Q in April, Revenue has exceeded the midpoint of the company's own forecast by an average of 13%. So basically NVIDIA is setting this bar for what it expects to earn and just blowing it out by double digits almost every quarter. And then the question is, okay, so how do you value it? Because it is somewhat expensive if you look at its valuation according to this story, at least.
A It is somewhat expensive. I think the easiest historical analog that people are comparing NVIDIA to is understandably the dot-com Uh, boom and bust in the late nineties. And Cisco was, was the poster child for that. Cisco got as expensive as I think it was a 130 forward times earnings. Right now NVIDIA is trading somewhere between 40, let's call it 40 times forward earnings. And the question Alex, as you astutely asked is like, well, what, what is the proper valuation? And this is what makes it so fun and so exciting is you don't know. We'll find, I'll tell you what the proper valuation is three years from now. We'll find out what it, what it was. Um, but what should a company trade at that is growing this quickly, that is defining a new category that can be world-changing, that has margins like this, that has no competitors? Uh, I don't know what the right answer is, but it probably shouldn't be trading at a market multiple, call it 20 times or so, so it certainly has earned a premium that it's trading at. The question is, okay, yeah, growth stocks deserve a premium, but how big is too big? And can a company that's in the trillions now, three trillion dollars that it just became the largest company briefly for a minute surpassing Apple and Microsoft. It's only the 12th or 13th company over the last hundred years to wear the crown of the number one company in the S and P 500. I…
AI assessment note: “it certainly has earned a premium that it's trading at”