What am I missing? Did anyone watch the full NVDA GTC conference? I mean, I’m a bit mind blown that NVDA forward PE of 37 considering everything that was presented. Cheap in the sense of growth potential, not cheap on a relative basis versus dividend stocks of course but it’s cheaper on a forward PE than Amazon, Tesla and AMD with higher growth prospects in my opinion.
It seems clear that NVDA is in the very early stages of leading the AI revolution. If one wants to make the argument the semiconductors are cyclical and competition will heat up, I have 0 arguments there. But why is nobody talking about the software as a service bundle when all these companies buy these chips? The ability to use the omniverse to test products, the new inferencing software service. The forward PE estimates are simply based on analysts which are seemingly underestimating. I dunno, stock just ironically seems super cheap despite this run up.
Combining the scenario that NVDA has the best chips, followed by ecosystem which will eventually have some substantial reoccurring revenue and the requirement to update the chips to stay on the cutting edge versus competitors, the cyclical nature of the semiconductors and moving to a SAAS system of revenue makes me feel like despite the 87% year to date return and over 200% in 2023, the human nature side of me says saying this is early innings and cheap is wild, but it appears that way to me.
Would love to hear other perspectives.
