The Arm architecture is a key technology, especially for the entire smartphone industry. Arm is the architecture behind the SoCs used in virtually all smartphones and most tablet computers.</p>\n<p>But it is not at all clear whether the deal will go through and at what price. Competition authorities such as the&nbsp;British CMA see considerable competition concerns&nbsp;and will presumably tie approval to significant concessions. Even if Nvidia does get clearance, the competition watchdogs will closely look at licensing practices. Unfortunately for Nvidia, and even though Arm does not make chips, the current chip shortage is prompting competition authorities to scrutinize the merger even more closely as the entire chip industry comes under scrutiny.</p>\n<p>In short, the Arm deal may ultimately bring more advantages than disadvantages for Nvidia, but it is uncertain to what extent advance praise is justified here. Investors should not forget that the competition is not sleeping. Qualcomm, in particular, is very active right now and has made a significant strategic move with the NUVIA acquisition. I have already written about NUVIAhereandhere, which Qualcomm acquired for $1.4 billion:</p>\n<blockquote>\n And then there's the startup NUVIA, which former Apple employees founded. CEO Amon wants to attack Apple's M1 processors with the acquired start-up and enter the laptop market next year. Qualcomm had previously tried integrating a smartphone SoC into a notebook with only minor modifications and okayish results.\n</blockquote>\n<blockquote>\n But now Qualcomm wants to release a Nuvia SoC based on ARM architecturenext year. This step would reduce Qualcomm's dependency on ARM and Nvidia enormously. Conversely, Qualcomm does not have much to lose since it can still license ARM technology from Nvidia in an emergency. The competition authorities will probably look particularly closely at the takeover of ARM by Nvidia to ensure that Nvidia does not put Qualcomm or other potential licensees at a disadvantage with too high license fees.\n</blockquote>\n<blockquote>\n The first comparisons of NUVIA's Phoenix chip to other chip suppliers already show a significant outperformance:\n</blockquote>\n<blockquote>\n <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/24cf0a0daa9c8b638e461a9bdaf0d1a9\" tg-width=\"640\" tg-height=\"407\" width=\"100%\" height=\"auto\"><span>Source:Nuvia Webpage</span></p>\n</blockquote>\n<p>Most recently, Qualcomm has been very optimistic about the prospects around the NUVIA deal:</p>\n<blockquote>\n We are pleased with the strong market validation of Arm-based personal computing in the industry transition to a new SoC architecture. We're more confident than ever in the connected computing opportunity, our upcoming solutions powered by our NUVIA CPUs, and our collaboration with Microsoft. We're also seeing increased traction in consumer electronics.\n</blockquote>\n<p>So it is not that Nvidia will single-handedly dominate the Arm market. The competitive pressure is no less in the other business areas either. Above all, the eternal GPU competitor AMD (AMD) will continue to put pressure on the company. In autonomous driving, Intel is a heavyweight competitor alongside Tesla (TSLA), following its acquisition of the Israeli companyMobileye for over $15 billion in 2017.</p>\n<p>Managing expectations</p>\n<p>With a P/E ratio of over 100, Nvidia would have to quadruple its profits to reach a valuation of 25, which is reasonable for a growth company. And admittedly, Nvidia has already achieved such growth.</p>\n<p>Nevertheless, investors who invest in Nvidia now are speculating that Nvidia will increase its profits in the same way for the coming years. Of course, the company has already managed such developments in the past. In 2005, Nvidia was able to push its earnings per share from $0.05 to $0.33 within three years, which corresponds to a six-fold increase. But already in 2009 and 2010, Nvidia made losses. Only in 2017, it was it able to lift EPS above the 2008 level. Investors have to face it: profit increases are not a one-way street, especially not in the tech sector. And even analysts do not expect Nvidia to increase profits fast enough to reach reasonable valuation levels based on the current share price over the following years. In 2020, adjusted EPS was $2.50. Below you see expected earnings for the subsequent years, and you can also see that even the most optimistic analyst out of 19 surveyed does not expect Nvidia to achieve EPS higher than $7.25 in 2024.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0d1916e5f56a5eee93d4c1c93e254afc\" tg-width=\"640\" tg-height=\"384\" width=\"100%\" height=\"auto\"><span>Source: www.dividendStocks.Cash</span></p>\n<p>So we are far from saying that Nvidia will reach reasonable multiples in the next 4, 5, or 6 years based on today's share price. Even if we set the fair P/E multiple at 40. Considering the expected earnings, this results in an overvaluation of almost 30% even until 2024.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7635beca779966b95afc457e2942d3f3\" tg-width=\"640\" tg-height=\"340\" width=\"100%\" height=\"auto\"><span>Source: www.dividendStocks.Cash</span></p>\n<p>Even when looking at a DCF analysis, we see the apparent overvaluation and massive downside potential. Below you can see the expectations for the sales development until 2024.</p>\n<p><img src=\"https://static.tigerbbs.com/334c1692ae1a107d16b6c981312c34fb\" tg-width=\"635\" tg-height=\"417\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"></p>\n<p>For the DCF analysis, I even assume a much more optimistic scenario where the company will increase sales significantly higher. I also assume an improvement in margins.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0ff075390e6e0c070e102d3010f93296\" tg-width=\"640\" tg-height=\"391\" width=\"100%\" height=\"auto\"><span>Source:alphaspread.com/estimates by author</span></p>\n<p>Based on these figures and assuming a discount rate of 9%, we see that Nvidia is overvalued by 50 percent, which is essentially in line with the fundamental valuation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/71fe4a0463babd595f753a0776e80efd\" tg-width=\"376\" tg-height=\"383\" width=\"100%\" height=\"auto\"><span>Source: alphaspread.com/estimates by author</span></p>\n<p>Investors should not forget that we could also see a change in interest rates next year. A discount rate of 9 percent could therefore be far too low. To remind you, the cost of equity was already 10 percent for Nvidia at the end of 2019. So what happens if we continue to take an optimistic growth scenario but increase the discount rate to 12 percent?</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1e8d3231ad0480f4042265afdcf2911d\" tg-width=\"640\" tg-height=\"226\" width=\"100%\" height=\"auto\"><span>Source:Discount rate history for Nvidia</span></p>\n<p>You can see the result here: The Nvidia share would then be overvalued by almost 75 percent.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4b3b3bab8c4014934702ed6382e76202\" tg-width=\"379\" tg-height=\"384\" width=\"100%\" height=\"auto\"><span>Source: alphaspread.com/estimates by author</span></p>\n<p>Conclusion</p>\n<p>There is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector. In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia Became A Meme Stock And Is Overvalued By At Least 50 Percent For The Coming Decade\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-11-16 11:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.\nIn my view, Nvidia does not offer a good risk/reward ratio as an investment ...</p>\n\n<a href=\"https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NVDA":"英伟达"},"source_url":"https://seekingalpha.com/article/4469673-nvidia-overvalued-by-at-least-50-percent","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1160740007","content_text":"Summary\n\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector.\nIn my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years.\nAt its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.\n\nIntroduction\nNvidia's (NVDA) share price has followed a parabolic trend over the last few weeks, even in a logarithmic chart. In addition to the prolonged growth that accompanied the general optimistic stock market sentiment and the hype around tech stocks, we now see a short-term growth spurt. However, with the recent growth that has carried the company to a market cap of $760 billion, the stock has finally become a speculative bubble, joining all the other meme stocks. Thus, with Nvidia, I think we see how little an excellent business model has to do with an excellent investment. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.\nNothing but expectations\nRecently, hype sentiment has carried the share upwards. For this hype sentiment, theMetaverse/Omniverse, AI, and the Arm deal were the main reasons for exuberant optimism among Nvidia bulls.\nThe company created a lot of excitement around its appearance at the GTC conference and the introduction of the omniverse platform. With this platform, Nvidia wants to create virtual worldsin particular:\n\n Omniverse - a platform that serves as the connective tissue for physically accurate 3D virtual worlds - is gaining new features such as AR, VR and multi-GPU rendering, as well as integrations for infrastructure and industrial digital-twin applications with software from Bentley Systems and Esri.\n\n\n Omniverse enables engineers and designers to build physically accurate digital twins of buildings and products, or create massive, true-to-reality simulation environments for training robots or autonomous vehicles before they're deployed in the physical world.\n\nThe goal behind Omniverse is to create an ecosystem that is used by many industries worldwide. What is particularly exciting is that companies can create virtual twins of reality. The areas of application are manifold. For example, companies can test their products in this virtual world. It doesn't matter whether it's telecommunications companies that want to try the range of their transmission towers or data connection tools or car manufacturers that want to test the characteristics of cars in a real-life virtual environment. Instead of driving on a test track, the tests can take place in a virtual world. Awesome!\nWhat bugs me about this, however, are the many buzzwords. All these flowering words about quantum computers, AI, cyber security, etc., run through the entire (but otherwise fascinating and worth seeing) presentation. Of course, investors always need to clean up such presentations of all the advertising and touting to grasp the realistic opportunities. In the end, I think we are getting into the future that Nvidia is drawing for us. It may look different here and there, but the opportunities and monetization possibilities around virtual reality or virtual twins will be enormous and catapult us into the post-Internet age.\nBut that brings us to the point. You don't have to have owned Microsoft (MSFT) shares in 2000 to see the parallels. With Microsoft, as with many Internet stocks, there was great euphoria about the future of the Internet and the associated (disruptive)business opportunities:\n\n Before the dot.com or tech bubble burst, investors were convinced of the possibilities of the Internet, digitalization, and technical progress. Microsoft, it seemed, was the gatekeeper to this world with its Windows operating system and the Internet Explorer. The investors saw themselves at the beginning of a vast cycle. And Microsoft was able to keep its promises. By 1999, the company had increased its annual revenue by 30%. Besides, Microsoft was profitable even then and was able to increase its profits more than five-fold from 1995 to 2000.\n\n\n\n\n\nMicrosoft revenue & EPS from 1995-2001; taken from MSFT investor relation/graph by author\n\n\n But then, the bubble started to burst, and Judge Thomas Penfield Jacksondecidedthat Microsoft had violated the Sherman Antitrust Act due to abusive behavior, which only accelerated the bursting of the tech bubble. You know the rest of the story.\n\nAs with Microsoft in the dot.com bubble, the problem I see with Nvidia is that investors are euphorically betting on something that does not yet exist. So much of this future is currently priced into the share price without it even being clear what will end up in shareholders' pockets in the form of profits, cash flows, or dividends. Think of all the dot.com bubbles that burst even though companies like Cisco (CSCO) or Microsoft could deliver on their growth promises. Here we see the classic difference between companies and investments. An investment in a terrific company can still be a bad investment if the price is too high. If investors now buy Nvidia because of the Omniverse, it is nothing but a big gamble.\nAnd then, of course, there is Nvidia's classic business around the GPU and the Tegra processors. Here Nvidia is very successful. But this business is anything but a moat. Yes, Nvidia was able to increase sales and profits with it massively. The company has benefited primarily from the fact that the architecture of GPUs is superior to that of pure CPUs, such as those offered by Intel (INTC), for many applications such as high-performance computing, gaming, and servers.\nSource:Investor presentation\nNow Nvidia is looking to gain a foothold in the CPU market with the $40 billion Arm acquisition, using Arm's business model to secure the company's licenses. The Arm architecture is a key technology, especially for the entire smartphone industry. Arm is the architecture behind the SoCs used in virtually all smartphones and most tablet computers.\nBut it is not at all clear whether the deal will go through and at what price. Competition authorities such as the British CMA see considerable competition concerns and will presumably tie approval to significant concessions. Even if Nvidia does get clearance, the competition watchdogs will closely look at licensing practices. Unfortunately for Nvidia, and even though Arm does not make chips, the current chip shortage is prompting competition authorities to scrutinize the merger even more closely as the entire chip industry comes under scrutiny.\nIn short, the Arm deal may ultimately bring more advantages than disadvantages for Nvidia, but it is uncertain to what extent advance praise is justified here. Investors should not forget that the competition is not sleeping. Qualcomm, in particular, is very active right now and has made a significant strategic move with the NUVIA acquisition. I have already written about NUVIAhereandhere, which Qualcomm acquired for $1.4 billion:\n\n And then there's the startup NUVIA, which former Apple employees founded. CEO Amon wants to attack Apple's M1 processors with the acquired start-up and enter the laptop market next year. Qualcomm had previously tried integrating a smartphone SoC into a notebook with only minor modifications and okayish results.\n\n\n But now Qualcomm wants to release a Nuvia SoC based on ARM architecturenext year. This step would reduce Qualcomm's dependency on ARM and Nvidia enormously. Conversely, Qualcomm does not have much to lose since it can still license ARM technology from Nvidia in an emergency. The competition authorities will probably look particularly closely at the takeover of ARM by Nvidia to ensure that Nvidia does not put Qualcomm or other potential licensees at a disadvantage with too high license fees.\n\n\n The first comparisons of NUVIA's Phoenix chip to other chip suppliers already show a significant outperformance:\n\n\nSource:Nuvia Webpage\n\nMost recently, Qualcomm has been very optimistic about the prospects around the NUVIA deal:\n\n We are pleased with the strong market validation of Arm-based personal computing in the industry transition to a new SoC architecture. We're more confident than ever in the connected computing opportunity, our upcoming solutions powered by our NUVIA CPUs, and our collaboration with Microsoft. We're also seeing increased traction in consumer electronics.\n\nSo it is not that Nvidia will single-handedly dominate the Arm market. The competitive pressure is no less in the other business areas either. Above all, the eternal GPU competitor AMD (AMD) will continue to put pressure on the company. In autonomous driving, Intel is a heavyweight competitor alongside Tesla (TSLA), following its acquisition of the Israeli companyMobileye for over $15 billion in 2017.\nManaging expectations\nWith a P/E ratio of over 100, Nvidia would have to quadruple its profits to reach a valuation of 25, which is reasonable for a growth company. And admittedly, Nvidia has already achieved such growth.\nNevertheless, investors who invest in Nvidia now are speculating that Nvidia will increase its profits in the same way for the coming years. Of course, the company has already managed such developments in the past. In 2005, Nvidia was able to push its earnings per share from $0.05 to $0.33 within three years, which corresponds to a six-fold increase. But already in 2009 and 2010, Nvidia made losses. Only in 2017, it was it able to lift EPS above the 2008 level. Investors have to face it: profit increases are not a one-way street, especially not in the tech sector. And even analysts do not expect Nvidia to increase profits fast enough to reach reasonable valuation levels based on the current share price over the following years. In 2020, adjusted EPS was $2.50. Below you see expected earnings for the subsequent years, and you can also see that even the most optimistic analyst out of 19 surveyed does not expect Nvidia to achieve EPS higher than $7.25 in 2024.\nSource: www.dividendStocks.Cash\nSo we are far from saying that Nvidia will reach reasonable multiples in the next 4, 5, or 6 years based on today's share price. Even if we set the fair P/E multiple at 40. Considering the expected earnings, this results in an overvaluation of almost 30% even until 2024.\nSource: www.dividendStocks.Cash\nEven when looking at a DCF analysis, we see the apparent overvaluation and massive downside potential. Below you can see the expectations for the sales development until 2024.\n\nFor the DCF analysis, I even assume a much more optimistic scenario where the company will increase sales significantly higher. I also assume an improvement in margins.\nSource:alphaspread.com/estimates by author\nBased on these figures and assuming a discount rate of 9%, we see that Nvidia is overvalued by 50 percent, which is essentially in line with the fundamental valuation.\nSource: alphaspread.com/estimates by author\nInvestors should not forget that we could also see a change in interest rates next year. A discount rate of 9 percent could therefore be far too low. To remind you, the cost of equity was already 10 percent for Nvidia at the end of 2019. So what happens if we continue to take an optimistic growth scenario but increase the discount rate to 12 percent?\nSource:Discount rate history for Nvidia\nYou can see the result here: The Nvidia share would then be overvalued by almost 75 percent.\nSource: alphaspread.com/estimates by author\nConclusion\nThere is no such thing as eternal dominance, especially not in the innovation- and competition-driven tech sector. In my view, Nvidia does not offer a good risk/reward ratio as an investment for the next five to ten years. At its current price, the stock is overvalued for the next few years and offers nothing more than a massive downside potential of more than 50 percent.","news_type":1},"isVote":1,"tweetType":1,"viewCount":311,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"CN","totalScore":0},{"id":844432730,"gmtCreate":1636450272520,"gmtModify":1636450359583,"author":{"id":"4091238277199530","authorId":"4091238277199530","name":"kizze","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"Why all asking like in comments","listText":"Why all asking like in comments","text":"Why all asking like in comments","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/844432730","repostId":"1163780473","repostType":2,"repost":{"id":"1163780473","pubTimestamp":1636436363,"share":"https://www.laohu8.com/m/news/1163780473?lang=&edition=full","pubTime":"2021-11-09 13:39","market":"us","language":"en","title":"Hertz Stock IPO: 11 Things to Know as HTZ Stock Preps for Nasdaq Uplisting","url":"https://stock-news.laohu8.com/highlight/detail?id=1163780473","media":"InvestorPlace","summary":"Hertz(OTCMKTS:HTZZ) stock is heading higher on Monday as the company prepares to uplist its shares t","content":"<p><b>Hertz</b>(OTCMKTS:HTZZ) stock is heading higher on Monday as the company prepares to uplist its shares to the&nbsp;<b>Nasdaq Exchange</b>&nbsp;as it exits bankruptcy<b>.</b></p>\n<p>Let’s take a look at what traders need to know about that news below!</p>\n<ul>\n <li>Hertz currently offers its shares via theover-the-counter market with the HTZZ stock ticker.</li>\n <li>However, it plans to uplist its shares to the Nasdaq this week, which will see it changing over to the HTZ stock ticker.</li>\n <li>To go along with this initial public offering (IPO) news from Hertz are plans for a public stock offering from certain shareholders.</li>\n <li>This will see those shareholders unload 37.1 million shares of their stock with a price range between $25 and $29 per share.</li>\n <li>According to a press release, Hertz will pay between $250 million and $500 million to repurchase shares from stockholders.</li>\n <li>It also notes that one of the sellers is offering a 30-day option for underwriters of the offering to buy an additional 5,565,000 shares of Hertz stock.</li>\n</ul>\n<ul>\n <li>The lead bookrunning managers for the offering are&nbsp;<b>Goldman Sachs</b>(NYSE:GS),<b>J.P. Morgan</b>(NYSE:JPM), and&nbsp;<b>Morgan Stanley</b>(NYSE:MS).</li>\n <li>Additional bookrunners include<b>Barclays</b>(NYSE:BCS) and&nbsp;<b>Deutsche Bank</b>(NYSE:DB) with&nbsp;<b>Guggenheim</b>(NYSE:GOF) acting as co-manager.</li>\n <li>HTZ stock is seeing a decent amount of trading today on the IPO talk.</li>\n <li>That includes some 400,000 shares changing hands.</li>\n <li>For comparison, the company’s daily average trading volume is just above that at roughly 580,000 shares.</li>\n</ul>\n<p>HTZZ stock was up 2.5% as of Monday afternoon and is up 30.6% since its OTC listing in July.</p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Hertz Stock IPO: 11 Things to Know as HTZ Stock Preps for Nasdaq Uplisting</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHertz Stock IPO: 11 Things to Know as HTZ Stock Preps for Nasdaq Uplisting\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-11-09 13:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2021/11/hertz-stock-ipo-11-things-to-know-as-htz-stock-preps-for-nasdaq-uplisting/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Hertz(OTCMKTS:HTZZ) stock is heading higher on Monday as the company prepares to uplist its shares to the Nasdaq Exchange as it exits bankruptcy.\nLet’s take a look at what traders need to know about ...</p>\n\n<a href=\"https://investorplace.com/2021/11/hertz-stock-ipo-11-things-to-know-as-htz-stock-preps-for-nasdaq-uplisting/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"HTZ":"赫兹租车","HTZZ":"Hertz Global Holdings, Inc."},"source_url":"https://investorplace.com/2021/11/hertz-stock-ipo-11-things-to-know-as-htz-stock-preps-for-nasdaq-uplisting/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1163780473","content_text":"Hertz(OTCMKTS:HTZZ) stock is heading higher on Monday as the company prepares to uplist its shares to the Nasdaq Exchange as it exits bankruptcy.\nLet’s take a look at what traders need to know about that news below!\n\nHertz currently offers its shares via theover-the-counter market with the HTZZ stock ticker.\nHowever, it plans to uplist its shares to the Nasdaq this week, which will see it changing over to the HTZ stock ticker.\nTo go along with this initial public offering (IPO) news from Hertz are plans for a public stock offering from certain shareholders.\nThis will see those shareholders unload 37.1 million shares of their stock with a price range between $25 and $29 per share.\nAccording to a press release, Hertz will pay between $250 million and $500 million to repurchase shares from stockholders.\nIt also notes that one of the sellers is offering a 30-day option for underwriters of the offering to buy an additional 5,565,000 shares of Hertz stock.\n\n\nThe lead bookrunning managers for the offering are Goldman Sachs(NYSE:GS),J.P. Morgan(NYSE:JPM), and Morgan Stanley(NYSE:MS).\nAdditional bookrunners includeBarclays(NYSE:BCS) and Deutsche Bank(NYSE:DB) with Guggenheim(NYSE:GOF) acting as co-manager.\nHTZ stock is seeing a decent amount of trading today on the IPO talk.\nThat includes some 400,000 shares changing hands.\nFor comparison, the company’s daily average trading volume is just above that at roughly 580,000 shares.\n\nHTZZ stock was up 2.5% as of Monday afternoon and is up 30.6% since its OTC listing in July.","news_type":1},"isVote":1,"tweetType":1,"viewCount":327,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"CN","totalScore":0}],"lives":[]}