the part that doesn’t get enough attention is the timeline. Cisco took 30 years to recover its dot com peak. 30 years. anyone buying Nvidia today at current valuations and expecting a similar trajectory to the last 5 years is essentially betting that this time the infrastructure company doesn’t follow the same pattern as the last infrastructure company that dominated its era. that’s not impossible but it’s a very specific kind of optimism
RIP_Soulja_Slim on
>The bubble may deflate. Valuations may correct. But if history is any guide, the infrastructure will outlast the speculation. The dot-com crash didn’t kill the internet. It cleared the ground for the internet to actually become what everyone had prematurely promised it would be.
This article is telling the exact opposite story that OP’s editorialized headline suggests.
Michal_F on
I don’t think it’s the same or similar. It was a different time and I believe during that time there was no strong competition like we have now. NVIDIA has a complete datacenter stack that is not so easy to copy. Plus Nvidia avoided many issues in the past and made the correct decision early. The only issue will be when there would be a strong player from china.
somedudeoutinla on
Another framing: at a nearly 80% gross margin, they’re purchasing equity in the most promising AI companies for 20 cents on the dollar. This is an exceptionally strategically sound way to deploy their absurd free cash flow, so long as they maintain discipline. Cisco did not maintain discipline. Jensen Huang, by contrast, is the furthest thing from a fool.
Crazy_Donkies on
Big disagreement here. CSCO PE ratio was 200x at the peak of the dotcom bubble. NVDA is 17x today? Moreover CSCO is now 18x. Seems like they’re both well valued to me.
5 Comments
the part that doesn’t get enough attention is the timeline. Cisco took 30 years to recover its dot com peak. 30 years. anyone buying Nvidia today at current valuations and expecting a similar trajectory to the last 5 years is essentially betting that this time the infrastructure company doesn’t follow the same pattern as the last infrastructure company that dominated its era. that’s not impossible but it’s a very specific kind of optimism
>The bubble may deflate. Valuations may correct. But if history is any guide, the infrastructure will outlast the speculation. The dot-com crash didn’t kill the internet. It cleared the ground for the internet to actually become what everyone had prematurely promised it would be.
This article is telling the exact opposite story that OP’s editorialized headline suggests.
I don’t think it’s the same or similar. It was a different time and I believe during that time there was no strong competition like we have now. NVIDIA has a complete datacenter stack that is not so easy to copy. Plus Nvidia avoided many issues in the past and made the correct decision early. The only issue will be when there would be a strong player from china.
Another framing: at a nearly 80% gross margin, they’re purchasing equity in the most promising AI companies for 20 cents on the dollar. This is an exceptionally strategically sound way to deploy their absurd free cash flow, so long as they maintain discipline. Cisco did not maintain discipline. Jensen Huang, by contrast, is the furthest thing from a fool.
Big disagreement here. CSCO PE ratio was 200x at the peak of the dotcom bubble. NVDA is 17x today? Moreover CSCO is now 18x. Seems like they’re both well valued to me.