I read that Nvidia provides tech for crypto mining services/blockchain transactions. Could the current crypto pump be attributed to Nvidia’s great earnings and should I hold some crypto as well, cos tbh I’m having FOMO with the current crypto price at 71k.
It’s going to be a wild year for these sectors, so you should def. invest in crypto. 60% of my portfolio is spread across tech stocks, crypto and Crypto/Gold ETFs.
Well the crypto market is expected to do way better than any other equity sectors this 2024 especially with the SEC crypto ETF approval but it’s a volatile market nevertheless and if you’re new to it, it’s best to reach out to an experienced adviser for proper guidance.
Yes, my asset manager advised I spread further into mutual funds and crypto ETFs and boy am I glad I did. The whole idea is: Don’t get too greedy and also to exit at the right time, so generally I do find having an adviser very helpful, because what Avg. Joe really has time to watch and comprehensively analyze the market.
Finding financial advisors like ‘Grace Adams Cook’ who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
That's why it makes no sense to do so. A value investor doesn't care whether something trades at 20x earnings or 40x: neither provides an attractive business return.
@@mikedelape6609 I reckon the same would have been said throughout history to many, many companies! Intel, AMD, Microsoft, Qualcomm, probably several more I do not know about. Competition is catching up and one single break through from anyone of them could cause a catastrophic correction in the stock market.
Exactly and interesting as always! The definition of bubble is discussed, but it's in fact not so difficult... I owned a few shares of NVDA I purchased in a correction and then it went crazy up like 100 %, I sold. It went up more after that, but the risk of crashing was too big even for a small position. Waiting to reenter when price is reasonable! Thanks.
I keep going back viewing your past videos, to make a list of companies for my long/short portfolio. Keep up the excellent work. I know you put a lot of time and effort into this. ❤
Bullish or bearish, AI stocks will still dominate 2024, even beyond. Why I prefer NVIDIA is that they are better placed to maintain long-term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.
I agree, just because the market presents opportunities doesn't mean we should rush in headfirst. For this reason, we should look for appropriate market analysis or guidance or seek advice from certified market strategists.
@@AllsopsBrowns No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit a 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
@@AuerbachsPettises I'm interested in investing through an analyst. It sounds like the most sensible thing to do in the market. Could you please give me a pointer about who you work with?
@@PaulsByarses I've shuffled through investment coaches; they can positively impact an individual's portfolio. But do your due diligence to find a coach with grit that withstood the 2008 crash. MARGARET MOLLI ALVEY was better and smarter than all the advisors I have ever worked with. I’ve never met anyone with as much conviction.
I find the argument extremely absurd to say this time is different to the Dotcom bubble because this time the companies actually make money. Yes, they do but the valuation is just mindboggling. We started with PE, now where taking the PE of next years (maybe) earnings so it does not appear too absurd. Somehow people are willing to pay 3.5 T dollars for a company that made like 50 billion over the last 5 years, mostly last year. Yes this year will be good, but that does not justify the valuation by any means. This margin and this expentiture for virtually no AI profit and just costs for the companies is unsustainable. All this makes the way down so much longer.
The current valuation does not care what the company made last year or the year before that, only what it will make in the future. Nvidia is on track to make $70B in 2024, and they are forecast to keep growing rapidly next year with the release of their new Blackwell chip in Q4 which is a massive improvement on the current AI chips they are selling. Demand for that is extremely high by all accounts. There's a strong possibility that Nvidia will become the most profitable company in the world already in 2025, ahead of Apple. So when you account for growth the valuation of Nvidia is no more ridiculous than the likes of Apple, Microsoft, Google etc, in fact it looks cheaper by comparison. If you don't account for that (which Sven clearly doesn't), of course the valuation looks ridiculous. But you can't call yourself a "value investor" and not look at growth, Sven is just being lazy here to push his usual narrative (everything is overvalued).
@@TimeToGetIntenseIt is coming from every industry in the world, the majority of them using accelerated computing from the hyperscalers (AWS, Azure, Google, Oracle...)
@@TimeToGetIntense Who told you only startups are buying Nvidia's GPUs? 45% of Data Center revenue are contributed by cloud service providers, and they are all hugely profitable today.
@@Skantezz You're correct, the question is what will they earn in the future. Go ahead, tell me your best guess of what this company will make in the next ten years. At what point does the growth stop, or does this just keep going at this rate? At what valuation and market cap would you say the company is overpriced? How much will they keep earing on a yearly basis sustainably after all this growth? Do you find the margins at 70-80% for an IT infrastructure provider sustainable? Are you at all concerned about competition or the strong dependencies on other companies like TSMC? Will the prices of GPUs stay at these levels, rise or fall? What would you say the market cap and valuation might be in 10 years (just ballpark, not looking for exact number)?
@@johnkraemer9610 years is way too long for me to own Nvidia, anyone pretending they can make a forecast for a tech company that far out is lying to you. However, I'm very confident that Nvidia will grow a lot in the coming 2-3 years. I am particularly confident that 2025 will be an incredible year with revenue growth somewhere around 50% compared to this year. When I get to a point where I feel that I don't have a good grasp on what the growth will look like in the coming 12-18 months, then I will sell, as simple as that. Nvidia is not a buy and hold forever as far as I'm concerned. But for the moment it looks attractive.
Doing buybacks at these levels is insane and destruction of shareholder value. They should keep the money on the balance sheet and do the buybacks in a downturn.
From another perspective, doing buybacks at these levels provides the necessary exit liquidity for smart investors who want to sell the stock. Especially insiders...
For some reason, most management teams do it, so there seems to be a generalized resistance to hoarding cash in the balance sheet. I have been keeping an eye on met coal miners (trying to understand Mohnish Pabrai's thesis). Same thing: most cashflows from the recent inflationary surge have been deployed towards buybacks at the highest prices the shares have ever traded at. Apple, Google, Meta... they all do buybacks on autopilot regardless of valuation. Only Buffett explicitly states that buybacks are subject to valuation. The only way to avoid having capital wasted at absurd multiples is to avoid absurd multiples in the first place.
Since 2008 it's been very fashionable predict the next crisis or bubble. If you believe the market is bullshit you are just naive or inexperienced or a mainstream media. If you say the market will crash whenever you are a genius.
Call8ng being in a bubble doesn't imply the bubble will immediately pop. Margins can still go higher but they cannot be sustained at current levels. Meaning valuations are unsustainable. But valuations are also an indicator of sentiment. And sentiment knows no bounds.
@@georgeballew3181 I know Buffet quotes, but we are speaking about ego here. Dalio wants recognition, it's all about his ego. If you read his book, you will notice it. The worst thing with this "predictions" is how misleading they are for investors. Do your own due dilligence and don't pay attetion to Dalio, to Sven nor to anybody else.
Good video , fully agree. There is one more saying that reflects current situation: What smart people do in the beginning, the fools do in the end. It is time now to do a video about Alibaba
Generai AI has always been 20 years around the corner, same as nuclear fusion. As a research scientist, seeing the stock market explode on the promise of a future technology that hasnt been proven yet has the words "ponzi scam" written all over it. Real technological development takes years if not decades of trial and error coupled with small incremental improvements that are completely unnoticeable for anyone who isn't an expert in the field.
Agreed. I want to see how all this "IA" extra spending (either in marketing or chips) is translated into productivity or higher revenues/earnings. I don't see it happening that early
@@DanielGonzalez-jv1gx There are good reasons to believe LLMs are hitting a limit and will never be able to do anything resembling reasoning due to fundamentally flawed assumptions in their architecture. LLMs might seem intelligence because they can superficially imitate human communication. However I tried coding with it and asking a few very basic level arithmetic and logic problems, and it is patently obvious it has absolutely no idea of what it is doing unless you show it something it has already seen, or a very close version of it. Of course they are good for translating, finding basic information and generating quick content that's surface-level passable, but there's a huge gap between that and performing real cognitive work. Human intelligence and skill is a bit more nuanced than regurgitating bits and pieces of previous conversations, songs or visual art and arranging them in a collage.
"Got fired and started a YT channel, now we have to find him" hahahahaha is pure comedy but facts at the same time. Sven was so top through this whole video
Yeah, I bought before the split, so my average is pretty good. Just gonna sit on them. Turning towards utilities now which are also in the AI hype. But at least they are utilities, most low enough to pay a good dividend.
Wow! That comparison to Cisco is worrying!! I set my stop loss on Nvidia, if it drops 10% will sell automatically and I still make some gains so zero risk for me!
@@bartvanderheijden7055 It provides an indication towards what can happen. In order to earn a return from an idiotik multiple, only a perfect scenario works (for both the business, the sector and the overall market). So: Risk: a Cisco scenario, semis cycle downturn, multiple compression market cycle, etc. Reward: unlikely outsized returns from an already high multiple. If I gave cash to a monkey and had him watch CNBC for a while, would he end up with the same portfolio as you? If so...
You live and learn. I made mistakes in first few years. Lots of companies/investments did not work for me. I have wised up a lot since then. I go through the account to see that they are making profits etc.
A lot of NVIDIA and other tech stock is actually being purchased with debt thru the yen (and other) carry trade(s), which despite what retail financial press would have people believe, it is still alive and well.
Brilliant analysis!!! I agree with your analysis but NVIDIA's revenue growth rates are just too dramatic to dismiss. I used your intrinsic value calculation tool and, even with the harshest parameters (and 15% discount rate), the final sum was higher than NVIDIA's current market cap. The stock will go down (as mega scalers catch up and neutralize NVIDIA's differentiation), the question is when...
If someone is new to this channel: Everything what Sven said to this date, came out as opposite. If you don't believe me, go watch his videos from 2017,2018 :) So, if he says sell Nvidia, you should buy it. You can make a virtual watchlist with his all recommendations and do everything opposite - that portfolio will outperform the market with a big margin :)
Wish you guys all the best. I suggest making a portfolio going against his predictions, and making a UA-cam video on it in a year or two. That could really blow up your channel.
Absolutely, he’s mad because he’s not participating in nvda bull run. Psychologically can’t admit he was and is wrong, so blame it on a bubble, he is a fool
@@user-pf3ow1tu3f If you bought the SPY 2 years ago and it drops 50% now, you would still be ahead by about 30%. Sven and most of the youtube financial gurus are just fools.
There was a lot of optimism towards Cisco, Intel, Microsoft, Amazon in the 90s... How did long term holding without thinking work? Cisco and Intel never saw those prices again. Microsoft saw 14 years of no return. Even if you held through today, annualized return since the highs of the bubble were under 10%.
The sad things to me is I bought nvidia before all this shits Ai happened. I wanted keep for life. Now I am doubt to sell or not. I invested a ridiculous low amount. So that money doesn’t change my day. What should I do?
I was a bit late to Tesla, and therefore in my case the stock has mainly traded sideways and I have not made much only about 25%, I continue to own the stock. You live and learn. I owned Palantir from the start, and will continue to own it, in my point of view it is an established company, and has many contracts with Government, Military, Health, etc. I like and liked Palantir's business from the outset. And will continue to own it.
Hi Sven Some share buyback when overvalued makes sense: a. to mitigate employee compensation plan. b. To mitigate effect of major stake holder selling (kind of passing money from the company to stakeholders without affecting the rest). From all the big teck nvdia issued the list (checked in genAI so it might be wrong) but it justify just a 1/10.... Maybe they try to neutralize all shares sold by the employees. Share buybacks while overvalued is insane.
@Value-Investing true, but investor do not want to be deluted, I can imagine the cfo ppl doing buyback in the rate they "print" as a PR, Ppl (I) want to know we are not being deluted.
Awesome video🤩 Also just wanted to mention there are other investment options too-like Cryptonica's Crypto ATMS liquidity pool which delivers a steady 2.5% daily return.
Far to many value short sellers have joined the Long Only religion. Shorting Tesla and NVDIA has pushed toward this religion as well. Unless the FED gets serious about monetary constraint then there will be plenty of money around to fuel bubbles.
Hi Sven. First of all, that's a great jumper. It looks good on you! Secondly, could you clarify what you think will be the interplay between the "normal" chip cycle downturn (non AI chip orders are taking longer to recover than expected as per ASML, BESI, AMD) and the slowdown in the AI hype? Is this building up to be a catastrophic conjunction of events? In all of this, is there a chance for the bubble to deflate and "normalise" or there could only be a loud pop?
You should take a look at NVDA next fiscal year, EPS 4.06, that is above only 34x Forward PE. It is still high, but far from bubble considering its industry leading monopoly position. Do some study befoe publishing videos. By the way, bubble is not a bad thing, you cant make a good money without bubble.
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s ... I would greatly appreciate any suggestions.
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience. If you're new to investing or don't have much time, it's best to get advice from an expert.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
It is a semi conductor company its hardware. Cisco and Nortel the darlings 25 years ago couldn't monetize the internet. The software companies are the ones that can make money from AI, just as Amazon and Google did from internet. There are fundemental reasons why inventors of any new technological innovation don't make money on what they create. It is the application of the technology that are the companies to watch. Think about how Microsoft changed focus 10 years ago and now get most of its growth in revenue from the cloud. The cash revenue from its operational systems allowed it at the time to adapt and change its business. Apple before that was almost bankrupt, and it transformed itself with i phone, an idea that started with Blackberry, the original company with handhelds. Blackberry is still in business, but its handhelds are not used. The one consistant is that the original leaders usually don't monetize the new idea.
As long as company grows i don’t see any bubble.Cisco has nothing to do with nvidia.the level of tech is joke nvda vs cisco.73 years cash flow without counting huge growth.
By mid-2000, Cisco had been growing net income at a 50% cagr over 5 years. Between then and 2007, before the great recession, net income tripled again. And yet the shares... This is a cyclical sector: "huge growth" is in the past. Sooner than later, these businesses will struggle to even sustain revenues, let alone grow. Then analysts adjust growth rates and multiples at once in their models, downgrades... and speculators move onto the next glowy thing.
Hey Sven, CROX Q3 earnings just came out, down 20% despite beating estimates, it is looking at a much better buy now, solid business with a PE of 10. Would love if u can review the stock.
*How do you know Nvidia will not invent some A.I. trading program, and the stock will trade itself to $1 million dollars and become self aware and destroy all short sellers* hahaha...
I know you posted about fertilizer stocks. What do you think about CVR Partners? they produce nitrogen fertilizers. Interestingly, they are owned 40% by CVI energy, a refiner, which dropped 25% yesterday on "mid-cycle crude oil prices" and dividend cut. You can buy CVR partners cheap and get a refiner with good dividend yield in the future for the price if you buy CVI. Carl Icahn own 70% of CVI.
9:43 😂😂 Thanks for the video Sven. No idea whether NVDA is in bubble territory or not. However, your analogy to Cisco is wrong. Back then the expectation was that the telcos would charge for traffic priority on the internet, becoming the defacto internet "gatekeepers". And that they'd rush to invest heavily into new equipment, thus bidding up the (then SotA) Cisco hardware. Of course, "net neutrality" killed that thesis and allowed for the emergence of the internet startups and, later, megacorps (Alphabet, Meta, AMZN, etc.) Cisco had no "moat", it's current equivalent would probably be TSMC. NVDA has IP going back 30 years and is so far ahead of other chip makers, they can't even see them. Moreover, back then Chinese companies started copying switches and network devices pushing prices down. Good luck doing that with NVDA designs in the current geopolitical environment. And as you admit, the Internet and WWW was a revolution. And trillions were made in the last 20 years, just not by Cisco or the telcos!
Nvidia has only achieved a temporary monopoly because the software stack for ai requires a compiler from the ml frameworks like PyTorch to the gpu machine code But intel amd Tesla meta aws Microsoft are all working on cuda alternatives that will lead to any gpu manufacturer to be able to sell compute as a commodity Nvidia margins will go from 70% to 7%
Right now they are differentiated with the s/w stack you mention. I believe AI is very expensive to acquire, implement, power, and maintain. Most orgs will dabble in it then decide the economics aren’t there. Probably another 2 or 3 yrs till the trough of disillusionment.
"A new industrial revolution" is the kind of new era sentiment that you see at optimistic tops. In 99-00 the internet was going to bring about a new era, where the business cycle had been rendered irrelevant. I don't think we are seeing the kind of 99 bubble now, though 2021 was very close with people paying $millions for monkey jpegs. A lot of people think we have to top with that kind of crazy speculation, but maybe we already had the crazy part in 21, now we are more in a nifty fifty market.
A bubble can only be considered as such if/after it has popped... there are countless examples of bubbles (like SPAC etc) which fit but also countless which you conveniently chose to ignore - for example you said BTC was a bubble when it started coming down and yet now it's at all time high... 🙄... is nvda a bubble? who knows... also everyone mentions CSCO during the tech bubble, but what about AMZN? that also was always considered a bubble stock ...
not long NVDA, but 73X cash flow means 73 years to get your money back is only if there is no growth. if the cash flow increases 30% for just 2 years and then stayed flat, it would only take 43 years. Or, if cash flow increases 30% for 2 years and then a mere 5% thereafter, it would only take 25 years. That's not bad at all (still not cheap, but not 73 years!)
totally agree. but with the huge amount of chips BigTechs are buying right now and in the short future, you think they will maintain this level of buy for the next 43 years?
@@jirojiro1029 Except that you are not really getting any money back. Even if they sustain current buyback levels: 21b in buybacks minus 4b in stock compensation is 17b, which is a meager 0.5% yield… The moment there is any disappointment, this will be the sweetest short candy for daytraders.
Except that you are not really getting any money back. Even if they sustain current buyback levels: 21b in buybacks minus 4b in stock compensation is 17b, which is a meager 0.5% yield… The moment there is any disappointment, this will be the sweetest short candy for daytraders.
Sven P/ cash flow (or P/E) is useless for tech stock, what matters is G for scalable businesses. Forgot price/sales, price to book and similar, they don’t fit good in today world environment. They only lead you to missed opportunities. Since you’ve been saying everything is overvalued and in a bubble, Tesla and Palantir have done 10-20x. Yes, one day the correction will come. Set your stop-loss (trailing) and enjoy the ride. I think your philosophy is now unsuitable for the current context. However, if you believe it is winning, please share your portfolio and make it public. If you can demonstrate that it has historically performed better than the market (S&P 500), I would be happy to pay for a subscription to your platform. Anyway, I keep following you for comparison and to test my potential biases. Thanks for that
Sven has made about 14% this year while the SPY has gone up 30%. All because he is contantly worried that the Mag 7 stocks will crash. He doesn't know what he is doing.
At current valuations it'll be hard for SPY to continue the growth rate for the next 5-10 years. Also remember SPY had 0% return for two years in 2022 and 2023.
If your focus is on the ups and downs, I am afraid it is you who doesn't know what he is doing. He is not worried about anything: he invests in assets where he sees value and compounds over time.
Yes, but completely reliant on a few hardware customers, although Nvidia definitely will grow upcoming 12+ months, I mean shovels are great as long as there are new gold miners incoming to your town :D
He is investing. If Nvidia does great in the future, he is okay. If Nvidia does terrible in the future, he is okay. Compounding slow and steady no matter what. Meanwhile, every tech-obsessed clown out there is only okay in one scenario, one in which growth stays strong in perpetuity, margins stay wide and multiples stay idiotik. Ungortunately, there is not one example in history in which that worked from current multiples, so best of luck.
This is a stupid video, past bubbles were based on companies with zero earnings and skyhigh evaluations, Nvidia is actually selling products and is trading at a reasonable multiple according to future sales
After 30bi revenue, how can you expect the growth on sales, when you exhaust all the capacities of capex of your customers (Microsoft, google, etc.) and more the increase of concurrence, SORRY, the valuation is not real and will end in tears.
@@bartvanderheijden7055 Cisco was also revolutionary, was also growing revenues at more than 50% in the late 90s and also traded at idiotik multiples. From 1999 through 2007, before the great recession, Cisco continued to grow: net income tripled. And yet the shares... Likewise for Microsoft, Amazon...
I read that Nvidia provides tech for crypto mining services/blockchain transactions. Could the current crypto pump be attributed to Nvidia’s great earnings and should I hold some crypto as well, cos tbh I’m having FOMO with the current crypto price at 71k.
It’s going to be a wild year for these sectors, so you should def. invest in crypto. 60% of my portfolio is spread across tech stocks, crypto and Crypto/Gold ETFs.
Well the crypto market is expected to do way better than any other equity sectors this 2024 especially with the SEC crypto ETF approval but it’s a volatile market nevertheless and if you’re new to it, it’s best to reach out to an experienced adviser for proper guidance.
Yes, my asset manager advised I spread further into mutual funds and crypto ETFs and boy am I glad I did. The whole idea is: Don’t get too greedy and also to exit at the right time, so generally I do find having an adviser very helpful, because what Avg. Joe really has time to watch and comprehensively analyze the market.
could you recommend some good advisers? don’t get me wrong, I already have an asset manager, but he seems not to know much about crypto.
Finding financial advisors like ‘Grace Adams Cook’ who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
"Who knows, this time it might be different..." 🤣👌🏻
@@AnythingEverythingAll you mean the guy that lost 5 billion on WeWork? yeah... I'll listen to Warren Buffet instead.
@@AnythingEverythingAllSoftBank is to valuing companies what you are to doing due diligence
The problem with bubbles is trying to predict the top is really hard.
That's why it makes no sense to do so. A value investor doesn't care whether something trades at 20x earnings or 40x: neither provides an attractive business return.
@@mathewwilson9776So Nvidia growing 40% annualy does not produce good returns if you can buy it at PE 20? Are you sure? 😂😂😂
its not a bubble, this is a legit one of a kind powerhouse company
@@mikedelape6609 I reckon the same would have been said throughout history to many, many companies! Intel, AMD, Microsoft, Qualcomm, probably several more I do not know about. Competition is catching up and one single break through from anyone of them could cause a catastrophic correction in the stock market.
4:22 - “You will bring your kid to daycare, AI Nvidia chips will take care of your kid.” -ROFLMAO😂😂😅😅 … pitch perfect! **chef’s kiss**
:-))
I know before I watched the video. Just came here to give it a like. Thank you for your hard work
Exactly and interesting as always! The definition of bubble is discussed, but it's in fact not so difficult... I owned a few shares of NVDA I purchased in a correction and then it went crazy up like 100 %, I sold. It went up more after that, but the risk of crashing was too big even for a small position. Waiting to reenter when price is reasonable! Thanks.
I keep going back viewing your past videos, to make a list of companies for my long/short portfolio. Keep up the excellent work. I know you put a lot of time and effort into this. ❤
thanks!
Agree!
Bullish or bearish, AI stocks will still dominate 2024, even beyond. Why I prefer NVIDIA is that they are better placed to maintain long-term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.
I agree, just because the market presents opportunities doesn't mean we should rush in headfirst. For this reason, we should look for appropriate market analysis or guidance or seek advice from certified market strategists.
@@AllsopsBrowns No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit a 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
@@AuerbachsPettises I'm interested in investing through an analyst. It sounds like the most sensible thing to do in the market. Could you please give me a pointer about who you work with?
@@PaulsByarses I've shuffled through investment coaches; they can positively impact an individual's portfolio. But do your due diligence to find a coach with grit that withstood the 2008 crash. MARGARET MOLLI ALVEY was better and smarter than all the advisors I have ever worked with. I’ve never met anyone with as much conviction.
@@AuerbachsPettises Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible.
I find the argument extremely absurd to say this time is different to the Dotcom bubble because this time the companies actually make money. Yes, they do but the valuation is just mindboggling. We started with PE, now where taking the PE of next years (maybe) earnings so it does not appear too absurd. Somehow people are willing to pay 3.5 T dollars for a company that made like 50 billion over the last 5 years, mostly last year. Yes this year will be good, but that does not justify the valuation by any means. This margin and this expentiture for virtually no AI profit and just costs for the companies is unsustainable. All this makes the way down so much longer.
The current valuation does not care what the company made last year or the year before that, only what it will make in the future. Nvidia is on track to make $70B in 2024, and they are forecast to keep growing rapidly next year with the release of their new Blackwell chip in Q4 which is a massive improvement on the current AI chips they are selling. Demand for that is extremely high by all accounts. There's a strong possibility that Nvidia will become the most profitable company in the world already in 2025, ahead of Apple. So when you account for growth the valuation of Nvidia is no more ridiculous than the likes of Apple, Microsoft, Google etc, in fact it looks cheaper by comparison. If you don't account for that (which Sven clearly doesn't), of course the valuation looks ridiculous. But you can't call yourself a "value investor" and not look at growth, Sven is just being lazy here to push his usual narrative (everything is overvalued).
@@TimeToGetIntenseIt is coming from every industry in the world, the majority of them using accelerated computing from the hyperscalers (AWS, Azure, Google, Oracle...)
@@TimeToGetIntense Who told you only startups are buying Nvidia's GPUs? 45% of Data Center revenue are contributed by cloud service providers, and they are all hugely profitable today.
@@Skantezz You're correct, the question is what will they earn in the future. Go ahead, tell me your best guess of what this company will make in the next ten years. At what point does the growth stop, or does this just keep going at this rate? At what valuation and market cap would you say the company is overpriced? How much will they keep earing on a yearly basis sustainably after all this growth? Do you find the margins at 70-80% for an IT infrastructure provider sustainable? Are you at all concerned about competition or the strong dependencies on other companies like TSMC? Will the prices of GPUs stay at these levels, rise or fall? What would you say the market cap and valuation might be in 10 years (just ballpark, not looking for exact number)?
@@johnkraemer9610 years is way too long for me to own Nvidia, anyone pretending they can make a forecast for a tech company that far out is lying to you. However, I'm very confident that Nvidia will grow a lot in the coming 2-3 years. I am particularly confident that 2025 will be an incredible year with revenue growth somewhere around 50% compared to this year. When I get to a point where I feel that I don't have a good grasp on what the growth will look like in the coming 12-18 months, then I will sell, as simple as that. Nvidia is not a buy and hold forever as far as I'm concerned. But for the moment it looks attractive.
"Investing well for the long term is having everybody agreeing with you... After"
Doing buybacks at these levels is insane and destruction of shareholder value. They should keep the money on the balance sheet and do the buybacks in a downturn.
From another perspective, doing buybacks at these levels provides the necessary exit liquidity for smart investors who want to sell the stock. Especially insiders...
@@paolovita1720 insiders selling like crazy rt now especially last 6 months
A downturn! that is not allowed, hence the buybacks >:)
For some reason, most management teams do it, so there seems to be a generalized resistance to hoarding cash in the balance sheet.
I have been keeping an eye on met coal miners (trying to understand Mohnish Pabrai's thesis). Same thing: most cashflows from the recent inflationary surge have been deployed towards buybacks at the highest prices the shares have ever traded at.
Apple, Google, Meta... they all do buybacks on autopilot regardless of valuation. Only Buffett explicitly states that buybacks are subject to valuation.
The only way to avoid having capital wasted at absurd multiples is to avoid absurd multiples in the first place.
@@mathewwilson9776 They have stock based compensation.
The same Ray Dalio who said we were on a bubble in 2020, 2021, 2022, 2023 and now, 2024? At certain moment in time he will be right.
Since 2008 it's been very fashionable predict the next crisis or bubble. If you believe the market is bullshit you are just naive or inexperienced or a mainstream media. If you say the market will crash whenever you are a genius.
I am not a Dalio-Fan, but: You can be in a bubble for 10 Years straight ;) ...
Call8ng being in a bubble doesn't imply the bubble will immediately pop. Margins can still go higher but they cannot be sustained at current levels. Meaning valuations are unsustainable. But valuations are also an indicator of sentiment. And sentiment knows no bounds.
The market can stay irrational longer than you can stay solvent.
@@georgeballew3181 I know Buffet quotes, but we are speaking about ego here. Dalio wants recognition, it's all about his ego. If you read his book, you will notice it. The worst thing with this "predictions" is how misleading they are for investors. Do your own due dilligence and don't pay attetion to Dalio, to Sven nor to anybody else.
Good video , fully agree. There is one more saying that reflects current situation: What smart people do in the beginning, the fools do in the end.
It is time now to do a video about Alibaba
Generai AI has always been 20 years around the corner, same as nuclear fusion.
As a research scientist, seeing the stock market explode on the promise of a future technology that hasnt been proven yet has the words "ponzi scam" written all over it. Real technological development takes years if not decades of trial and error coupled with small incremental improvements that are completely unnoticeable for anyone who isn't an expert in the field.
Agreed. I want to see how all this "IA" extra spending (either in marketing or chips) is translated into productivity or higher revenues/earnings. I don't see it happening that early
@@DanielGonzalez-jv1gx There are good reasons to believe LLMs are hitting a limit and will never be able to do anything resembling reasoning due to fundamentally flawed assumptions in their architecture.
LLMs might seem intelligence because they can superficially imitate human communication. However I tried coding with it and asking a few very basic level arithmetic and logic problems, and it is patently obvious it has absolutely no idea of what it is doing unless you show it something it has already seen, or a very close version of it.
Of course they are good for translating, finding basic information and generating quick content that's surface-level passable, but there's a huge gap between that and performing real cognitive work. Human intelligence and skill is a bit more nuanced than regurgitating bits and pieces of previous conversations, songs or visual art and arranging them in a collage.
Hey, that's me! Thanks! 73 years...oh well, my Südzucker shares are doing well today...
Brilliant analysis!!! Beautiful!!!
Glad you liked it!
Loved the one about the guy got fired 🤣. I have some nvidia but I am ok. Is not that much. But not buying more... that strong buy is so stupid xD
"Got fired and started a YT channel, now we have to find him" hahahahaha is pure comedy but facts at the same time. Sven was so top through this whole video
Yeah, I bought before the split, so my average is pretty good. Just gonna sit on them. Turning towards utilities now which are also in the AI hype. But at least they are utilities, most low enough to pay a good dividend.
Wow! That comparison to Cisco is worrying!! I set my stop loss on Nvidia, if it drops 10% will sell automatically and I still make some gains so zero risk for me!
You also can compare it to Intel but that doesn't make it true. Analyses by this so called Ph.D. are below par.
@@bartvanderheijden7055 It provides an indication towards what can happen.
In order to earn a return from an idiotik multiple, only a perfect scenario works (for both the business, the sector and the overall market). So:
Risk: a Cisco scenario, semis cycle downturn, multiple compression market cycle, etc.
Reward: unlikely outsized returns from an already high multiple.
If I gave cash to a monkey and had him watch CNBC for a while, would he end up with the same portfolio as you? If so...
Today the DEX in By-bit is lagging!!
I just done video to show that
When you are exchanging it's giving you like 9x^
Nice quick bubbling analysis. Thank you Sven. I hope many naive investors see this video!
its not a damn bubble, your clearly wrong
What? A sweater??? Looking gooooood Dr Carlin! ❤️
You live and learn. I made mistakes in first few years. Lots of companies/investments did not work for me. I have wised up a lot since then.
I go through the account to see that they are making profits etc.
A lot of NVIDIA and other tech stock is actually being purchased with debt thru the yen (and other) carry trade(s), which despite what retail financial press would have people believe, it is still alive and well.
Brilliant analysis!!! I agree with your analysis but NVIDIA's revenue growth rates are just too dramatic to dismiss. I used your intrinsic value calculation tool and, even with the harshest parameters (and 15% discount rate), the final sum was higher than NVIDIA's current market cap. The stock will go down (as mega scalers catch up and neutralize NVIDIA's differentiation), the question is when...
Great video, great sweater.
Nice one Sven. Takes some guts to call that out to the herd. And love that last remark 'This time its different'!
If someone is new to this channel: Everything what Sven said to this date, came out as opposite. If you don't believe me, go watch his videos from 2017,2018 :) So, if he says sell Nvidia, you should buy it. You can make a virtual watchlist with his all recommendations and do everything opposite - that portfolio will outperform the market with a big margin :)
Sven has no idea what he is doing. He is just depressed so everything he says is negative.
Wish you guys all the best. I suggest making a portfolio going against his predictions, and making a UA-cam video on it in a year or two. That could really blow up your channel.
Absolutely, he’s mad because he’s not participating in nvda bull run. Psychologically can’t admit he was and is wrong, so blame it on a bubble, he is a fool
@@user-pf3ow1tu3f If you bought the SPY 2 years ago and it drops 50% now, you would still be ahead by about 30%. Sven and most of the youtube financial gurus are just fools.
😮
i wonder if you think apple or google or amazon is a bubble?
Love the humor 😂 keep the vids comin Sven ❤
thanks, will do!
This is informative golden content; thanks Sven.
There's a lot of optimism for Nvidia but I'm holding it long-term!
There was a lot of optimism towards Cisco, Intel, Microsoft, Amazon in the 90s... How did long term holding without thinking work?
Cisco and Intel never saw those prices again.
Microsoft saw 14 years of no return. Even if you held through today, annualized return since the highs of the bubble were under 10%.
The sad things to me is I bought nvidia before all this shits Ai happened. I wanted keep for life. Now I am doubt to sell or not. I invested a ridiculous low amount. So that money doesn’t change my day. What should I do?
focus on other things in life:-)
I was a bit late to Tesla, and therefore in my case the stock has mainly traded sideways and I have not made much only about 25%, I continue to own the stock. You live and learn.
I owned Palantir from the start, and will continue to own it, in my point of view it is an established company, and has many contracts with Government, Military, Health, etc. I like and liked Palantir's business from the outset. And will continue to own it.
Hi Sven
Some share buyback when overvalued makes sense:
a. to mitigate employee compensation plan.
b. To mitigate effect of major stake holder selling (kind of passing money from the company to stakeholders without affecting the rest).
From all the big teck nvdia issued the list (checked in genAI so it might be wrong)
but it justify just a 1/10....
Maybe they try to neutralize all shares sold by the employees.
Share buybacks while overvalued is insane.
I would disagree on a and b too, that is a cost and the hide it through buybacks.
@Value-Investing true, but investor do not want to be deluted, I can imagine the cfo ppl doing buyback in the rate they "print" as a PR, Ppl (I) want to know we are not being deluted.
Nice sweater, Sven the man! You've been putting out a lot of content lately. Love it :-)
Awesome sweater... very 70s!
What puts are we buying?
Awesome video🤩 Also just wanted to mention there are other investment options too-like Cryptonica's Crypto ATMS liquidity pool which delivers a steady 2.5% daily return.
2.5% daily return? Gtf outta here
Far to many value short sellers have joined the Long Only religion. Shorting Tesla and NVDIA has pushed toward this religion as well. Unless the FED gets serious about monetary constraint then there will be plenty of money around to fuel bubbles.
Just what the doctor ordered. Thank you for the content Sven.
Hi Sven. First of all, that's a great jumper. It looks good on you! Secondly, could you clarify what you think will be the interplay between the "normal" chip cycle downturn (non AI chip orders are taking longer to recover than expected as per ASML, BESI, AMD) and the slowdown in the AI hype? Is this building up to be a catastrophic conjunction of events?
In all of this, is there a chance for the bubble to deflate and "normalise" or there could only be a loud pop?
You should take a look at NVDA next fiscal year, EPS 4.06, that is above only 34x Forward PE. It is still high, but far from bubble considering its industry leading monopoly position. Do some study befoe publishing videos. By the way, bubble is not a bad thing, you cant make a good money without bubble.
This video will become one of those 'i told you so' resource for NVIDIA once the bubble pops.
Its only a matter of time now. Tick tock tick tock...
maybe yes, maybe no, but I am just not taking the risk
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s ... I would greatly appreciate any suggestions.
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience. If you're new to investing or don't have much time, it's best to get advice from an expert.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Svetlana Sarkisian Chowdhury is her name. you can search the name
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Let's be real, the whole catyalyst for AI melt up was the silly Chat GPT that wrote a C grade high school term paper
Maybe read a bit about AI before commenting. The scope is a bit wider.
Good views, points, and presentation! If detail Cisco's data and stats are shown and compared to Nvidia's, that would be perfect. The 73 times 👈👏
Good point!
It is a semi conductor company its hardware. Cisco and Nortel the darlings 25 years ago couldn't monetize the internet. The software companies are the ones that can make money from AI, just as Amazon and Google did from internet. There are fundemental reasons why inventors of any new technological innovation don't make money on what they create. It is the application of the technology that are the companies to watch. Think about how Microsoft changed focus 10 years ago and now get most of its growth in revenue from the cloud. The cash revenue from its operational systems allowed it at the time to adapt and change its business. Apple before that was almost bankrupt, and it transformed itself with i phone, an idea that started with Blackberry, the original company with handhelds. Blackberry is still in business, but its handhelds are not used. The one consistant is that the original leaders usually don't monetize the new idea.
3,5 T market cap is enough information already :)
As long as company grows i don’t see any bubble.Cisco has nothing to do with nvidia.the level of tech is joke nvda vs cisco.73 years cash flow without counting huge growth.
Wait til March 2025 and see what happens
By mid-2000, Cisco had been growing net income at a 50% cagr over 5 years.
Between then and 2007, before the great recession, net income tripled again. And yet the shares...
This is a cyclical sector: "huge growth" is in the past. Sooner than later, these businesses will struggle to even sustain revenues, let alone grow.
Then analysts adjust growth rates and multiples at once in their models, downgrades... and speculators move onto the next glowy thing.
hell yes
Hi Sven, could you please analyse Estee Lauder and Disney as they are good brands and on decade low price levels?
Buybacks with this valuation....this world is crazy.
Hey Sven, CROX Q3 earnings just came out, down 20% despite beating estimates, it is looking at a much better buy now, solid business with a PE of 10. Would love if u can review the stock.
*How do you know Nvidia will not invent some A.I. trading program, and the stock will trade itself to $1 million dollars and become self aware and destroy all short sellers* hahaha...
I think that scenario is already priced in 🤭
but it wasnt bubble under 50 last year and what did sven do ? Nothing he bought some pe 10 dying company stock.
thanks for commenting!
I know you posted about fertilizer stocks. What do you think about CVR Partners? they produce nitrogen fertilizers. Interestingly, they are owned 40% by CVI energy, a refiner, which dropped 25% yesterday on "mid-cycle crude oil prices" and dividend cut. You can buy CVR partners cheap and get a refiner with good dividend yield in the future for the price if you buy CVI. Carl Icahn own 70% of CVI.
Any interest in Carrefour stock? It’s definitely not the hot topic right now but it looks like an interesting opportunity
This video will age like the finest of wines hehe
:-))
'somewhere here was a guy telling people nvidia was a sell and he probably got fired and now runs a small youtube channel'
XDDDD
Show me the incentive, I'll show you the outcome
Aiaiai I'm just going to drink some bubbles while watching this story unfold from the sideline. 😆
Did Sven put on weight?
Yes, have to lower a bit on the carbs
9:43 😂😂
Thanks for the video Sven.
No idea whether NVDA is in bubble territory or not.
However, your analogy to Cisco is wrong.
Back then the expectation was that the telcos would charge for traffic priority on the internet, becoming the defacto internet "gatekeepers". And that they'd rush to invest heavily into new equipment, thus bidding up the (then SotA) Cisco hardware.
Of course, "net neutrality" killed that thesis and allowed for the emergence of the internet startups and, later, megacorps (Alphabet, Meta, AMZN, etc.)
Cisco had no "moat", it's current equivalent would probably be TSMC.
NVDA has IP going back 30 years and is so far ahead of other chip makers, they can't even see them.
Moreover, back then Chinese companies started copying switches and network devices pushing prices down.
Good luck doing that with NVDA designs in the current geopolitical environment.
And as you admit, the Internet and WWW was a revolution.
And trillions were made in the last 20 years, just not by Cisco or the telcos!
Nvidia has only achieved a temporary monopoly because the software stack for ai requires a compiler from the ml frameworks like PyTorch to the gpu machine code
But intel amd Tesla meta aws Microsoft are all working on cuda alternatives that will lead to any gpu manufacturer to be able to sell compute as a commodity
Nvidia margins will go from 70% to 7%
very possible!
Right now they are differentiated with the s/w stack you mention. I believe AI is very expensive to acquire, implement, power, and maintain. Most orgs will dabble in it then decide the economics aren’t there. Probably another 2 or 3 yrs till the trough of disillusionment.
The fact that the analyst is now on UA-cam had me cracking up! 🤣🤣🤣
Nvidia 10x EPS and share price 10x. Thats not a bubble. Thats Peter Lynch's Earnings, Earnings, Earnings.
Is he the analyst who got fires
hahaha
I certainly wouldn't purchase at these prices, that's for sure. Though, an entry at less than 100$ would be very good looking.
your sweather is amazing
"A new industrial revolution" is the kind of new era sentiment that you see at optimistic tops. In 99-00 the internet was going to bring about a new era, where the business cycle had been rendered irrelevant. I don't think we are seeing the kind of 99 bubble now, though 2021 was very close with people paying $millions for monkey jpegs. A lot of people think we have to top with that kind of crazy speculation, but maybe we already had the crazy part in 21, now we are more in a nifty fifty market.
yep!
First we need to talk about how glorious that sweater is.
:-)
ASML?
Yuppp, Sven really knows how it is, to be “fired” and start UA-cam channel 😂
Buy more Palantir
A bubble can only be considered as such if/after it has popped... there are countless examples of bubbles (like SPAC etc) which fit but also countless which you conveniently chose to ignore - for example you said BTC was a bubble when it started coming down and yet now it's at all time high... 🙄... is nvda a bubble? who knows... also everyone mentions CSCO during the tech bubble, but what about AMZN? that also was always considered a bubble stock ...
If you’re into bass fishing, let me know when you want to take a trip to the states and I’d be happy to host you. Serious offer. Family welcome.
i think there is no business in the future without chips. So market for chips will be lots of trillions.
not long NVDA, but 73X cash flow means 73 years to get your money back is only if there is no growth. if the cash flow increases 30% for just 2 years and then stayed flat, it would only take 43 years. Or, if cash flow increases 30% for 2 years and then a mere 5% thereafter, it would only take 25 years. That's not bad at all (still not cheap, but not 73 years!)
totally agree. but with the huge amount of chips BigTechs are buying right now and in the short future, you think they will maintain this level of buy for the next 43 years?
@ I don’t think so that’s why I don’t own it
@@jirojiro1029 Except that you are not really getting any money back. Even if they sustain current buyback levels: 21b in buybacks minus 4b in stock compensation is 17b, which is a meager 0.5% yield… The moment there is any disappointment, this will be the sweetest short candy for daytraders.
Except that you are not really getting any money back. Even if they sustain current buyback levels: 21b in buybacks minus 4b in stock compensation is 17b, which is a meager 0.5% yield… The moment there is any disappointment, this will be the sweetest short candy for daytraders.
There is absolutely no chance it will remain stable. Demand will drop by 50% in 2 years.
aistockadvisor AI fixes this. Nvidia stock considered a bubble.
thanks for sharing!
Analyst got fired because said nvidea is a sell and is now a small youtuber
NVDA to the moon 🎉
Would be intresting what you think about OXY and DVN at actual levels 😅 Not that insane PEs as NVIDIA 😂
this the same guy who invested in that russian oil company? yea howd that work out for you.
actually it worked ok, as we sold on the risk materializing! thanks!
Guys, I need 2x from here, let me first sell and then I’m fine if the bubble pops
This is the perfect mentality to lose money. I suggest you reassess your goals, risk and strategy today
$7 trillion valuation 😱
If you start fishing you can maybe start a fishing channel when you have AI sven :D
yep, that would be nice :-)
Microstrategy stock is even worse...
It's all AI. Just like in Dotcom - the internet came to stay, but the evaluations are off. Investment is flowing in like they all braindead.
Nvidia CEO Huang suggested the name Nvidia, from "invidia", the Latin word for "envy"
Nvidia is a bubble, and tell me I'm stupid when it might go up a lot more from here!
Sven P/ cash flow (or P/E) is useless for tech stock, what matters is G for scalable businesses. Forgot price/sales, price to book and similar, they don’t fit good in today world environment. They only lead you to missed opportunities. Since you’ve been saying everything is overvalued and in a bubble, Tesla and Palantir have done 10-20x. Yes, one day the correction will come. Set your stop-loss (trailing) and enjoy the ride. I think your philosophy is now unsuitable for the current context. However, if you believe it is winning, please share your portfolio and make it public. If you can demonstrate that it has historically performed better than the market (S&P 500), I would be happy to pay for a subscription to your platform. Anyway, I keep following you for comparison and to test my potential biases. Thanks for that
The market is hedged with options Nvidia is the market so if Nvidia goes everything goes with it - sounds like this guy missed out
Sven has made about 14% this year while the SPY has gone up 30%. All because he is contantly worried that the Mag 7 stocks will crash. He doesn't know what he is doing.
At current valuations it'll be hard for SPY to continue the growth rate for the next 5-10 years.
Also remember SPY had 0% return for two years in 2022 and 2023.
If your focus is on the ups and downs, I am afraid it is you who doesn't know what he is doing. He is not worried about anything: he invests in assets where he sees value and compounds over time.
I thought Nvidia was in bubble 2017, no UA-cam channel though.
9:28 hilarious
:-)
🤣🤣🤣
Another example Supermicro a pure AI BUBBLE with accounting BS 😅
For nvidia why the hell would anyone think NVDA is worth more than APPl. 😅😅😅
cash flow is growing at a rate of 39% though.
Yes, but completely reliant on a few hardware customers, although Nvidia definitely will grow upcoming 12+ months, I mean shovels are great as long as there are new gold miners incoming to your town :D
i would say you Sven are in a bubble
He is investing. If Nvidia does great in the future, he is okay. If Nvidia does terrible in the future, he is okay. Compounding slow and steady no matter what.
Meanwhile, every tech-obsessed clown out there is only okay in one scenario, one in which growth stays strong in perpetuity, margins stay wide and multiples stay idiotik. Ungortunately, there is not one example in history in which that worked from current multiples, so best of luck.
🗽 Correct, NVDA is now a clear SELL!
.
I listened to Sven two years ago not buying nvda, I missed huge😢
This is a stupid video, past bubbles were based on companies with zero earnings and skyhigh evaluations, Nvidia is actually selling products and is trading at a reasonable multiple according to future sales
After 30bi revenue, how can you expect the growth on sales, when you exhaust all the capacities of capex of your customers (Microsoft, google, etc.) and more the increase of concurrence, SORRY, the valuation is not real and will end in tears.
Did you watch the same video? Did you not listen to any of his arguments? Did you not see the comparison to Cisco?
@@ax99investments47Just check the fwd P/E.
@@MRM42what has nvidia to do with Cisco?
@@bartvanderheijden7055 Cisco was also revolutionary, was also growing revenues at more than 50% in the late 90s and also traded at idiotik multiples.
From 1999 through 2007, before the great recession, Cisco continued to grow: net income tripled. And yet the shares...
Likewise for Microsoft, Amazon...
Bubble or not, does it matter? Buying nvidia stock now is most likely a really bad decision
ok all out, take ur money and run
BUT Sven you just don't understand .... something.... something 😜
NVIDA reminds me of Lucent.
Same insanity.
Same channel stuffing.