Glad I sold half position last friday to somehow trim my anguish...when you have one position getting bigger and bigger every week, better trim it, even a slice or two. I think...
Better to sell the whole damn thing. Listen to what Bloomstran has to say about Nivida. [00:59:33] Chris Bloomstran: But NVIDIA reminds me today so much of Microsoft. Low 23 years ago. You know, here you are with a transformational AI on a business that has been a very good business with their graphics chips, but on what’s trailing 25 billion in sales, that’s clearly gonna grow Very quickly over the next few years, you had a market cap that hit $1.2 trillion. [00:59:58] Chris Bloomstran: Now we’ve got a short position on this thing, but you go through the same math on trailing 25 billion in revenues. If you grow those revenues at 20% a year, let’s say. You wind up. You wind up in a decade at 400 billion in revenues, and then you take today’s 20% profit margin and you could look at it growing to 30%. [01:00:18] Chris Bloomstran: Look at it, growing to 40%, and in any of those scenarios, if you grow the top line at 20, which is very difficult to do for any business for a sustained period of time and grow the margins to a very healthy level, far above what a semiconductor business. is normally gonna earn it. But if you allow them a 30 or 40 percent margin and then you apply a 30 or a 40 multiple to earnings, only then can you make a 10 plus percent return. [01:00:44] Chris Bloomstran: I mean, you have to grow the margin to 40%, double it from where it is today. Now there are Wall Street analysts that in the next five years, think the profit margins are gonna get 50 percent and that the business is going to grow by 40 percent a year, maybe it does. But when you start talking about 10 and 15 year periods of time. [01:00:59] Chris Bloomstran: And you start talking about paying a trillion two for a business that’s doing 25 billion in sales on a 20 percent profit margin, even if you get this immediate surge in top line growth and an immediate surge in profitability, you have to presume a lack of competition. I mean, AMD, there are other players In the chip world, there’s so much that can go wrong, but only in the case where everything goes right, when you extrapolate everything out, can you get to a mid to high single digit return. [01:01:29] Chris Bloomstran: So I would say Nvidia, you’d pay Nvidia at today’s price, I’d say the same thing that I did. about Microsoft. Today’s investor in NVIDIA will lose money over the next 15 years.
Thinking I will sell off a third of my remaining position. There are many good reasons to sell, but I found myself waiting for NVDA earnings and following it closely once it was released. That's not investing; that's gambling.
If one is certain of that outcome, why not stay in to capitalize off it? Unless there is another stock that will outperform with those profit taking funds, I only see unrealized profit.
I'm guessing he's talking more to traders or shorter-term investors and not the people who just buy and hold for years and years in companies they believe in.
It seems likely to certain, AMD is going to catch up to Nvidia. I'm not saying AMD will be on exactly the same level as Nvidia but they will get into the same ballpark, more or less. AMD has an impressive PowerPoint. That should be a nice boost for AMD that will come in about 1Q25. The AMD camp will be happy until 3Q25 when Nvidia is expected to roll their next gen. These days, both AMD and Nvidia are throwing money at AI. The race is on. It's Nvidia's to lose. I expect AMD will do well but I do not predict they will either catch Nvidia or pass them. I do predict that Microsoft will require about 40 TOPS to run Copilot locally. AMD will meet this spec by the end of the year. Intel will not. Intel is a distant third place, in the AI race.
It is clear you do your research before making statements, especially ones as bold as your first sentence. I have not come across anything to support this belief thus far. Do you have any links or sources that I could look at so I can see where you are coming from? Also, your post is a bit confusing in that you say AMD will catch up to Nvidia, but then you later state that "AMD will do well but I do not predict they will either catch Nvidia or pass them." I would love to put money into AMD, but I am not convinced just yet.
Nothing I wrote is fact. The future cannot be predicted as fact. In my defense, I ask that you cast your gaze toward the phrase, "It seems likely to certain..." Having said that, AMD's second generation AI accelerator is a huge step forward. What's more, it's a chiplet design so they can put it into any CPU complex or put a bunch together to form an AI specialty device. Obviously, it's not this simple and there are limitations but the idea stands. I believe the design would allow for a 4 way chiplet AI accelerator. That would get them to about 150 TOPS, based on the numbers I've seen. Perhaps more interesting would be a 2 AI chiplet, 1 CPU chiplet, 1 GPU chiplet complex. That would get them to 8 cores (16 threads) [Zen 5 will be 8C/16T per chiplet]. When later iterations of Zen 5 move to N3P, they are expected to move to 16C/32T per chiplet. Add 75 TOPS to that and a very competent GPU. You might literally have a device that redefines the world in AI technicolor. AMD will be a short term leader, IMO. I would not bet against them on CPUs. I'm not saying they will beat Intel but they are the leader and the incumbent usually remains on top. I would not bet against Nvidia on AI. Same reason. I'm just saying they will be in the ballpark for a while, as Nvidia waits on TSMC to cook the N2 sausage. When you see Intel and Nvidia commit to process nodes which are not stable, that means they need the small boost a process node step will bring. AMD is bringing out Zen 5 on N4. N4 is currently in production so is no risk and is cheaper than any of the N3 steps. By sacrificing a few percent in performance and power efficiency, they have a guaranteed win. If there are teething problems with N3P, they will still have N4P product to flood the channel. With semiconductors, the company in the lead has a massive advantage. AMD was a close second to Intel for years but Intel had a 6~18 month process node advantage and they dangled AMD in the wind for two decades. Now the tables have turned. As for sources, I won't go down that rabbit hole. There are people I believe have information and I assume everyone else is making shit up. What you are reading is opinion based on my personal information filter. Do with it what you wish or, better still, share any information you have that might be in agreement or conflict.
Yes, my post was worded terribly. For that, I apologize. I believe AMD will get into the same ballpark as Nvidia, with AI. They might even take the lead but, if so, it won't be by much and it won't be for long. Far more likely, AMD will get close for about 6 months before Nvidia pulls away. Keep in mind, if it's a close battle, AMD can move to N2 to match Nvidia on process and gain a little bit. If the accelerator battle is close, strategy becomes the deciding factor. One company can decide to sacrifice a bit of performance for cheaper parts and go after the lower end while the other company goes all out. Or, both companies can go all-out. It will be an interesting future!
So if I am reading you right, you believe that AMD will gain on Nvidia but only for the short term and then Nvidia will widen the gap again? Or do you believe that the gap will narrow and become more of a tit for tat battle? Again, I respect your views immensely, but I am not seeing AMD closing the gap anytime soon to put Nvidia's AI moat in danger. I can, however, see AMD being a cost-effective alternative to Nvidia that will allow them to grow into this frantically expanding AI market like they are beginning to do. It would emulate the existing consumer GPU market and provide AMD with a much needed high margin product line to bolster their R&D budget. Having said all this, Nvidia has an enormous amount of cash, the majority of the AI chip market, a thriving hardware/software ecosystem, and a brilliant CEO that is not making any mistakes that Intel made. Nvidia can and will throw its weight around to get priority treatment from TSMC just like Apple does. I am essentially doing the same thing you are when you say that your stances are based on an aggregation of sources that I deem historically accurate and informed. The only difference is my sources are leading me to believe there will be a maintaining of current Nvidia dominance for the near/mid term. Your statement of AMD closing the gap is noteworthy to me. When you say that you won't go down the rabbit hole of citing sources, it is these sources that I want to use to gauge my beliefs against yours to see if there are any errors in my line of reasoning.
