Isn't Nvidia totally overrated?
Hello, I just read an article and wanted to know what other people think.
In short, it says that Nvidia is completely overvalued. Sure, the company is definitely important for the future, but a value greater than Apple and almost as high as Microsoft? That's crazy. And yet Nvidia only generates a third of Apple's profit.
The stock is definitely not fairly valued at the moment. Or am I wrong?
The yields (own-capital yields, total return on capital and return on turnover) on the capital used, which Nvidia is available, are generated very profitable there.
A return on equity of 91% at 65% own capital is extremely good. It doesn’t even create apple or Microsoft.
The problem I see is how long they can keep this pace, and I also see a trend reversal if demand is no longer as high as before.
the question at the market is never whether, but when??
The question is how the profit will develop (even through the AI theme). If you look at the increases in recent years, it’s huge. In addition, the stock exchange is rarely rational. There are always any trend shares that run well regardless of all numbers. Whether you want to jump on the train or not, everyone has to know themselves. I am also cautious in principle, but I have also gotten in after the share split (indirectly I was already there with an etf) because I hope to get a little push from this in the short term. Of course, it can also go back.
You have to make a corporate assessment. The future cash flows discount with the alternative yield. I don’t see anything in the article.
If it is your sound opinion, you have the following options:
Values can be significantly longer than your financial ceiling.
The value of a company on a stock exchange is determined only by offers and demand. The future prospects of a company have a significant influence on it. The market is a fair price by operating the supply and demand.