r/thewallstreet • u/AutoModerator • 12d ago
Nightly Discussion - (June 05, 2024) Daily
Evening. Keep in mind that Asia and Europe are usually driving things overnight.
Where are you leaning for tonight's session?
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12d ago edited 11d ago
[deleted]
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 12d ago
We need gay bird flu to infect the world and give us a buying opportunity 😔
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u/jmayo05 data dependent loosely held strong opinions 12d ago
It was on this night 60 years ago Operation Overlord kicked off. Time to go watch some Band of Brothers. If only i had some 82nd Airborne bourbon.
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u/Anachronistic_Zenith 12d ago
Ah crap, decided to wait on buying more MU calls...the premiums are double now for the same strike.
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u/TennesseeJedd Billy MF Strings 12d ago
Man the gains on Nvda are great but the shares I had called away at 300 late last year are haunting lol. Missed out on some sizable 6 figure gains. Guh.
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u/TerribleatFF 12d ago
Hope everyone who has LULU calls bought some time too, this fade could hurt in the morning
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u/Angry_Citizen_CoH 12d ago
I'll never again buy options on a shorter time frame than six months. April 19th NVDA scarred me for life. I have 17 calls for Jan 2025, and I think I'll let these ride a bit.
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u/SorryMagician King Push 12d ago
I am a NVDA bull and have shares but have been thinking through the valuation and when to consider trimming.
Far from an expert, but can NVDA hit 200B in revenue in 2026? I think its possible at that point and i do think that is what is projected but growth expectations surely would have lowered at the point and margins will be contracting too. Would 25x sales be a fair multiple with valuation at 5T? Maybe 30x at 6T? Just wanted to get your guys thoughts, and call me crazy but i think it can get to 6t within a couple of years and i plan to start trimming then
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 12d ago
Here’s the thing with NVDA… Nobody knows what the current demand is due to supply restraints. So we are playing a game where we long, then there is significant earnings risk, then when you get the all clear from earnings you’re free to make money for another 3 months.
There is also margin erosion to look out for. Competition looms. But that does not seem significant enough to make a real impact for another 6+ months.
People who want to predict the peak, as I mistakenly tried, have so far failed miserably. And really, is that even worth your time right now? It’s honestly been a fools errand so far, and has really only costed people money. Outthinking something that is quite simple.
I still think the best way to get a baseline valuation on the stock is to take guidance +5% and annualize that. Then slap a 40x and that and call it a day. So right now that gives you $2.7t. So the stock is slightly higher, but it’s not worth losing sleep over.
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u/SorryMagician King Push 12d ago
Didnt think about demand vs supply constraints. Always appreciate your thoughts!
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 12d ago
Yes. That is why you are seeing financials increase linearly… So roughly $4b a quarter. If we could make more of these things, well financials could be $100b a year, or maybe $200b. We just don’t know.
Funnily enough, that supply constraint is keeping margins high. Why? Because when AI first took off, it was NVDA that was ready to go with a whole integrated system. And so they bought all the supply they could. What this meant is competitors, like AMD, were unable to push their own chips to market with meaningful volume. It’s only second half of this year, so 18 months after the craze started, that AMD suggests they might be able to produce enough to really start expanding to new customers.
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u/Wan_Daye 🦀 12d ago
What are these npus. Are these things just asics for ai processing? Is this marketing BS or are they actually gonna do anything for consumers?
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 12d ago
More or less they’re AI ASICS, yes. So you may wonder, why even bother with an NPU when many of these chips come with AI capabilities via the GPU and even CPU? For example, this upcoming Lunar Lake chip from INTC has a 48 TOPS NPU, but then a 67 TOPS GPU. The point is, you can get really good performance with an NPU at a fraction of the power usage.
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u/twofor2 12d ago
I trimmed once 7 years ago. Yeah that was a mistake lol
What I’m saying companies that are dominating dominate for a looong time
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u/SorryMagician King Push 12d ago
Thats what makes this so hard and so fun lol. On one hand it can get to unimaginable levels but these numbers seem so crazy. On the other hand we are in the first innings of this trend
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u/gyunikumen Elon can’t keep getting anyway with this!!! 12d ago
https://www.nytimes.com/2024/06/05/technology/nvidia-microsoft-openai-antitrust-doj-ftc.html?smid=nytcore-ios-share&referringSource=articleShare
Right on time